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INTERVIEW - CinemaCon 2014 Passepartout Award: Craig Dehmel - SVP Sales & Strategic Planning, 20th Century Fox International on March 23, 2014

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CINEMACON PASSEPARTOUT AWARD

Craig Dehmel

Senior Vice President, Sales & Strategic Planning

20th Century Fox International

Interview By Daniel Loria

Craig Dehmel had a hard time finding the right position after graduating from a small liberal arts college with a history degree. His grammar skills landed him at an advertising firm based in Burbank, California, where he picked up experience as a theater coordinator between studios and exhibitors.

An MBA from UCLA launched him into a marketing career at Fox, where his analytic and strategic skills eventually led to a position in the sales department. He would go on to work on the international releases of some of the studio’s biggest hits of all time, including Avatar, two Ice Age sequels, and Life of Pi.

BoxOffice spoke with Dehmel to discover more about his role at Fox and the company’s upcoming slate of films.

Could you tell us about your current role?

I work at the sales and strategic planning department. The sales side is really the sales reporting side. I have a small group of people working with me in L.A., and we keep our systems and box office estimates up to date.

On the planning side, we do the dating for all our films. We come up with estimates of what we think our films are going to do. We do a lot of competitive analysis and analysis on the seasonality of releasing films. We’re constantly looking at what genres are working where; which regions work better for certain things; and where the growth is in the business. It’s a lot of analysis: looking at the industry landscape and seeing how it’s working and changing.

There’s a third part, smaller but very important—the sales operations side: managing the digital deployments around the world and making sure that the transition to digital is happening quickly because we’re running out of 35 mm stock. Thirty-five millimeter becomes more and more expensive as there is less of a need for it, and that is an issue for us in places that have been slower to transition to digital, those markets usually coincide with less commercial screens for us. If our 35mm print costs are higher but we’re only shipping 35mm prints to lower-grossing theaters, we really have a problem. It behooves us that markets transition to digital as quickly and easily as possible so we don’t have to do an inventory of our prints. Before it was just sending canisters with films in them, more recently it has been sending hard drives with digital cinema packages, and now we’re starting to get into satellite transmission.

Which regions show the most promise in the coming years?

We do very well in Latin America. They are consistently strong performers for us. The biggest problem we have there is that the currencies tend to be unstable, so while we can come out with a great result in the local currency, the grosses can come out taking a beating against the dollar.

Southeast Asia is a strong place for us. Places like Malaysia and Indonesia are strong up-and-coming markets with big populations and there’s real promise for growth.

Russia went through a growth in the last decade and it’s still growing but not nearly at the same rate as it was. China is obviously the biggest growth market, but you can’t get all your films in, so it’s very hard to plan when you don’t know which films are going to play. We still look at China as a bonus. The Middle East is a strong growth area, Eastern Europe as well.

Even in some of the mature markets you have potential for growth. Australia is a place that continues to do well; it’s a strong market with high-frequency moviegoing, so that’s a great part for us as well.

Don’t get me wrong, we’re not down on Western Europe, but like the U.S., it’s very mature. The growth there isn’t significant from year to year.

Fox is taking a big risk in releasing 'How to Train Your Dragon 2' in Brazil during the World Cup. Can you shed some light on that decision?

It’s a huge risk, but the fact is that we have enough years of seeing how films play during European Cups and World Cups to make a judgment call. The decision came down to this: do we push back How to Train Your Dragon 2 to July and go up against, at the time, the latest Fast & Furious and the new Transformers, Guardians of the Galaxy, or our own Planet of the Apes?

There are a lot of big movies this summer and waiting until after the World Cup is over has an air of risk as well. You might not be fighting the World Cup anymore, but you’re going up against three or four other films.

The other issue is that holidays are over come the end of the Cup. In South America you have short winter holidays that end in the middle of July, when the World Cup is over. In Brazil they aligned the holidays with the World Cup so people would have time to enjoy the tournament.

What we’ve seen is that when there aren’t games happening, people go to the movies. We expect there will be days when no one will go to the movies during the Cup. On days there are no games, or games that aren’t important to people in the region, people will be going to the movies.

