Kodak sells British visual effects house Cinesite

Cinesite, a leading visual effects company in Britain, has changed hands.

Eastman Kodak, which has owned the company since it was established in 1991, sold Cinesite to Endless LLP, an independent British private equity house with holdings in non-entertainment companies. Financial terms were not disclosed.

Kodak, based in Rochester, N.Y., filed for bankruptcy protection in January and recently reported a loss of $366 million following its decision to stop selling digital cameras and focus on other businesses. The bankruptcy filing, however, does not apply to Kodak's British and other foreign subsidiaries.

Cinesite, one of four major visual effects companies in Britain, has worked on movies such as the "Harry Potter" films and "Pirates of the Caribbean: On Stranger Tides," and on the TV series "Rome." The studio is currently working on the next James Bond movie, "Skyfall,"  and Paramount Pictures' zombie epic starring Brad Pitt, "World War Z."

The new deal will give Cinesite the resources and stability to diversify its services and expand its global position in the media and entertainment industry, the company said in a statement. 

"This sale will give us the opportunity we need to grow our talented team to ensure we remain at the forefront of the visual effects industry for many years,'' said Antony Hunt, managing director of Cinesite.

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Photo: Johnny Depp stars in the film "Pirates of the Caribbean: On Stranger Tides," among the movies for which Cinesite has done visual effects work. Credit: Walt Disney Pictures / Jerry Bruckheimer Films

AMC Entertainment in talks to sell to China's Wanda Group

AMC Entertainment, the United States' second-largest movie theater chain, is negotiating a deal to sell all or part of itself to Wanda Group, owner of China's largest theater company, two people familiar with the talks said.

The deal, if concluded, would make Wanda the first Chinese company to establish a major foothold in the North American theatrical business. AMC operates 5,048 screens in 347 theaters in the U.S. and Canada. It would also give AMC access to China's burgeoning market, which is in the midst of a multiplex building boom and was No. 2 at the international box office last year behind Japan, accounting for $2 billion in ticket sales, according to the Motion Picture Assn. of America.

The talks between AMC and Wanda have intensified in recent weeks in the wake of AMC's move to pull the plug on a planned stock offering to raise up to $450 million and use the proceeds to pay down debt, according to sources who asked not to be identified because the negotiations were confidential. Top shareholders in AMC include JPMorgan, Apollo Investment Fund and Bain Capital Investors.

AMC withdrew the offer because of concerns that market conditions weren't ripe for a stock offering, and possibly to position the company for a sale, people close to the transaction said.

A spokesman for AMC declined to comment, as did a representative for Wanda. News of the talks with Wanda was first reported by the New York Times.

Wanda Cinema Line Corp. Limited is the largest cinema chain in China. The parent company, Wanda Group, is a major player in real estate development including department stores and hotels.

The company has been in the news of late because its chairman, Wang Jianlin, is reportedly under investigation for ties to disgraced Chongqing party chief Bo Xilai. Bo was sacked, accused of corruption, and his wife charged with the murder of a British businessman. Wanda's headquarters are in the northeastern city of Dalian, where Bo was once a senior official.

AMC posted a loss of $82.7 million on revenue of $1.93 billion in the 39 weeks ended Dec. 29, 2011, compared to a profit of $36.88 million on revenue of $1.9 billion during the same period in 2010, according a filing with the Securities and Exchange Commission. The company cited higher interest expenses, investment losses in Beverly Hills-based 3-D technology company RealD and costs related to its acquisition of Kerasotes.

In May 2011, AMC closed a deal to acquire 92 theaters and 928 screens from Chicago-based Kerasotes Showplace Theatres, the nation's sixth-largest movie chain.

China has been heavily expanding its own entertainment industry, both to boost the country's global influence or "soft power" and to feed the demands of a surging middle class. Several Hollywood studios have been maneuvering to take advantage of the opportunity to grow business in China.

