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NORTH AMERICA: 'Divergent' Debuts with Healthy $54.6M; 'Muppets Most Wanted' Underwhelms on March 24, 2014

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By Daniel Garris

Lionsgate's Divergent debuted comfortably in first place this weekend with $54.61 million. The highly anticipated young adult adaptation starring Shailene Woodley performed in line with its wide ranging expectations which fell anywhere from $50 million to $70 million heading into the weekend. Without adjusting for ticket price inflation, Divergent delivered the ninth largest debut ever for the month of March. The film generated the second largest opening weekend of 2014 thus far (behind only the $69.05 million start of The LEGO Movie). Divergent opened 21 percent below the $69.64 million start of 2008's Twilight and 102 percent above the $27.02 million debut of last year's Ender's Game. The film's very solid start this weekend is a good early sign for its two already announced sequels, Insurgent (set for March 20, 2015) and Allegiant (set for March 18, 2016).

While Divergent was helped by strong pre-sales driven by its built-in audience of fans, the film wasn't very front-loaded for a young adult adaptation. The film opened with $22.78 million on Friday (which included an estimated $4.9 million from late night showings on Thursday night), fell only 13 percent on Saturday to take in $19.85 million and declined 40 percent on Sunday to take in $11.97 million. That placed the film's opening weekend to Friday ratio at 2.40 to 1. In comparison, 2012's The Hunger Games had a ratio of 2.27 to 1, while Twilight had a ratio of just 1.94 to 1.

The more back-loaded start of Divergent is a good early sign going forward and was due at least in part to the film's somewhat surprising four-quadrant appeal. The audience breakdown for the film skewed towards female moviegoers (59 percent) and was roughly evenly split between moviegoers over and under the age of 25. Divergent received a strong A rating on CinemaScore, which is also a good early sign going forward.

Divergent grossed $4.8 million from 348 IMAX locations this weekend. That represented 8.8 percent of the film's total grosses this weekend. Grosses from all large screen format locations (including IMAX) represented just over 16 percent of this weekend's total grosses.

Disney's Muppets Most Wanted debuted in a distant second place with an underwhelming start of $17.01 million. The latest Muppets film opened below expectations and 42 percent below the $29.24 million opening weekend take of 2011's The Muppets (a figure which was deflated from that film opening on a Wednesday). Muppets Most Wanted was simply unable to create the same level of pre-release excitement that The Muppets did and was also hurt by arriving so soon after fellow family films The LEGO Movie and Mr. Peabody & Sherman. The four-quadrant appeal of Divergent also didn't help matters for Muppets Most Wanted this weekend.

Muppets Most Wanted opened with $4.66 million on Friday, increased 53 percent on Saturday to take in $7.15 million and fell 27 percent on Sunday to take in $5.20 million. That placed the film's opening weekend to Friday ratio at 3.65 to 1; a sure signal that the film is skewing heavily towards family audiences. The audience breakdown for the film skewed towards female moviegoers (54 percent) and moviegoers 25 years and younger (54 percent). Muppets Most Wanted received a respectable B+ rating on CinemaScore.

The weekend's other new major release, God's Not Dead, debuted surprisingly strong in fourth place with $9.24 million. The faith-based drama from Freestyle and Pure Flix averaged an impressive $11,852 for the frame from 780 locations. God's Not Dead delivered the largest opening weekend ever for Freestyle (the distributor's previous high-mark was the $5.78 million start of 2006's An American Haunting). Compared to other faith-based films, God's Not Dead opened 1.4 percent above the $9.11 million debut of 2011's Courageous and 35 percent above the $6.84 million start of 2008's Fireproof.

Along with the recent stronger than expected start of Fox's Son of God, the strong start of God's Not Dead appears to be signaling a resurgence at the box office for faith-based films. That could be good news for Paramount's Noah (which opens this coming Friday) and Sony's Heaven Is For Real (which debuts on April 16). God's Not Dead grossed $2.82 million on Friday, increased 18 percent on Saturday to take in $3.32 million and fell a very slim 6 percent on Sunday to take in $3.10 million. That placed the film's opening weekend to Friday ratio at a healthy 3.28 to 1.

Last weekend's top film, Mr. Peabody & Sherman, fell two spots and a significant 46 percent to place in third with $11.83 million. After a strong hold last weekend, the 3D computer animated film from Fox and DreamWorks Animation clearly took a hit from the arrival of both Divergent and Muppets Most Wanted in the marketplace this weekend. Mr. Peabody & Sherman surpassed the $80 million mark on Sunday and has grossed a respectable $81.13 million through 17 days of release. That places the film just behind the $81.50 million 17-day take of 2009's Cloudy with a Chance of Meatballs.

