David Passman doesn't shy away from challenges. The president and CEO of Carmike Cinemas has firsthand experience in guiding a company through a changing marketplace in the face of digital innovations. He joined the regional exhibitor in 2009 after acting as CEO of IBS-STL Inc., a book publishing and distribution company, coming into the exhibition industry as the transition to digital and premium formats was in full swing. Passman also acts as the chairman of NATO, a role that brings an array of responsibilities and necessitates understanding the industry's concerns and challenges in today's marketplace.
BoxOffice CEO Julien Marcel caught up with Passman at this year's edition of ShowCanada to get his take on the most recent trends in exhibition and ask Passman about his roles at Carmike and NATO.
Regarding the Screenvision acquisition, is the single-player situation a good situation? What's your take on that?
I view it as good primarily because national advertisers in the U.S. have been finding it difficult to get their campaigns going across large and small DMAs. Dealing with two companies is a lot of work for very little advertising budget. National advertisers in the U.S. spend billions of dollars, and they spend very little in cinema. And even if they used up all of our available screen time, they still would be minor amounts of advertising budget relative to their at-home, or even in- and out-of-home, advertising budgets. So, it's an inconvenience for them, for the national advertisers, to do business with us. Some of the ones that we have particularly struggled with have been large franchises, for instance. We see this merger as good for advertisers, we see it as a nonevent for consumers, and we see it as very beneficial for us in exhibition
You've been in the headlines a lot recently, not only with your role in Screenvision but also with the recent acquisition of Digiplex. Where does this acquisition take you on your path toward your locations target? Is it a step in your development, or is it your endgame?
We have stated a strategic objective of 300 locations and 3,000 screens, and this acquisition will get us within about 20 locations of 300. It is wonderful for us to be that far along this early. We only announced this objective about a year and a half ago. At this stage, we haven't said publicly and we don't know if this size is the final step or an interim step. At this point, what we do know is that 300 sites and 3,000 screens is manageable by our current infrastructure-all of our home-office people, our accounting systems, our payroll systems, the technology we have, and the people that we have. We will have to digest those acquisitions for several months. Then we will have a good feel for how much more scalable our systems and people and processes are. And if they are, then we might very well want to continue to grow. What I don't want to do is to grow revenue, number of locations and level of difficulty of running a company but not be able to return anything to the shareholders through net income.
There is a trend in the market toward more and more consolidation. Where do you see this trend stopping, and when does it start hurting the industry as opposed to helping it?
I believe that most mature industries that have many individual or small owners find a need to consolidate at some point. That happened in sporting goods, in grocery stores, in department stores, all kinds of specialty retail stores. And the reason is really simple. When the industry matures-and we certainly are a mature industry- the only way you can grow profits for your shareholders is to consolidate in order to eliminate inefficiencies in administrative expenses and take advantage of better purchasing power than smaller organizations. This trend also provides an opportunity for the smaller independents to leave a legacy and to secure their family wealth.
Can you tell us about the strategy that you have implemented in running Carmike?
I think the strategy that my team and I put in place when I came on board saved our company. It was headed off the cliff and was in fairly significant financial distress. There were several things we did, but I believe one of the most important was convincing our theater managers and their staff to look at their theater properties the same way our guests look at theater properties. If they can just imagine the experience through the eyes of our customers, they will make good decisions on how to serve them. And they began doing that right away. We had several facilities that were not very well maintained in our circuit five years ago, and now I would say we are one of the best-maintained physical facilities in the industry.
We started with the physical plant, then we addressed the human resources, and finally we have focused on increasing revenue. We wanted to get our customers back to our theaters, and then we wanted them to spend more. We made sure that they knew where we had bargains... We have been pretty passionate about increasing concessions sales-a very large gross margin.
At the corporate level, we created an initiative called "low-hanging fruit." I just asked the question: "What can we do to improve our cost structure without negatively impacting our customers or our employees?" We came up with 25 multimillion-dollar cases of things that could be improved, things like old contracts with telephone suppliers, property taxes on theaters that we had abandoned, things like that. The combination of the low-hanging fruit initiative and the concessions revenue increase allowed us to pay down over a hundred million dollars of debt. For the size company we were, that was a very big improvement.
Dining initiatives are an emerging trend in the industry. You have experimented with different types of dining, from premium to casual. What have you learned from those experiences?
