CHINA'S WANDA GIVES UP AMC THEATRES MAJORITY STAKE
Updated: Mar 15, 2021
FILM INDUSTRY NEWS WEEKLY DIGEST, SUNDAY MARCH 14TH
China's Wanda Gives Up AMC Theatres Majority Stake
It is official: Chinese conglomerate Wanda Group has given up its majority stake in movie theater giant AMC Entertainment, doing business as AMC Theatres.
AMC in its annual report, filed Friday with the Securities and Exchange Commission, said Wanda had reduced its stake to 23.08 percent of the company's outstanding common stock and 47.37 percent of the combined voting power of common stock as of Dec. 31. It then further cut its ownership to bring both its economic and voting stake to 9.8 percent as of March 3. On Feb. 1, 2021, Wanda exercised a right to convert its Class B common stock, each share of which carried three votes, to regular Class A common stock, which have one vote per share. "Even after conversion, Wanda may have significant influence over our corporate management and affairs, due to their representation on the board of directors and their 9.8 percent stock ownership as of March 3, 2021, based on our records and information from Wanda," Friday's regulatory filing said.
Wanda had owned a controlling stake in AMC since 2012 when it bought majority control of the exhibition giant for $2.6 billion, which at the time was the largest international acquisition ever by a private Chinese company. The Beijing-based firm pared its stake in AMC in 2018 through a deal with private equity firm Silver Lake, but it maintained control of the theater chain through the dual share structure.
‘Black Widow’: Disney Boss Bob Chapek, Once Again, Confirms That Pic’s Current Summer Release Date Remains Unchanged
Today at Disney’s annual shareholder meeting, CEO Bob Chapek continued to underscore that the release date for Marvel’s long-awaited feature Black Widow is May 7, and that the Cate Shortland-directed title will be seen in theaters.
There’s been some intense speculation in the exhibition and rival distribution circles that the Marvel movie will either move once again as overseas markets — which the Scarlett Johansson pic greatly needs to launch — remain in Covid lockdown, or that Disney has some sort of simultaneous theatrical/Disney+ release in its back pocket a la this past weekend’s dud Raya and the Last Dragon, which opened to $8.6M.
Over Half of Disney+ Subscribers are Adult-Only Households
“When 50% of the people in Disney Plus don’t have kids, you really have the opportunity now to think much more broadly about the nature of your content,” said Disney CEO Bob Chapek during the Morgan Stanley Technology, Media and Telecommunications Conference this week.
What Americans Want From Streaming: Day-and-Date Movies
U.S. adults are willing to pay between $13 and $17 per month for a streamer that includes new movie releases, a THR/Morning Consult poll finds. A streaming service looking to stand out from the competition and attract subscribers has one clear path: offer day-and-date movies.
That path, taken by WarnerMedia's HBO Max, has caused a backlash within Hollywood from filmmakers and theater chains. Yet it may be what the public is looking for. New films drive purchase consideration for potential subscribers, a pair of Hollywood Reporter/Morning Consult polls finds...In one survey of 2,200 people conducted Feb. 25-28, 90 percent of respondents who subscribe to HBO Max said they would be more likely to purchase a subscription to a streaming service if it included newly released films the same day they are in theaters for no extra cost. Meanwhile, 64 percent of people who are not HBO Max subscribers said the same.
Netflix boss: Film fans want joint release dates for cinema and streaming
Netflix chief Greg Peters said the pandemic has shown "consumers want" simultaneous releases. He told a virtual session at Morgan Stanley's Technology, Media & Telecom Conference that "consumer choice" should dominate decisions.
"We've been supporting [simultaneous] release for a long time, [and] maybe shorter theatrical windows. So I would say we're enthusiastic to see a shift in enabling more and more of that", said Peters, who is Netflix's Chief Operating Officer...At the end of the day, it's hard to buck that trend for too long, and I think that that's eventually where things go."
China Built More Than 2,000 New Screens in the First Two Months of 2021
The country’s box office supremacy will be helped along by the addition of 2,188 new screens built in January and February, bringing its nationwide tally up to 77,769. The National Film Administration set the goal of reaching 80,000 screens by the year 2020 back in 2018. Although China wasn’t quite able to hit the mark in time, local reports assess that it seems like it will now be possible by this summer or even the May 1 Labor Day holiday, which is gearing up to be unusually competitive with eight new releases.