Warner's 300: Rise of an Empire and Disney's Need for Speed claimed fifth and sixth place respectively with weekend takes of $8.50 million and $7.94 million. 300: Rise of an Empire slid 56 percent from last weekend, while Need for Speed was down 55 percent. As was the case with many of the major holdovers this weekend, both action films likely took an extra hit from the stronger than anticipated appeal of Divergent with male moviegoers. To date, 300: Rise of an Empire has grossed a healthy $93.59 million in 17 days, while Need for Speed has grossed a lackluster $30.57 million in ten days.

Meanwhile on the limited front, Fox Searchlight's The Grand Budapest Hotel remained impressive with a seventh place take of $6.79 million from just 304 locations. That gave the much buzzed about Wes Anderson directed film a per-location average of $22,329 for the frame. With a 17-day take of $12.998 million, The Grand Budapest Hotel is running far ahead of the $3.73 million 2012's Moonrise Kingdom grossed in 17 days (though it should be noted that Moonrise Kingdom expanded much more slowly in comparison). Given its continued strength, The Grand Budapest Hotel is in great shape to continue to perform well as it expands into additional locations going forward.

Cinemaxx to Roll Out 100 Dolby Atmos Screens in Indonesia on March 24, 2014

Dolby_Atmos_l.jpgCinemaCon 2014, Las Vegas, March 24, 2014—Dolby Laboratories, Inc. (NYSE: DLB) and Lippo Group announced today that Cinemaxx, a new exhibitor under Indonesia’s Lippo Group, has committed to installing Dolby Atmos in 100 cinema screens over the next three or more years, with 30 of the 100 screens scheduled to be launched by the end of May 2015. With this news, the revolutionary new Dolby Atmos® cinema sound format reaches a significant milestone: more than 600 screens worldwide have now been or are scheduled to be equipped for Dolby Atmos.

Dolby Atmos unleashes the potential of sound in storytelling by giving filmmakers the creative freedom to easily place or move sounds anywhere in the movie theatre to create a lifelike, virtual reality of sound and the most engaging cinema experience ever.

“Dolby looks forward to working with Cinemaxx to bring the ultimate cinematic experience to moviegoers in Indonesia,” said Mahesh Sundaram, Vice President, Asia Pacific, Dolby Laboratories. “With Dolby Atmos, you feel as if you are in the movie, not merely watching it. We are confident that moviegoers will go back again and again to Cinemaxx once they enjoy their first Dolby Atmos film.”

“Our goal is to offer state-of-the-art technology with first-class amenities,” said Brian Riady, CEO, Cinemaxx. “With Dolby Atmos, we aim to take the Indonesian cinematic experience to the next level.”

Dolby Atmos has quickly become the preferred choice for next-generation cinema sound among major studios, award-winning filmmakers, and exhibitors around the worldTo find a Dolby Atmos equipped theatre and showtimes, please visit www.fandango.com/dolbyMovie patrons who would like to experience Dolby Atmos can visit iwantdolbyatmos.dolby.com  or check with their local cinema for select showtimes when tickets become available.

INTERVIEW - CinemaCon 2014 Triumph Award: Pepe Batlle - Former COO, UCI/Cinesa Continental Europe on March 23, 2014

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CINEMACON TRIUMPH AWARD

Jose (Pepe) Batlle

Former COO, UCI/Cinesa Continental Europe

Interview By Daniel Loria

Jose Batlle is the former COO of UCI/Cinesa in continental Europe. He was responsible for seeing management and direction in five key European territories: Spain, Portugal, Italy, Germany, and Austria. A 28-year veteran of the exhibition industry, Batlle retired from his post earlier this year.

BoxOffice recently spoke with Batlle in a wide-ranging conversation about his career and the state of the global exhibition market.

How did you come to work in this industry?

Michael Forman was in charge of Pacific Theatres in 1986 and was also overseeing Cinesa in Spain. Cinesa had finished 1985 with heavy losses and Michael decided to change the management. I was selected by Spencer Stuart Management Consultants to restructure and reorganize Cinesa and see if we could generate profits.

Those profits happened at the end of 1986, and in 1989 we opened the first multiplex. From 1989 to 1991 we opened additional multiplexes in Spain, and I approached Michael with an aggressive expansion plan to build even more multiplexes across Spain. He thought it was a great idea but wanted to go in with a partner because he wasn’t keen on investing so much money in Spain at that time. That’s when we came into contact with Paramount and Universal; they operated UCI and were building multiplexes in England and Ireland and had begun an expansion into Germany. They had also just started to look into Spain, and that’s how we came up with our joint venture—Cinesa UCI—for the Spanish market.

In 1992, Michael Forman decided to sell his 50 percent of the company to UCI. This meant that Cinesa went from being a family-owned company to a multinational corporation.

In 1995, the executives at Paramount and Universal asked me to open multiplexes in Brazil. So while we were undergoing an aggressive expansion in Spain, we were simultaneously expanding aggressively in Brazil as well. I spent seven years of my life traveling between Spain and Brazil, where I opened 111 screens.