And there are still people that aren’t really watching the games as fervently. There are going to be parents who feel guilty about keeping the kids at home while they watch all these games. We feel we will have big box office on non-game days and take losses on game days. Going in that window will allow us to make decent box office and we will still be playing when the World Cup is over.

The other factor is that How to Train Your Dragon is a very beloved film; it’s not like we’re trying to launch a new film or franchise; it’s a film people know about. That awareness gives us an opportunity. People are going to need to have something else to do a couple of weeks into the World Cup, and I think we’re going to be that alternative.

Could you tell us about your experience overseeing the international release of 'Avatar'?

One of the highlights of my career was reporting the international numbers on Avatar. It’s probably one of the most satisfying experiences that I’ll ever have in the business.

We were in production for Avatar for four, five years. We knew in 2003 that they were going to make it, and we didn’t release it until late 2009, so it took us six years to get it out after I had first heard about it.

Obviously there were a lot of expectations for it. I imagine it was similar to what the team that worked on Titanic went through: a high-pressure atmosphere where you have this very high negative cost and you’re not so sure how it’s going to do. The tracking wasn’t necessarily where we wanted it to be—people weren’t so sure about seeing these blue people on film—so it was a bit scary leading up to it. We really believed in the film, the organization got behind it, and the opening weekend did around $150 million internationally, a big number but certainly not the biggest—a lot of films have done that or more.

It turned out to be the movie that people who only go to the movies once every ten years go to see. It was exciting to see how that film captured the imagination of the whole world. I had the fortunate job of getting to report the numbers of that film every Sunday, and it felt gratifying for me to know that there were filmmakers and executives out there that couldn’t wait to get an e-mail from me. It felt great being able to deliver the good news since I have to deliver my share of bad news as well.

The 'Ice Age' movies were a huge international hit from Fox. What films on your current slate can do big business internationally?

From a family-film perspective, the first Rio movie was much bigger than our first Ice Age movie. We’ve got the second Rio coming up now, done by Carlos Saldanha, who also directed some of the Ice Age films for us.

What was interesting about the first Rio is that we released it in the middle of a heat wave in Europe during the spring, so we got hurt a little bit by that relative to how it did in Latin America and other markets. I think this is one of those franchises that will grow exponentially in the same way Ice Age did.

We’re also looking forward to Peanuts, which we think has the potential of becoming a big global earner for us.

On the live-action side we have X-Men: Days of Future Past this year and our new Planet of the Apes franchise.

That first Apes film took people by surprise after a disastrous attempt to reboot it earlier. While Rise of the Planet of the Apes wasn’t the biggest film of that summer, it grossed over $300 million internationally and was incredibly well liked. I think the new one coming out can be one of the most talked-about films of the summer. We also have Exodus, Ridley Scott’s version of the Moses story, coming out around Christmas.

INTERVIEW - CinemaCon 2014 Global Achievement Award in Exhibition: Eddy Duquenne - CEO, Kinepolis Group on March 23, 2014

CINEMACON GLOBAL ACHIEVEMENT AWARD IN EXHIBITION

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Eddy Duquenne

CEO, Kinepolis Group

Interview By Phil Contrino

Eddy Duquenne took over as CEO of Belgian exhibitor Kinepolis following a successful spell as CEO of Sunparks. Once installed, Duquenne prioritized a new organizational structure in managing cinemas and promoted direct marketing techniques to better understand consumers.

BoxOffice recently spoke with Duquenne to learn about his strategy in making the most of an exhibition chain in a difficult European market.

What were some of the first things you discovered when you transitioned into the exhibition business?

Coming out of the tourism industry, I was amazed by how everyone was talking in terms of tickets and not in terms of customers. When I [became CEO], we immediately set up sales and marketing departments with a focus on introducing direct-marketing techniques. In Europe we have a population growing grayer, so you have less and less youngsters, and I would ask myself about the long-term evolution of cinema, which is clearly not a growth business when paired with the demographics of a population growing grayer.

What was the strategy behind reaching out to consumers directly?