Burbank-based Walt Disney Co. recently said it would partner with the animation arm of China's Ministry of Culture and China's largest Internet company to help develop China's animation industry. Glendale-based DreamWorks Animation has announced a joint venture with Shanghai Media Group, China's second-largest media company, to build a family entertainment company to produce animated and live action movies and TV shows for the Chinese market. That deal was unveiled in February when Chinese Vice President Xi Jinping visited Los Angeles.

China is also rapidly expanding its theater industry. Although no major U.S. theater chain has expanded into China, Beverly Hills-based Real Inc. also has partnered with Beijing SAGA Luxury Cinema Management Co. to equip the Chinese theater chain with 3-D technology. Imax Corp., the Canadian big-screen theater company, also formed a joint venture with Wanda  to open 75 theaters by 2014.

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Photo: An AMC theater in Burbank. Credit: Ringo H.W. Chiu / For The Times

AMC Entertainment shelves IPO plan

AMC Entertainment, the nation's second-largest exhibitor, has once again scrapped plans for a stock offering, two people familiar with the matter said.

The Kansas City, Mo.-based theater chain had said in a regulatory filing last spring that it planned to raise up to $450 million in an initial public offering of stock, using the proceeds to pay down debt. Top shareholders in AMC include JPMorgan, Apollo Investment Fund and Bain Capital Investors.

But at the prompting of AMC's owners, the circuit has opted to shelve the IPO, out of concern that market conditions aren't ripe for a stock offering, said two sources familiar with the plans who asked not to be identified because they were not authorized to discuss the matter.

"It's a tough business,'' said one of the sources, citing the long-term challenges faced by the exhibition industry, especially from the threat posed by shrinking theatrical windows -- the period between when a movie is released in theaters and when it can be viewed in the home. "The biggest issue they are facing is how to navigate the collapsing of theatrical windows."

Industry-wide, the number of tickets sold in the U.S. and Canada fell 4% last year to 1.28 billion, the lowest level since the mid-1990s. But revenue has rebounded this year, jumping 23% in the first quarter.

This marks the third time in five years that AMC has pulled back from going public. The company originally filed for a $750-million IPO in December 2006 as private equity firms looked to recoup some of their heavy investments in the theater operator. But AMC withdrew that offering in May 2007 after investors balked at the $17-a-share asking price.  AMC then unveiled plans for a scaled-back stock offering in September 2007 but withdrew that plan a year later amid market volatility.

Along with rival Regal Entertainment, AMC last year launched a joint venture called Open Road Films that will acquire and release independent movies.

AMC has been bulking up on the number of cinemas it controls. In May 2011, AMC acquired 92 theaters and 928 screens from Chicago-based Kerasotes Showplace Theatres, the nation's sixth-largest movie chain. AMC operates 347 theaters and 5,048 screens in the U.S. and Canada.

Ryan Noonan, a spokesman for AMC, declined to confirm or deny whether the circuit had officially abandoned its IPO plans but said: "The IPO process is ongoing and I do not have a time line to share."

AMC posted a loss of $82.7 million on revenue of $1.93 billion in the 39 weeks ended Dec. 29, 2011, compared to profit of $36.88 million on revenues of $1.9 billion during the same period in 2010, according a filing with the Securities and Exchange Commission. The company cited higher interest expenses, investment losses in Beverly Hills-based 3-D technology company RealD and costs related to its acquisition of Kerasotes.

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Photo: Moviegoers gather at an AMC theater in Burbank on a Friday night. Photo credit: Ringo H.W. Chiu / For the Los Angeles Times.  

 

 

CinemaCon panel lights up texting debate

It was the closest thing yet to a skirmish at CinemaCon.

The venue: the Palace Ballroom at Caesar's Palace in Las Vegas.

The subject: whether to allow texting in movie theaters.

Regal Entertainment Chief Executive Amy Miles, one of several panelists debating the ways theaters can lure "today's savvy moviegoer," suggested that exhibitors consider allowing younger patrons to use their cellphones with certain types of movies such as "21 Jump Street." 