I am still learning about it, quite honestly.
Over the last three years, we have been studying the different kinds of dining opportunities. Some include single auditoriums with tableside dining service, where waitstaff will take your order and deliver your order. Some include full theaters; some include all auditoriums allowing food, but you have to get your food, order your food at the restaurant outside the auditorium; some have service where you can order your food before the showtime in the auditoriums, but once the shows start, no more service.
The most sustainable, with few exceptions, are the auditoriums that have casual dining, reasonably priced, middle-market white-collar down to light-blue-collar clientele, with adult beverages, alcohol service, and plenty of choices that are not egregiously priced. Theaters such as Studio Movie Grill, Movie Tavern, and Alamo Draft House are all reaping the rewards of being the first movers in this. Their theaters do very well on attendance, and they appear to be very profitable. I think that is the model that we will deploy most often in the future. We've got two or three of those that we expect to have in service around Thanksgiving this year and, if our study is correct, and they work, we will roll out several of those every year.
What are the current results of the promotional activity you have developed-Stimulus Tuesday?
What we have found is that people generally are looking for value. Our Stimulus Tuesday promotion was aimed at bringing people into the movie theater during the downtime or slow period. What we found is that by offering very significant discounts on a couple of concession items, it made people want to be there without having to give them a discount on admission tickets. On a Tuesday we now see younger people dating, we see grandparents taking grandkids, we see senior citizens coming, and almost all of them buy the highly discounted concession items on that Tuesday, whereas, in the past on a weekday, concession items would be a lesser percentage of sales. What I find amazing is that we see people that come on Stimulus Tuesday because it's Stimulus Tuesday, but they don't take advantage of the discounts. They still buy large popcorns and large soda, but it's a cool place to be on Tuesday. So crowds beget crowds, and Tuesdays are now a fun time at Carmike.
In a recent column in BoxOffice, John Fithian highlighted the concern at the number of movie theaters outside of New York and L.A. with the potential current lack for enough movies. Do you see the diminishing number of releases from studios as a reality that theaters around the country are already facing?
I know some of the major studios are cutting back on some of the number of movies that they provide, and for me as an exhibitor, the more movies we have the better. So I think John is correct in saying we'd rather not see a reduction. On the other hand, we show well in excess of 300 unique movies a year, and we don't currently have a lack of product.
My dream is for all studios to spread out all movies throughout the calendar year. The tradition and the history of seasonality in movies has been challenged the last few years with huge success. It started with Katzenberg's releases in March for kids-that was highly successful. Disney released Alice in Wonderland in March 2010, and it was a very successful March movie. Before that no one ever thought a movie could be successful in March. And then, of course, Lionsgate came out with Twilight and Hunger Games, and those have been successful. A little movie in October called Gravity [laughs]-nobody thought an October release could be successful. And over and over again, what we're finding is that movies can be successful any time of the year. I certainly appreciate the difficulty of taking a unique film and taking a chance with a new "time zone," but it has been successful for those who have tried it.
What are your thoughts on alternative content? Has it already proved successful?
I'm in, hook, line, and sinker! I've been passionate about it for a long time. I just haven't been able to do anything about it. Now that the other three major exhibitors are all digital, we have a lot better chance of getting more alternative programming. And one of the hidden assets of Digiplex, and why I was so anxious to get that acquisition done, is that this company is run by an industry icon [Bud Mayo] who is a genius at alternative programming. I'm hoping we can convince him to stay on with us and help us achieve, in the bigger combined company, the same level of success that he has at Digiplex.
Digiplex is the only exhibitor I am aware of in the nation, and probably in North America, that has nearly 5 percent of its box office in alternative programming. Imagine what that would do for us if we could get to 5 percent revenue. That would be fantastic! And that would be off-peak hours.
One year ago you surprised the market by entering into a relationship with MovieTickets on top of the existing relationship with Fandango. What was your vision then, and what's the status one year later?
We love our relationship with Fandango as well as our relationship with MovieTickets.com. But, for me, it gets down to one simple thing: our consumer. Our valued guests should be able to purchase tickets in any medium that they want. I don't like the notion of them being forced to Fandango or to MovieTickets or to any other supplier. I believe they ought to come to Carmike, and if they love the ads that Fandango runs, then go to Fandango and buy it. If they love the ads that MovieTickets run, they can buy it there. For me, it's access, and consumers want multiple access points and I want to give it to them. The reason we didn't renew an exclusive arrangement with Fandango is just that. It wasn't money for me, but I believe that is an important ingredient for consumers.