In 2019, China added 9,708 new screens to bring its national total to 69,787. Last year, it added 5,794 more, despite the pandemic, bringing its tally up to 75,581 screens at some 12,700 complexes nationwide as of Dec. 31. Although China gained nearly 6,000 screens in 2020, it built only 300 new complexes, indicating an influx of larger multiplexes even as smaller venues went out of business during the pandemic. In comparison, China built 1,453 new theaters in 2019. The U.S. had 40,998 screens in 2020.
Berlin Market Wrap: Netflix Spending Spree, Indie Resurgence
There was also a greater spirit of cooperation and collaboration between independent distributors and global streamers, two groups often at loggerheads in the past. Netflix acquisitions Operation Mincemeat and The Ice Road will get theatrical releases in many international territories, per previous pre-sale deals, and Apple has amicably resolved most of the disputes surrounding its recently-announced worldwide rights deal for Sian Heder's Sundance crowdpleaser Coda. The film, which Pathe had pre-sold to much of the world, will still go out theatrically in many international territories, with Apple in negotiations to take second- or third-window rights in places where it does not own the movie outright.
The bidding has been quite aggressive," said Olivier van den Broeck, managing partner at Benelux distributor The Searchers, which pre-bought several titles, including Better Man, In the Lost Lands and Black Flies out of Berlin. "If we've learned anything from the past few months it's that if your slate is strong enough if the movies are good enough, you'll be able to move forward...The business we saw in Berlin shows the indies can co-exist with the streamers," says van den Broeck. "Business models, release strategies: everything is very fluid at the moment. But the fact that people are still buying given the circumstances of the past year? I think that's more than a silver lining."
Movie Theaters Increasingly Bet on Family Films Amid Reopening
With 45 percent of theaters now open stateside, exhibitors count on all-ages titles like 'Croods: A New Age' and 'Raya and the Last Dragon' to have long runs. Family movies have been the surprise box office success of the pandemic, with Universal and DreamWorks Animation’s The Croods: A New Age the strongest case-in-point. Croods 2, which debuted in those cinemas that remained open over Thanksgiving, outgrossed Warner Bros. and DC’s superhero sequel Wonder Woman 1984 in North America, grossing $53.6 million as of March 7. That compares to $44.4 million for WW84, which unfurled Dec. 25.
The next major Hollywood family studio film to brave opening during the pandemic was Warner Bros.’ Tom & Jerry, which debuted to a robust $14.1 million over the Feb. 26-28 weekend and $23 million in total. But there are no certainties. Disney’s animated pic Raya and the Last Dragon debuted to a subdued $8.6 million at the domestic box office over the March 5-7 frame.
Hong Kong Cinema Chain UA Files for Voluntary Liquidation
UA Cinemas, one of Hong Kong’s leading movie theater operators, has collapsed. The company said on Monday morning that it had applied for voluntary liquidation. Hong Kong cinemas were allowed by the government to reopen three weeks ago after the latest round of virus-related closures. But the move meant that cinemas could still only operate at 50% capacity, and it came too late to save UA.
Hong Kong traditionally has one of the world’s highest per capita cinema attendance rates, which means that in normal years the territory usually ranks among the world’s top 20 box office markets, despite its lowly 7.5 million population.
Los Angeles cinemas given greenlight to reopen for first time in a year
This has paved the way for an easing of restrictions on certain business including exhibitors, which will be able to open their doors at 25% capacity from Monday to Wednesday.
Chains will return to business at different times depending on their preparedness, a process that after one year of closure during the pandemic includes staff hiring and training. It is understood AMC will reopen its venues on March 19, while Cinemark said it expected to do so soon. According to reports the Regal chain is likely to reopen in May.
Netflix Tests Cracking Down on Password Sharing
Netflix is testing a new feature that could signal the start of an effort to crack down on password sharing.
Spotted by GammaWire, some viewers attempting to use somebody else's account are now being stopped by a screen that says, "If you don't live with the owner of this account, you need your own account to keep watching."
Netflix confirmed the new feature, which is getting a limited rollout at this time. "This test is designed to help ensure that people using Netflix accounts are authorized to do so," a Netflix spokesperson said.