That triggered a furious response from Tim League, chief executive of Alamo Drafthouse, the maverick Austin, Texas-based chain that is known as much for serving food and drinks in its theaters as it is for strictly enforcing a ban on talking and using cellphones in its auditoriums.

"Over my dead body will I be introducing texting into movie theaters.... That's a scourge of the industry,'' League said. "It's our job to understand that this is a sacred place."

Jeff Blake, vice chairman of Sony Pictures Entertainment, came to Miles' defense. "You don't mind giving them a beer for Christ's sake,'' he said.

Whether texting is allowed in theaters, mobile devices already are rapidly changing the exhibition industry, as the Los Angeles Times recently reported. There are dozens of phone apps that help consumers get to the movie theater, share their movie plans with friends and family on Facebook and receive special offers on concessions.

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Photo: Tim League, Alamo Drafthouse founder and chief executive, outside of an Alamo Drafthouse in Austin, Texas. Credit: Annie Ray

MPAA's Dodd urges industry to reach out to 'connected consumers'

LAS VEGAS -- Motion Picture Assn. of America of Chief Executive Chris Dodd touted a strong rebound at the box office this year but said the industry needs to find new ways to stay relevant to younger, "connected consumers."

"We need to make the case -- both to the new, younger, 'connected consumers,' and to others who wonder if the moviegoing experience remains something special, something to be savored and enjoyed, something so innovative and creative that it cannot be duplicated at home no matter how many boxes they have,'' Dodd said in a speech at the CinemaCon trade show here.

Dodd, the former senator from Connecticut, noted that worldwide box office revenues reached a record $32.6 billion last year and that domestic box office revenues are up 17% this year compared with the same period last year.

Still, Dodd noted that the industry faced long-term challenges, including boosting theatrical attendance in the U.S. and Canada, which fell 4% last year.

"One third of the public in the U.S. and Canada no longer goes to the movies," Dodd said. "We need to bring them back. I firmly believe that with our artistic and commercial vision and your stewardship of the great moviegoing tradition, we can do it."

Dodd also renewed his call for finding common ground with the technology industry to curb the theft of intellectual property. The MPAA backed tough laws, nicknamed SOPA and PIPA, to crack down on online piracy, but the bills were defeated by opposition from Google and other tech giants along with a strong public backlash.

"I want to dispense with the conventional wisdom that in order to protect our content we must be at war with the technology industry,'' Dodd said. "In fact, our two industries, content and technology, have far more in common than some have argued."

He added, "If protecting intellectual property results in an uninformed brawl between Hollywood and Silicon Valley, both sides will suffer -- but more importantly, so will millions of Americans who rely on these intellectual property industries for their jobs, and on the consumers whose lives have been enriched by their efforts. 

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Photo: MPAA Chief Executive Chris Dodd. Credit: Chip Somodevilla / Getty Images

Cinedigm to acquire entertainment distributor New Video

In a bid to establish itself as full-service entertainment studio, Cinedigm Digital Cinema Corp. said it has agreed to acquire New Video Group, a New York-based distributor of independent films, TV shows and specialty entertainment.

Cinedigm, which supplies software to convert films into a digital cinema format and programs concerts and alternative content for movie theaters, said Thursday night that it had agreed to buy New Video for $14 million. The cash and stock transaction is expected to close Friday.

"Cinedigm is now a fully integrated distributor of independent films and specialty content,'' Cinedigm Chief Executive Chris McGurk said in a statement. "Over the past year, we have analyzed many companies in the digital distribution space for home and mobile entertainment and determined that New Video is the best partner for us."

Cinedigm is based in Morristown, N.J.

New Video was founded in 1991 to acquire and distribute alternative and independent movies. The company has acquired licenses for more than 4,000 films and 6,000 television episodes.