You've been the chairman of NATO for a couple of years now. What is it that keeps you passionate about this part of your responsibilities? What do you want to achieve?
I love my role in NATO. I've been chairman almost three years now, two and a half years. Near the end of my first two-year term, the nominating committee nominated me for a second term. That was somewhat unprecedented, and I was honored to do it, not because I'm such a good chairman, but just because I love being in the role.
The thing I came into the chairman role with, and the thing I hope to continue in my tenure, is we had burned a lot of bridges between us and studios by taking hardline positions against each other. It was primarily around windows and the premium VOD. We truly don't believe premium VOD is a good answer. The life of any movie should be stretched as long as possible in as many different windows as possible ... The benefit that exhibition gives studios is enormous for the lifetime value of a new movie. We believe we can be important partners in that. We had restored a lot of poor relationships with studios in my very first six months, just by taking a different approach. If the studios fail, we fail. If they can't give us movies, we don't have anybody to sell popcorn to. And if we don't have great facilities for them to show their movies in, people are not going to continue to come to our movie theaters. So, it's a highly dependent relationship. We're in this together, why not work together?
By Daniel Garris
Fox's Dawn of the Planet of the Apes was off to a strong start this weekend with $72.61 million. The 3D sci-fi action sequel opened ahead of its lofty pre-release expectations and an impressive 32.5 percent stronger than the $54.81 million debut of 2011's Rise of the Planet of the Apes. Dawn of the Planet of the Apes was helped out by a number of factors this weekend, including very strong critical reviews, the already strong reception to Rise of the Planet of the Apes, a relatively empty marketplace for the middle of July and the added advantage of higher priced 3D admissions (which Rise of the Planet of the Apes didn't have).
Dawn of the Planet of the Apes opened with $27.65 million on Friday (which included an estimated $4.1 million from late night shows on Thursday), fell 8 percent on Saturday to take in $25.50 million and declined 24 percent on Sunday to gross $19.47 million. That placed the film's opening weekend to Friday ratio at an encouraging 2.63 to 1. Dawn of the Planet of the Apes received a solid A- rating on CinemaScore, which is also an encouraging sign. Going forward, the film will hope to follow in the footsteps of Rise of the Planet of the Apes, which held up very nicely back in 2011 (that film registered a total gross to opening weekend ratio of 3.23 to 1).
After topping the box office for the past two weeks; Transformers: Age of Extinction fell to second this weekend with $16.30 million. The fourth installment of Paramount's blockbuster sci-fi action franchise fell a sharp 56 percent, as it took a clear hit from the arrival of Dawn of the Planet of the Apes in the marketplace this weekend. Transformers: Age of Extinction surpassed the $200 million mark this weekend and has grossed $208.83 million through 17 days of release. While that is in line with the lower end of expectations, it also places the film a significant 27.5 percent behind the $287.87 million 17-day take of 2011's Transformers: Dark of the Moon.
Warner's Tammy was down one spot from last weekend to claim third with $12.56 million. The Melissa McCarthy comedy vehicle was down a solid 42 percent, though it should also be noted that last weekend's performance was deflated a bit by the film's Wednesday opening. Tammy continues to perform well (especially with its modest price tag in mind) with a twelve-day take of $56.999 million. That places the film 38.5 percent behind the $92.64 million twelve-day take of last year's The Heat. Tammy will face new direct competition next weekend when Sony releases fellow comedy Sex Tape on Friday.
High-profile holdovers 22 Jump Street and How to Train Your Dragon 2 claimed fourth and fifth place this weekend with respective takes of $6.50 million and $6.07 million. Sony's 22 Jump Street was down 34 percent from last weekend, while Fox's How to Train Your Dragon 2 fell just 32 percent. Both films were aided this weekend by the overall marketplace being slow by usual mid-July standards. Respective 31-day totals stand at an impressive $171.76 million for 22 Jump Street and an underwhelming $152.28 million for How to Train Your Dragon 2.