Could we increase frequency knowing the preferences and the taste of each individual customer? For that reason we started introducing CRM techniques, customer-relationship management, and we started pushing online ticket selling and ticket selling through automatic ticket machines. That way you have a digital moment with your customer so you can start identifying who your customer is.

On average we sell 20 million tickets at Kinepolis; we have about 5.5 million unique customers and we have e-mail addresses for 2.4 million of them. [We track] based on their behavior-what they're buying, when they come to the movies, who they come to the movies with. For instance, a transaction with two adults and two children for Frozen on a Sunday afternoon or an individual ticket for Wolf of Wall Street on Friday night can be the same customer but in different circumstances, so we started looking at why [people] come to the movies-which genres they like, which directors, which cast? And based on that, we have been building algorithms that take those three elements into account and are now trying to push new content.

How did you go about restructuring the company's operations?

We have 23 theaters, of which we operate 22 ourselves, and we came to a new organizational structure where we created budget ownership, and now we have someone responsible for box office, someone responsible for in-theater sales, for experience-meaning the cleaning, infrastructure, projection, sound and security-and someone responsible for business to business. On top of that structure we have the theater manager.

We introduced a new management reporting tool where we only highlight those revenues and costs that each of them can have an impact on. We benchmark between the different budget owners throughout the cinemas and find there's always someone who is doing better. Based on their approach, we try to lower our break-even point from year to year and we incentivize them with a bonus system. We try to lower our break-even point by making profit plans based on 5 percent less tickets but resulting in the same bottom line.

What is the role of NATO and CinemaCon for your business?

The basis of our business is simple: we sell a ticket, a bucket of popcorn, and a Coke. But in general it's a difficult business, because there are a lot of elements and trends in the environment-macroeconomic trends, trends in taste, demographic evolutions, Hollywood focusing on the world market rather than on continents, weather impacts in the short term-and it's not always that obvious to know what exactly is happening and what we should anticipate.

And the comparables are difficult in our industry as well, because the product we have from season to season and year to year is always different. That's why it's good to share with others and to understand how they feel and how they see what's happening.

We see that a strong organization like NATO makes sure all the different aspects and trends in the business are covered very well, so it's a huge source of information. And with CinemaCon you can [connect] with a lot of colleagues from the industry and with more and more representatives coming from Asia, Russia, and South America, so you can speak with them. It's an opportunity to meet with the number one's of the majors as well, and it's Las Vegas, so that's always fun.

NORTH AMERICA: 'Divergent' Posts Healthy $56.0M; 'Muppets Most Wanted' Underwhelms on March 23, 2014

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Sunday Update: Lionsgate's Divergent debuted comfortably in first place this weekend with an estimated $56.0 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 eighth 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 20 percent below the $69.64 million start of 2008's Twilight and 107 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 build-in audience of fans, the film wasn't very front-loaded for a young adult adaptation. The film opened with $22.63 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 $19.75 million and is estimated to decline 31 percent on Sunday to take in $13.63 million. That places the film's estimated opening weekend to Friday ratio at 2.48 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 8.6 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 estimated start of $16.51 million. The latest Muppets film opened below expectations and 43.5 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 is projected to fall 34 percent on Sunday to take in $4.71 million. That places the film's estimated opening weekend to Friday ratio at 3.54 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 fifth place with an estimated $8.56 million. The faith-based drama from Freestyle and Pure Flix averaged an impressive $10,979 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 6 percent below the $9.11 million debut of 2011's Courageous and 25 percent ahead of 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 is estimated to decline 27 percent on Sunday to take in $2.42 million. That places the film's estimated opening weekend to Friday ratio at 3.04 to 1.

Last weekend's top film, Mr. Peabody & Sherman, fell two spots and a significant 46 percent to place in third with an estimated $11.7 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 is set to top the $80 million mark on Sunday and has grossed a respectable $81.00 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 fourth place and sixth place respectively with estimated takes of $8.67 million and $7.78 million. 300: Rise of an Empire was down 55 percent from last weekend, while Need for Speed slid 56 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 $93.75 million in 17 days, while Need for Speed has grossed a lackluster $30.40 million in ten days.