I was asked to take over Italy in 1998, where we didn’t have a single multiplex at the time. We opened our first multiplex there the following year and today we have 450 screens in Italy.

In 2003 they asked me to take over Germany and Austria, which were coming off big losses. But in 2004, Paramount and Universal sold UCI to Terra Firma, without including Brazil in the deal. This took me from working at a multinational into working for a private equity firm. By that time, I was already senior vice president of continental Europe, and Terra Firma made me COO of the same region.

We started growing rapidly because of acquisitions. From 2004 until I retired this year, we acquired 10 companies in Italy, Germany, Portugal, and Spain. We now have more than 1,200 screens across continental Europe and we are the largest exhibitor in the whole of Europe.

What is the biggest change you’ve noticed since you began your career in the industry?

There have been several changes. When I first started in the industry, cinema was in a downswing. The arrival of multiplexes changed that, and the sector began to grow rapidly.

Secondly, there were too many small exhibitors all across Europe. The market is more uniform now. For example, the UK has three important players, Spain has two or three, Italy has two, and Germany has three. This wasn’t the case before; there used to be a lot more regional players in every country.

I have also seen a dip in admissions, and it has been a big shift for our markets. The way we watch movies has changed so much. Consumers can easily access a movie anywhere they want, even through piracy.

I can’t forget to include the influence of digitalization. The analog era is over in our business, everything is digital today.

There have been extraordinary changes in the industry throughout my 28 years working in exhibition.

What is your perspective on the European market today?

It’s hard to speak about the “European market” as such; we have to speak about each country individually. When I arrived in Germany, the market was in a crisis. Now Germany is showing big gains and exhibitors in the market are working better. There were no multiplexes when I arrived in Italy and now it’s a healthy market.

Spain is a very different case. We entered a very serious financial crisis as soon as there was a surge in multiplexes, and attendance dwindled soon thereafter; in 2004 attendance was around 145 million and today it’s down to 78 million. The market shrank in half from 2003 to 2014.

What are the drivers of sustained growth in a market?

Disposable income and purchasing power are very important, as is the cultural environment: a university presence, the number of people living in urban versus rural areas. The quality of an exhibitor’s installations is also an influence.

The key factor, however, rests with national film production. Italy has a very healthy production industry; about 30 to 35 percent of the country’s annual attendance comes from national films. Germany has good years and not-so-good years, but maintains a consistently good level of quality in its productions. Unfortunately, that is not the case in Spain. Spanish cinema has not been able to attract enough of its own audience.

The current economic crisis is also playing a big role. We used to say that the exhibition business was immune to a country’s economic problems. That is no longer the case. People today have more alternatives and the quality of in-home entertainment has grown tremendously. Exhibition will have to completely reinvent itself in order to convince people to leave their homes and watch the same film at the cinema.

Which markets show the most potential for growth?

You have to enter the market when commodities are low and sell when they are high. Spain is at a very low point right now, so I consider it to be a market that can grow again in the future. I think Germany and Italy still have strong potential for growth, too.

I’d approach England with caution. There are a lot of multiplexes being built and they have to be careful not to make the same mistake as Spain, where there were too many screens built in relation to the country’s population.

Brazil has grown a great deal. The country has doubled is attendance figures since I arrived there in 1995, and I believe it can continue growing. Every day in Brazil you have more people joining the middle class.

China is an impressive market. I think that it will grow in a tremendous way. The issue there has to do with the business climate, where entering the market can be complicated. There’s also great potential for growth in Russia.

What is the situation in Spain?

In Spain you have a combination of several factors. Firstly, Spain should never have tried to reach 145 million spectators. I think the normal figure for Spain is around 100 million.

Why was that estimate so high? Because there was a big real estate boom and a large number of shopping centers were built, and every shopping center had to have its own multiplex.

We have had as many as 4,600 screens in Spain. That is just stupid. The capacity according to the number of people living in Spain should not be more than 2,500 screens. Right now we have 3,800, so I believe there should be even more closures until we get to 2,500, maybe 3,000 tops, but that’s pushing it.

The economic crisis is affecting attendance. People have less disposable income and they stay home instead. Pricing is therefore important.

Perhaps the most important factor, however, is piracy. Spain is the most piratical country in Europe and among the most piratical in the world. The culture around piracy in Spain is horrible; even schoolteachers educate with illegally downloaded material. The consumer doesn’t see piracy as a bad thing, and that’s fatal. There need to be firm laws in place that work against piracy. We also have to educate people to understand that downloading content without paying for it is the same as stealing from Macy’s—it’s exactly the same thing: you’re stealing.

What is the importance of CinemaCon for international companies?

I think that CinemaCon is an important event for any exhibitor that cares about its business and the trends in the marketplace. It’s great for networking with people from other countries, learning more about best practices, and seeing the films that will be released in the coming months. It’s an event that exhibitors can’t afford to miss. CinemaCon isn’t only for the North American market anymore; it’s a global event.


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