In their second weekend of release, Relativity's Earth to Echo and Sony's Deliver Us from Evil placed in sixth and seventh respectively with $5.49 million and $4.75 million. Earth to Echo was down a healthy 34 percent from last weekend, while Deliver Us from Evil was down an underwhelming 51 percent. Respective twelve-day totals stand at a respectable $24.59 million for Earth to Echo and at a softer than expected $25.05 million for Deliver Us from Evil.
Upon expanding into moderate release, The Weinstein Company's Begin Again placed in ninth with $2.82 million. The John Carney directed film starring Keira Knightley and Mark Ruffalo averaged a respectable $3,004 for the frame from 939 locations. The 17-day total for Begin Again stands at $5.17 million.
On the platform front, IFC Films' Boyhood was off to a very strong start with $387,618 from five locations in New York and Los Angeles. That gave the critically acclaimed Richard Linklater directed film an impressive per-location average of $77,524. That represented the second highest per-screen average of 2014 thus far for a platform launch (behind only The Grand Budapest Hotel). Boyhood will expand into additional locations next weekend.
Sunday Update: Fox's Dawn of the Planet of the Apes was off to a strong start this weekend with an estimated $73.0 million. The 3D sci-fi action sequel opened ahead of its lofty pre-release expectations and an impressive 33 percent stronger than the $54.81 million debut of 2011's Rise of the Planet of the Apes. Dawn of the Planet of the Apes was helped out by a number of factors this weekend, including very strong critical reviews, the already strong reception to Rise of the Planet of the Apes, a relatively empty marketplace for the middle of July and the added advantage of higher priced 3D admissions (which Rise of the Planet of the Apes didn't have).
Dawn of the Planet of the Apes opened with $27.73 million on Friday (which included an estimated $4.1 million from late night shows on Thursday), fell 8 percent on Saturday to take in $25.500 million and is estimated to decline 22.5 percent on Sunday to gross $19.78 million. That places the film's estimated opening weekend to Friday ratio at an encouraging 2.63 to 1. Dawn of the Planet of the Apes received a solid A- rating on CinemaScore, which is also an encouraging sign. Going forward, the film will hope to follow in the footsteps of Rise of the Planet of the Apes, which held up very nicely back in 2011 (that film registered a total gross to opening weekend ratio of 3.23 to 1).
After topping the box office for the past two weeks; Transformers: Age of Extinction fell to second this weekend with an estimated $16.5 million. The fourth installment of Paramount's blockbuster sci-fi action franchise fell a sharp 55 percent, as it took a clear hit from the arrival of Dawn of the Planet of the Apes in the marketplace this weekend. Transformers: Age of Extinction surpassed the $200 million mark this weekend and has grossed $209.03 million through 17 days of release. While that is in line with the lower end of expectations, it also places the film a significant 27 percent behind the $287.87 million 17-day take of 2011's Transformers: Dark of the Moon.
Warner's Tammy was down one spot from last weekend to claim third with an estimated $12.91 million. The Melissa McCarthy comedy vehicle was down a solid 40 percent, though it should also be noted that last weekend's performance was deflated a bit by the film's Wednesday opening. Tammy continues to perform well (especially with its modest price tag in mind) with a twelve-day take of $57.35 million. That places the film 38 percent behind the $92.64 million twelve-day take of last year's The Heat. Tammy will face new direct competition next weekend when Sony releases fellow comedy Sex Tape on Friday.
High-profile holdovers 22 Jump Street and How to Train Your Dragon 2 claimed fourth and fifth place this weekend with respective estimated takes of $6.7 million and $5.87 million. Sony's 22 Jump Street was down just 32 percent from last weekend, while Fox's How to Train Your Dragon 2 fell 35 percent. Both films were aided this weekend by the overall marketplace being slow by usual mid-July standards. Respective 31-day totals stand at an impressive $171.96 million for 22 Jump Street and an underwhelming $152.07 million for How to Train Your Dragon 2.
In their second weekend of release, Relativity's Earth to Echo and Sony's Deliver Us from Evil placed in sixth and seventh respectively with $5.5 million and $4.7 million. Earth to Echo was down a healthy 34 percent from last weekend, while Deliver Us from Evil was down an underwhelming 52 percent. Respective twelve-day totals stand at a respectable $24.59 million for Earth to Echo and at a softer than expected $25.00 million for Deliver Us from Evil.