Meanwhile on the limited front, Fox Searchlight's The Grand Budapest Hotel remained impressive with an estimated seventh place take of $6.75 million from just 304 locations. That gave the much buzzed about Wes Anderson directed film a per-location average of $22,204 for the frame. With a 17-day take of $12.96 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.

Saturday Update: Lionsgate reports that Divergent took in $22.8 million on Friday following (and including) its $4.9 million Thursday night haul. BoxOffice projects the film will bring in $54 million for the weekend.

Those figures are solid and put the $80 million production budgeted flick on course for a profitable global run, although pre-release sales and tracking had indicated a more sizable domestic opening closer to the original Twilight (which banked $69.6 million on opening weekend in November 2008).

On the bright side, word of mouth so far appears to be clashing with the critics: the YA adaptation's Rotten Tomatoes score sits at a rough 41 percent as of Saturday morning, but its Flixster audience score is a much stronger 81 percent--including those who haven't seen the film, but are still anticipating it.

This weekend's second wide opener, Muppets Most Wanted, debuted to $4.66 million yesterday. That's a modest start to a run that will inevitably be muted by the current success of Mr. Peabody & Sherman and next month's Rio 2. The film's critical response (77 percent on Rotten Tomatoes) seems to line up with early audience approval (80 percent on Flixster). Enthusiasm and interest dropped from 2011's revival, The Muppets, and the film should still bring in what BoxOffice is projecting to be $17.5 million this weekend.

Freestyle reports that God's Not Dead grossed $2.82 million from 780 locations on Friday. BoxOffice projects an $8 million weekend.

Friday Update #2: Sources tell BoxOffice that Divergent could be looking at around $25 million for Friday based on matinee and early evening business. From there, the adaptation could hit $53-55 million for the weekend.

Muppets Most Wanted is off to a healthy start. Sources tell BoxOffice that the sequel is on pace to bring in $6.5 million today, giving it a shot at $22+ million for the weekend.

Check BoxOffice on Saturday morning for official Friday estimates.

Friday Update #1: Sources report that Divergent earned $4.9 million from early Thursday night shows. That's a fairly healthy start for Lionsgate's latest YA (Young Adult) adaptation, although a bit underwhelming when compared to the original Twilight's $7 million from midnight-only shows (before going on to a $69.6 million opening weekend back in November 2008). The Hunger Games was responsible for $19.7 million from midnight shows in March 2012, although Divergent was not expected to generate that kind of upfront business.

Check back later today for early Friday projections.

Previously from Fandango: LOS ANGELES - March 20, 2014 - According to Fandango, the nation's leading moviegoer destination, the futuristic adventure, "Divergent," is poised to lead all factions, ranking at the top of the Fanticipation movie buzz indicator, scoring a dauntless 92 out of 100 points. Disney's musical comedy caper, "Muppets Most Wanted" is resonating with families and scoring a harmonious 82 out of 100 points.

"'Divergent' is looking like a sizable hit for all audiences, as the majority of our fans are intrigued by the film's unique premise and the action-adventure genre," says Fandango Chief Correspondent Dave Karger. "Thanks to the good will from the last Muppets movie three years ago, ‘Muppets Most Wanted' is showing strong appeal among family moviegoers who love the mix of music, nostalgia, and A-list cameos."

According to an online survey of more than 1,000 "Divergent" ticket-buyers on Fandango:
· 66% plan to go with a group of friends;

· 56% were attracted to the movie's unique concept, 29% to the action, only 15% to the romance;

· 54% have read Veronica Roth's entire "Divergent" trilogy;

· 50% would pick the "Dauntless" faction, 19% Amity, 15% Erudite, 10% Abnegation, 6% Candor.


According to an online survey of more than 1,000 "Muppets Most Wanted" ticket-buyers on Fandango:
· 82% grew up watching "The Muppet Show" on TV;

· 72% are more interested in seeing the film because it's a musical;

· 71% had seen the previous "Muppets" movie with Jason Segel and Amy Adams;

· 62% said the idea of a villainous Kermit lookalike (Constantine) made them more excited to see "Muppets Most Wanted."