In order to continue watching, the viewer is given the option of either verifying their identity (with a texted or emailed code to the account's owner), or opting to "verify later," which gives the viewer an unspecified additional amount of time to continue watching and later confirm they are a valid account user.
A source familiar with the tests said the extent of the rollout varies from country to country, but noted that one reason for the feature is a desire to help protect subscribers from security concerns that can arise from unauthorized use of their account.
Netflix Password-Sharing Crackdown Could Boost Subscriber Count: Analyst
Netflix’s new test to verify subscription credentials of users — and convert password freeloaders into paying customers — could help the global streamer grow its subscriber count, according to a Wall Street analyst. “We view any potential password crackdowns as tailwind and Netflix is in a strong position to continue price increases in 2021,” Bank of America Securities analyst Nat Schindler wrote in a research note Friday.
Netflix might take a two-pronged approach toward ramping up its subscriber base: by “clamping down on password sharing” while also introducing new plan tiers “to cater to price-sensitive consumers,” Schindler suggested. The analyst noted that Netflix has introduced a mobile-only tier in India and other international markets. Schindler didn’t estimate how much of a potential subscriber lift Netflix could see by clamping down in unauthorized password sharing. But he cited a Bank of America survey of 1,000 U.S. adults found that 26% of respondents shared passwords with another household — which technically is a violation of Netflix’s terms of service.
Netflix Password Crackdown May Be “A Net Positive In The Long Term,” Analyst Claims
Netflix sent a message this week to some accounts with multiple users, threatening them with a service cut-off if illegally sharing passwords but offering the incentive of a free 30-day trial in certain territories. The message read: “If you don’t live with the owner of this account, you need your own account to keep watching.” Netflix said the move was “designed to help ensure that people using Netflix accounts are authorized to do so.”
Research company Magid claims 33% of Netflix users share their password with at least one other person. That led one analyst to cheer the attempt to cut-off the freeloaders while discounting the negative fallout from such actions during a pandemic that has left many stuck at home and unemployed.
“It’s pretty difficult to estimate the impact that it would have, but my sense is that it would be a net positive in the long term because I think the number of password sharers right now is a fairly meaningful number,” CFRA Analyst Tuna Amobi told Yahoo! Finance. “There would be some immediate negative impact in terms of churn. But it’s very easy to see how some of that impact would cancel out in terms of potential uptake from certain customers who were affected,” he said. Amobi suggested the crackdown was a loyalty test that could nudge those getting the service for free to subscribe themselves.
Netflix is far from needy. The company’s revenue in the fourth quarter of 2020 totaled more than $6.64 billion US, up from just over $1.18 billion in the corresponding quarter of 2019. Netflix estimates it will spend $19 billion on content this year.
Marvel Congratulates ‘Avatar’ For Reclaiming Global Box Office Crown: “We Love You 3000”
Marvel Studios, whose Avengers: Endgame was just eclipsed by Avatar, tweeted congratulations to Cameron, as well as producer Jon Landau and “all of the Na’vi Nation” for “reclaiming the box office crown.” In a reference to Endgame, the Marvel post said, “We love you 3000.”
With its rerelease in China this weekend, Cameron’s 2009 sci-fi pic overtook Marvel’s Avengers: Endgame, which had previously topped Avatar as the worldwide box office record-holder in July 2019. Through Saturday, Avatar‘s global box office is now estimated at $2.8B versus Endgame‘s $2.797B. The shift in box office fortunes was made possible by Avatar‘s current re-release in China which began on Friday and resulted in the movie adding over $12M through two days to close what had been a roughly $7.8M gap between it and Endgame
WarnerMedia Expects Half of HBO Max Subscribers to Be Outside U.S. by 2025
AT&T expects half of the 120 million to 150 million HBO Max and HBO subscribers it expects to sign up by the end of 2025 will be outside the U.S. market. On Friday, the telecom giant offered details to investors on how the international expansion of HBO Max starting this year will underpin subscriber and revenue growth for the streaming platform. "We are looking forward to building HBO Max's current U.S. momentum and begin to offer it across the globe," WarnerMedia CEO Jason Kilar told AT&T's investor day.
HBO Max is set to launch in 60 countries outside the U.S. this year — 39 territories in Latin America and the Caribbean in late June and another 21 territories in Europe in the second half of the year.