Upon expanding into moderate release, The Weinstein Company's Begin Again placed in ninth with an estimated $2.94 million. The John Carney directed film starring Keira Knightley and Mark Ruffalo averaged a respectable $3,126 for the frame from 939 locations. The 17-day total for Begin Again stands at $5.29 million.
On the platform front, IFC Films' Boyhood was off to a strong start with an estimated $359,000 from five locations in New York and Los Angeles. That gave the critically acclaimed Richard Linklater directed film an impressive per-location average of $71,800. That represented the second highest per-screen average of 2014 thus far for a platform launch (behind only The Grand Budapest Hotel). Boyhood will expand into additional locations next weekend.
Saturday Update: Fox reports that Dawn of the Planet of the Apes amassed $27.7 million on Friday, including late Thursday night's $4.1 million take. BoxOffice projects the sequel will tally an impressive $70 million this weekend, handily topping Rise of the Planet of the Apes' $54.8 million debut three summers ago.
Early word of mouth appears very strong with a 93 percent Flixster user score, as well as a 90 percent fresh rating from Rotten Tomatoes critics. Since the start of summer, only fellow Fox release X-Men: Days of Future Past has posted a higher Flixster score on the day following release. Fox's The Fault In Our Stars also boasted a 93 percent vote.
Meanwhile, Transformers: Age of Extinction handed off the top spot to Apes as the former added $4.8 million for its third Friday. Extinction's domestic total now stands at $197.4 million and will cross the $200 million threshold early Saturday.
Check BoxOffice on Sunday for official weekend estimates from the studios.
Friday Update: Sources tell BoxOffice that Dawn of the Planet of the Apes is eyeing an opening day around the $25 million mark. If that holds, the well-reviewed sequel could hit $65 million for the weekend.
Check back Saturday morning for official studio estimates for Friday and early weekend projections.
Previously: According to Fox, Dawn of the Planet of the Apes grabbed $4.1 million from Thursday evening shows.
By comparison, Fox's The Wolverine took in $4.0 million last July before heading toward a $53.1 million opening weekend, while this year's Maleficent posted $4.2 million on Thursday ahead of a $69.4 million weekend.
For reference, Rise of the Planet of the Apes took in $1.4 million from midnight-only shows three years ago, but its nature as a reboot without the increased anticipation of Dawn skews any comparisons between pre-Friday numbers.
More to come...
The Transformers won’t let up their command of the global box office. The fourth installment of the action franchise added $102 million overseas to surpass the half-billion mark outside of North America after just three weekends. The worldwide cume for Transformers: Age of Extinction is now $543.5 million. The film continues to thrive in IMAX, where it has grossed $68 million worldwide.
The new Transformers film posted the biggest opening weekend of 2014 while recording a franchise-record $20.4 million bow in the UK. China continues to lead the hold-overs with another $25 million frame. The latest Transformers film is the highest-grossing foreign film of all time in China with $262.2 million.
How to Train Your Dragon 2 is flying just under the $200 million mark overseas. The animated sequel added $34.4 million to its coffers over the weekend, just a step shy of a major milestone with $199 million from 62 markets. The film has grossed $350.9 million worldwide.
Dawn of the Planet of the Apes was unleashed in 26 markets and grossed $31.1 million from 4,903 screens. The film took the #1 spot in 14 of those markets, including an $11.4 million debut from 910 screens in South Korea. Other tope performing bows include Australia ($6.6m), India, ($2M), and Malaysia ($1.9 M). The film expands to 29 more markets next weekend, including key openings in Russia and the UK. The latest Apes begins its global roll-out with an $104.1 million global cume.
Disney has retained the #1 spot in Japan for 18 consecutive weekends. The studio took the first 16 in the country through the miracle run of Frozen in the market, with the latest two frames being dominated by Maleficent. The live-action film added $13.4 million from 45 territories over the weekend, bringing its overseas cume up to $447 million. Maleficent has grossed $668.9 million worldwide. Top markets for the film include China ($46M), Mexico ($45.2M), Russia ($37.2M), Brazil ($31.1M), and the UK ($30.2M).
The Fault in our Stars earned $7.8 million from 44 markets to raise its overseas total to $118.4 million. The drama has grossed $237.9 million worldwide.