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Photo: Chris McGurk is CEO of Cinedigm Digital Cinema Corp. Credit: Jay L. Clendenin / Los Angeles Times

International movie ticket sales reach new peak in 2011

Even as domestic ticket sales stalled last year, the international movie business climbed to new heights.  A newly released report from the Motion Picture Assn. of America states that global box office receipts for all films released around the world in 2011 reached $32.6 billion, up 3% over 2010 and 35% higher than five years ago.

The rise in global ticket sales reflects the rapid growth in overseas markets, particularly in China, where the box office grew by a whopping 35% to $2 billion in 2011 alone, according to the MPAA. China has been experiencing a multiplex building boom as Hollywood studios and production companies sign deals to expand their presence in the world's most populous country, which recently took steps to ease its annual quota on the number of foreign movies it allows into the country.

"These numbers underscore the impact of movies on the global economy and the vitality of the film-watching experience around the world,'' Chris Dodd, chairman and CEO of the MPAA, said in a statement. "The bottom line is clear: people in all countries still go to the movies and a trip to the local cinema remains one of the most affordable entertainment options for consumers."

Ticket sales in the U.S. and Canada dropped 4% to $10.2 billion, compared to 2010, partly reflecting a $400-million decline in revenue from 3-D ticket sales and a crop of under-performing movies in the first quarter of 2011.

The MPAA noted that domestic ticket sales were still up 6% over five years ago. But theater admissions -- or the number of tickets sold -- dropped 4% in 2011 from the previous year, to 1.28 billion.  And that's an 18% drop since 2002, when 1.57 billion tickets were sold, according to the report.

Domestic movie ticket sales continue to be fueled by repeated visits by frequent moviegoers -- those who go to the movies once a month or more. Frequent moviegoers represent only 10% of the population but purchased half of all tickets sold in 2011.

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Photo: Imax Corp. executives in Beijing announce a  deal with Wanda Cinemas to open at least 100 theaters in China. Credit: Stefen Chow/Bloomberg

 

Kia Motors USA to premiere Super Bowl ad in theaters

The Super Bowl has become television's biggest stage. Within days, Kia Motors USA will begin touting its Super Bowl commercial on big screens.

To kick off its football championship advertising campaign, Kia Motors will release a teaser trailer for its upcoming Super Bowl commercial in 18,000 movie theaters, beginning Jan. 27.  Then, four days before the big Feb. 5 game, the car company will introduce the full-length 60-second commercial, called "Drive the Dream," on the same 18,000 screens.

It is believed to be the first time a Super Bowl commercial will premiere in movie theaters. 

The move by Kia is part of a growing trend by marketers to give sneak peaks or unveil their entire ads before the Super Bowl to get a jump on competitors and gain traction in the increasingly important social media platforms. 

"We are trying to continue to push the envelope,” Michael Sprague, vice president of marketing for Kia Motors America, said. “Consumers at the movies will start tweeting about the ad, and that should help us build momentum and awareness.”

Kia's Optima sedan ad -- created by the car company's longtime agency, David & Goliath of El Segundo -- features super model Adriana Lima, MMA fighter Chuck Liddell and the rock band Motley Crue.  The concept for the commercial came during research sessions in which a consumer on a panel said the Optima was his dream car, said David Angelo, chief executive of David & Goliath.

Kia doesn’t think the early release will spoil the freshness of the ad, which will make its television debut during the Feb. 5 championship game broadcast by NBC. 

“Every year, the Super Bowl audience grows. And if we can tap 5 to 10 million people who see it early, there will still be 100 million people who haven’t seen it when it breaks during the Super Bowl,” Sprague said. “We are simply trying to create the buzz and get people talking.”

The Kia ad will be distributed in theaters by National CineMedia, which describes itself as the largest in-theater network in North America.  The company -- a joint venture between AMC, Regal and Cinemark -- also programs sporting events and concerts.

The Super Bowl ad stakes are increasingly high. This year, companies are paying NBC an average of $3.5 million for a 30-second spot, and more than $6 million for a 60-second spot.  