HBO Max AVOD Version Already Has $80 Million in Upfront Advertising Deals, WarnerMedia CEO Says
“Advertising, when executed thoughtfully and elegantly, is a powerful way to lower prices for everyone,” said Kilar, speaking Friday at AT&T’s analyst and investor day presentation. He didn’t reveal key details of the HBO Max AVOD tier like pricing or ad load.
In terms of content, the only difference between the ad-supported HBO Max and the regular $14.99-per-month premium service is that the the AVOD tier will not include the day-and-date Warner Bros. movie premieres throughout 2021, Kilar said — otherwise, “everything else will be the same.” In addition, Kilar also confirmed that the HBO Max AVOD version will not include advertising in HBO original series.
WarnerMedia Chief Jason Kilar Addresses HBO Max AVOD Plans And Progress So Far: “It’s Working”
The exec said HBO Max has about $80 million in advertising commitments for the ad-supported tier, which will launch in June. He said sports will not appear on HBO Max in 2021, a view contrasting with previous pronouncements by AT&T management. And by 2025, he expects the ratio of subscribers will be half in the U.S. and half elsewhere, a more international-heavy outlook than the expectations put forward in 2019.
“The economics of HBO Max’s growth are compelling,” Kilar said. “To use the U.S. as one example, we currently earn 90% in margin from each retail subscriber that we add.” Of the 41.5 million combined HBO and HBO Max subscribers domestically by the end of 2020, a minority is pure retail, but Kilar said the share is growing.
“The main difference will be with the theatrical premieres,” Kilar said of the new, lower-priced tier. Only those paying for the ad-free, top tier will continue to have access to day-and-date premieres of Warner Bros movies. “Everything else will be the same,” he said, reaffirming that HBO original series will not carry ads. Some AT&T executives had actively explored putting ads on HBO, to the angst of many inside the network, after the close of the Time Warner deal in 2018. As to content spending, which came in at $2.4 billion last year, Kilar said it will continue to grow, but he didn’t offer any forecasts.
T&T projects HBO revenue will hit $15 billion, up from $6.8 billion in 2020. Reflecting trends since launch, Kilar said, the majority of that $15 billion will come from streaming, not traditional linear carriage of HBO.
WarnerMedia CEO Jason Kilar’s 2020 Pay Package Totaled $52 Million With Big Stock Award
Jason Kilar, the CEO of WarnerMedia, earned a total of more than $52 million in 2020 according to an SEC proxy filing Thursday by parent AT&T. Kilar’s package was swelled by a large stock award worth over $49.2 million. His base salary was $1.6 million.
Netflix Sensation ‘Bird Box’ Is Getting A Spanish Spinoff Movie
The yet to be titled film, which will sit within David Kosse’s local-language slate at the streamer, is due to start production towards the end of this year in Spain. Cast has yet to be set....We hear this could be the first of multiple local-language Bird Box spinoffs.
Imax Sets New Opening-Day Box Office Record In Japan With ‘Shin Evangelion’
Scoring another record with a local title in Japan, Imax has had its best opening day ever for a film there with Shin Evangelion. Overall, the movie, which is the fourth and final installment in the Rebuild of Evangelion series, grossed nearly 828 million yen ($7.6 million). Of that, the Imax portion was $740,000.
The sci-fi animated movie also scored Imax’s highest ever opening day indexing for a local-language title in Japan, good for 10% of overall box office from only 1%-2% of total screens.
Apple Signs First Look Deal With Imagine Entertainment
Apple has struck a first-look deal Brian Grazer and Ron Howard’s Imagine Entertainment. The multi-year pact will see the banner produce a slate of scripted features, exclusively for the streamer.
Apple has also extended its existing first-look deal with Imagine Documentaries, first inked in Jan. 2019 prior to the launch of the streaming service. The two companies have since partnered on a couple of projects, including Bryce Dallas Howard's Dads, one of the first docs to debut on the streamer.
Brian Grazer and Ron Howard's Imagine has long been one of the biggest names in Hollywood, holding one of the richest deals in town at Universal for decades. But that deal ended in 2016, with Imagine not setting another feature deal until now.
Over the past year, the tech giant has signed pacts with big-name talents like Martin Scorsese, Idris Elba and Leonardo DiCaprio.