On Fandango's movie recommendation show, "Weekend Ticket," Karger breaks down this weekend's new releases and challenges "Divergent" stars Shailene Woodley and Theo James to a "Newly-Friend Game" of knowledge about each other's habits and likes and dislikes. The full episode can be found at http://www.fandango.com/WeekendTicket.

About Fandango's Fanticipation
Known for having its finger on the pulse of moviegoers, Fandango's movie buzz indicator, Fanticipation, provides statistical insight into the movies fans are planning to see in a given weekend. Fanticipation scores (based on a 1 to 100-point scale) are calculated via an algorithm of Fandango's advance ticket sales, website and mobile traffic, and social media engagement. Fanticipation is not intended as a forecast of the weekend box office; it is a snapshot of movie fan sentiment.

How Is 'Noah' Tracking? on March 23, 2014

Long Range Forecast: 'Godzilla' on March 23, 2014

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What would the summer season be without at least one major reboot? Come March 16, Warner Bros. will deliver the first reboot of the season with Godzilla. This week the BoxOffice team takes a closer look at the monster flick's commercial potential. 

Godzilla
(Warner Bros.)

PROS:

- The first theatrical trailer inspired glowing reactions. 
- Co-star Bryan Cranston already features heavily in the marketing material. That's a wise move considering that the actor carries plenty of clout post-Breaking Bad.
- Godzilla is one of the most--if not the most--globally recognizable movie monsters of all time.
- The ensemble cast features key up-and-coming stars such as Aaron Taylor Johnson and Elizabeth Olson. 

CONS:

- It's possible that the bad taste that 1997's Godzilla left still lingers for some moviegoers.
- Opening in between The Amazing Spider-Man 2 and X-Men: Days of Future Past won't be easy. 

Check out our prediction for Godzilla and other films in the table below.

Title Release Date Distributor First Weekend of Wide Release Cumulative
Million Dollar Arm May 16, 2014 Disney
$13,500,000 $46,000,000
Godzilla (2014) May 16, 2014 Warner Bros.
$75,000,000 $235,000,000
Moms' Night Out May 9, 2014 Sony / AFFIRM
$6,000,000 $14,000,000
Chef May 9, 2014 Open Road
$10,000,000 $31,000,000
Neighbors (2014) May 9, 2014 Universal
$34,000,000 $126,000,000
Legends of Oz: Dorothy's Return May 9, 2014 Clarius Entertainment
$4,000,000 $11,000,000
The Amazing Spider-Man 2 May 2, 2014 Sony / Columbia
$112,000,000 $265,000,000
Brick Mansions Apr 25, 2014 Relativity Media
$7,000,000 $16,000,000
The Other Woman (2014) Apr 25, 2014 Fox
$15,000,000 $45,000,000
The Quiet Ones Apr 25, 2014 Lionsgate
$10,000,000 $22,000,000
Transcendence Apr 18, 2014 Warner Bros.
$26,000,000 $76,000,000
Bears Apr 18, 2014 Disneynature
$7,000,000 $21,000,000
A Haunted House 2 Apr 18, 2014 Open Road
$14,000,000 $31,000,000
Heaven is for Real Apr 16, 2014 Sony / TriStar
$8,000,000* $27,000,000
Draft Day Apr 11, 2014 Lionsgate / Summit
$13,000,000 $37,000,000
Oculus Apr 11, 2014 Relativity Media
$12,000,000 $31,000,000
Rio 2
Captain America: The Winter Soldier 
Apr 11, 2014
Apr 4, 2014 
Fox
Disney

$41,000,000
$87,000,000 


$148,000,000
$225,000,000 
Noah Mar 28, 2014 Paramount
$41,000,000 $115,000,000
Sabotage (2014) Mar 28, 2014 Open Road
$7,000,000 $15,000,000
Bad Words Mar 28, 2014 Focus
$6,000,000 $22,000,000

 

*3-day weekend

 

Phil Contrino, Daniel Garris and Shawn Robbins contributed to this report.  

 


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