Deluxe Media Inc. provides innovative, secure distribution and localization services for studios, OTT platforms and content creators worldwide. The company’s cloud-based solutions offer both flexibility and reach through customizable solutions that enable customers to create, transform and distribute content and immersive streaming experiences to audiences on a global scale.
George Eyles joined Deluxe in December 2020 as executive vice president and general manager, worldwide cinema. He is responsible for the company’s global cinema (formerly digital cinema) strategy and operations. Here, he looks at COVID-19’s affect on the theatrical business and its future trajectory.
Why and how did COVID-19 affect the theatrical business in the way that it did?
“The closure of cinemas is the most stark and absolute impact of COVID-19 impacting the entire value chain. Beyond that, the market has had to deal with reopening, capacity limitations, and in many markets, further closures before — fingers crossed — reopening. The inability of content owners to reach cinema audiences brought to a head the long-debated and contentious issue of windows, which has been widely and publicly debated!
“Looking a little deeper, there have been many subtle impacts, changes and adaptations. Cinemas had to rethink how they engage with moviegoers, from selling tickets, serving food and beverages, checking tickets and seating them inline with social distancing measures. In the Netherlands, for example, tickets could only be purchased online and in advance of screenings. Some cinemas continued to serve popcorn at the curbside while their doors remained closed. Vendors such as Vista were quick to adapt, launching a reopening kit and enabling contactless engagements with moviegoers through rapid development of their products.
“Within Deluxe, we had to pivot our mastering operations from a facility-based model to a remote model, working with our clients to make the required changes to established security protocols. Back catalog content had significant demand and for the US market alone, we pulled over 7,000 CPLs from archive to support the distribution of over 1,900 titles to cinemas who needed content in the absence of new releases.
“In the UK and Europe, the dynamic changed for our mastering teams with the lack of studio product creating an opportunity for independent distributors and platforms, who continued to release movies into cinemas.”
What is your forecast on the future trajectory of the theatrical business?
“Prior to COVID-19, the cinema industry was breaking records at the box office, and in several markets outside the US, such as the UK, admissions were also growing to new heights. My personal belief is that there will be pent up demand for moviegoers to enjoy the shared experience and fantastic picture and sound only available in cinema. In many key markets, the population has been on some form of lockdown for 12 months, so perhaps there is an opportunity for cinema to re-engage with a new or lost audience? I know I’m unlikely to be saying ‘lets sit on the sofa and watch TV’ anytime soon! This, combined with an exciting slate of movies, will put cinema back on a positive trajectory, irrespective of theatrical window.
“While we lack the supporting data to be able to draw any conclusions, we do know that when cinemas reopened during the pandemic, moviegoers still went to watch movies that had already been available on streaming platforms for several weeks.”
What do recent developments in the streaming TV market mean for theaters?
“If we are talking about the increased number of consumer-facing streaming TV services, this has created a high demand for new original programming and high-quality content. This increased competition will likely raise the bar on content, which can only be a good thing for cinema given the unique environment it offers audiences.
“I don’t believe the streaming platforms present an existential risk to cinema. Apple, Amazon and Netflix have all had successful theatrical releases despite their in-home offerings. In my opinion, as long as cinemas deliver a high-quality picture and sound experience, matched with great stories, increased consumer choice at home does not present a risk to cinema.”
Where do you think the cinema business could still benefit from technological advancement, and why?
“I believe our industry needs to evolve and challenge the way we operate today. A decade after cinema converted to digital projection, we are yet to benefit from the true potential of a digital marketplace. For example, there are many interactions between distributors, vendors (such as Deluxe) and exhibitors that continue to mirror those of analog film. These legacy processes, and at times lack of cooperation, create significant inefficiencies that rely on duplicate data entry, which is high cost and non-value adding.
“While it remains a contentious issue, the theatrical industry would benefit from better understanding its audience for a particular movie to enhance and tailor its marketing in the same way that platforms who engage the consumer can. Netflix knows who and when content is viewed on their platform, but most content owners don’t know who watched their movie in the cinema. The technology is well developed with platforms such as Movio, but there remain disconnects between cinemas and content owners in terms of the sharing and the use of such data.”
George Eyles is the EVP and General Manager, Worldwide Cinema for Deluxe (bydeluxe.com).