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Photo: Kia Motors USA advertisement in the 2012 Super Bowl features fashion model Adriana Lima, fighter Chuck Liddell and Motley Crue. Credit:  Kia Motors USA

 

Digital projectors poised to take over world's theaters by late 2015

Old-fashioned film projectors could be relics by the end of 2015. Texas Instruments Inc., which makes the DLP Cinema computer chips used in digital projectors, predicted Wednesday that the world's theater industry would be entirely digital in the next four years.

The Dallas company said that the number of its DLP digital projectors installed around the globe had reached 51,620 screens, an 84% increase over the last 12 months. Much of the growth has been in China and Europe.

Currently, more than half of the world's 125,000-plus screens and 62% of U.S. screens have been converted digitally as studios move rapidly to phase out costly film prints. The transition also has been accelerated by the popularity of 3-D blockbusters like "Avatar," which, in most cases, require digital projectors in order to be played in cinemas.

"When we started in 2005, we really thought it was going to take 10 or 15 years for digital cinema to be fully adopted, but in a matter of a few years we've gone past a tipping point," said Jack Kline, president of Christie Digital Sytems USA Inc. in Cypress, which licenses technology from Texas Instruments and has shipped and installed more than 26,000 digital cinema projectors to date. "It's astounded us at how quickly it was adopted."

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On Location: L.A. movie palaces still matter to film industry

The opulent picture palaces and vaudeville halls of Downtown Los Angeles may be monuments to a bygone era, but they are still keeping their ties to Hollywood.

Theaters in the historic Broadway District, including The Orpheum, the Palace Theatre and the Los Angeles Theatre, are featured in several current and upcoming movies, including Walt Disney Pictures’ “The Muppets,” Warner Bros.’ “J. Edgar” and “The Dark Knight Rises,” and the Weinstein Company’s “The Artist,” the silent, black-and-white period romance that opens in the U.S. this week.

The elegant structures are popular among location managers and set designers because of their rich and varied architecture, which ranges from Art Deco to French Baroque and Spanish Gothic -- sometimes all in the same venue.

“These downtown L.A. theaters constitute a local treasure trove of historic and exotic show palace interiors and exteriors,” said Harry Medved, co-author of the book "Location Filming in Los Angeles." “They can double as live theaters, nightclubs, casinos, hotel lobbies or music halls in London, New York, Detroit and Paris.”

Another selling point: because they are no longer used for showing first-run movies, the buildings are readily available for dressing up as movie sets.

“They are an incredibly valuable resource for filming in Los Angeles," said John Panzarella, location manager for “In Time,” the recently released sci-fi thriller starring Justin Timberlake and Amanda Seyfried. Panzarella booked the grand lobby of the Los Angeles Theatre to depict a futuristic casino.

“In Time” is among more than a dozen movies that have filmed at the Broadway District landmark, which was designed by architect Charles Lee and opened in 1931 for the gala screening of Charlie Chaplin’s “City Lights.” The building, now listed with the National Registry of Historic Places, was the last and most extravagant of the downtown movie palaces built between 1910 and 1931. Together they formed the core of the city’s entertainment district, which also hosted live performances by artists from Judy Garland to Duke Ellington.

Later, they hosted puppets. Producers of “The Muppets” also shot a scene in the same lobby, where Kermit the Frog makes his final speech on the grand staircase.

Most of the original 19 theaters have long since closed. A handful -- including the Orpheum, the Million Dollar Theater and the Palace -- remain open for special events, screenings and concerts. (Loew’s State Theatre, at 7th and Broadway, is a church.) Several rent their auditoriums, lobbies and ballrooms to film crews, which may be the reason they’re still around.

“Their use as film locations is one of the main reasons they are still here and intact," said Hillsman Wright, co-founder of the Los Angeles Historic Theatre Foundation, which has been working to preserve the storied real estate. “They are very powerful buildings that were designed to take you away from the troubled world, particularly during the Depression era. They were built to inspire, and they still have that quality.”

Richard Middleton, executive producer of “The Artist,” said the old movie houses are an asset to a city that has suffered from runaway production.