22 Jump Street jumped to an overseas cume of $81.7 million after adding $6.3 million from 37 territories this weekend. The comedy has grossed $253.6 million worldwide.
Edge of Tomorrow found another $3.9 million this weekend from 60 markets. The sci-fi flick starring Tom Cruise is now up to $256 outside of North America and $350.5 million worldwide. Top markets for the film include China ($63.6M), South Korea ($37.8M), and Russia ($21M).
Blended grossed $3.7 million from 53 markets to take its overseas cume up to $48.8 million. The comedy has grossed a total of $93.1 million worldwide.
X-Men: Days of Future Past crossed the $500 million mark overseas this weekend. The film earned $2.6 million from 26 markets in its latest frame and has now grossed $733.4 million worldwide.
Rio 2 added $2.6 million from 9 markets to its overseas haul. The film has now grossed $360 million outside of North America and $489.6 million worldwide.
A Million Ways to Die in the West collected another $2.5 million from 35 territories to reach an overseas cume of $39.5 million. The Western comedy has grossed $81.9 million worldwide.
Neighbors crossed the $250 million mark worldwide after adding $1.8 million from 31 overseas territories this weekend. The comedy has grossed a total of $103.2 million outside of North America with seven more territories scheduled to open over the next few months. Neighbors has grossed $251.8 million worldwide.
Jersey Boys continues to struggle at the box office. The musical directed by Clint Eastwood added $1.75 million from 15 territories to reach a $10 million cume overseas. The film has grossed $51.7 million worldwide.
Deliver Us from Evil earned $1.4 million from 22 territories, raising its overseas total to $4.7 million. The horror film has grossed $29.7 million worldwide.
By Daniel Garris
In what should be its last day at the top of the daily box office, Transformers: Age of Extinction led the way on Thursday with $3.45 million. The fourth installment of Paramount's blockbuster sci-fi action franchise was down 6 percent from Wednesday and down 64 percent from last Thursday's inflated July 3rd performance. Wide releases declined a bit in general yesterday due in part to Fox's Dawn of the Planet of the Apes entering the marketplace on Thursday evening. Transformers: Age of Extinction was the week's top film with a weekly haul of $54.19 million. That was down 61 percent from the film's opening week performance and brings the film's two-week total to $192.53 million. Transformers: Age of Extinction continues to perform in line with its lofty expectations, but is running a sizable 29.5 percent behind the $273.01 million 14-day take of 2011's Transformers: Dark of the Moon.
Warner's Tammy held steady in second place with $2.45 million. The Melissa McCarthy comedy vehicle fell 4 percent from Wednesday and 56 percent from last Thursday. Tammy took second place for the week with $32.71 million and has grossed a very solid $44.44 million in nine days (especially with its modest price tag in mind). Tammy is currently running 44 percent behind the $79.39 million nine-day start of last year's The Heat (which opened on a Friday).
It continued to be a very tight race for places third through sixth on Thursday, with only $325,235 separating third place from sixth place. How to Train Your Dragon 2 took in $1.33 million to remain in third. The 3D computer animated sequel from Fox and DreamWorks Animation was down 4 percent from Wednesday and down 46 percent from last Thursday. How to Train Your Dragon 2 placed in fourth for the week with $14.95 million. That represented a 34 percent decline and brings the film's four-week total to $146.20 million.
Sony's 22 Jump Street finished very closely behind in fourth with $1.32 million. The successful action comedy sequel trailed How to Train Your Dragon 2 by a very slim $6,956 for the day. 22 Jump Street was down 4 percent from Wednesday and down 47 percent from last Thursday. The film placed in third for the week with $15.79 million. That was a 37 percent decline from the previous frame and brings the film's 28-day total to an impressive $165.26 million.
Earth to Echo rounded out the day's top five with $1.26 million. The adventure family film from Relativity fell 3 percent from Wednesday and 51 percent from last Thursday. Earth to Echo placed in sixth for the week with $13.89 million and has grossed a respectable $19.10 million in nine days, due in part to relatively stronger midweek business than weekend business thus far.
Sony's Deliver Us from Evil claimed sixth place with $1.00 million. The crime horror film starring Eric Bana was down 9 percent from Wednesday and down 62 percent from last Thursday. Deliver Us from Evil took fifth place for the week with $14.79 million and has grossed a softer than expected $20.30 million through nine days.