NATO President Michael O’Leary Stresses Need for Exhibitors to Promote ‘Small and Mid-Budget Movies’

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The movie theaters’ top lobbyist will present at CinemaCon in Las Vegas this week

National Association of Theater Owners President Michael O'Leary
National Association of Theater Owners President Michael O'Leary (Valerie Macon/AFP/Getty)

This week, movie theater owners will gather in Las Vegas for the annual trade show CinemaCon after a year that saw their industry enjoy the spectacular highs of Barbenheimer and the stormy weather brought by Hollywood’s double strike.

It was also a year in which Michael O’Leary made his debut as the new president of the National Association of Theater Owners, becoming the top advocate for an industry that has dealt with years of uncertainty.

“The past year has involved a lot more listening than talking,” O’Leary told TheWrap ahead of the event. “Because of my background, I had an understanding of the industry and how it works. But I thought it was important to get out there and really try to understand what motivates the exhibition folks, what it is they worry about, what it is they’re excited about.”

While a newcomer to exhibition, O’Leary joined NATO in March 2023 with a long resume of work in entertainment lobbying, holding top policy and government affairs positions at the Entertainment Software Association, 20th Century Fox, and most notably, the Motion Picture Association, where he oversaw the creation of that organization’s global policy team as it expanded its international ventures.

Now, O’Leary will be leading NATO as theaters face a future of promise and uncertainty. Exhibitors are expecting more films back on their screens now that the streaming experiments and production delays of COVID are behind them. But the threat of studio consolidation now replaces the threat of writers and actors’ strikes as the next big potential twist that could derail theaters’ attempts to get back to where they were before the pandemic.

O’Leary discussed the road ahead for NATO in the interview below, which has been edited for length and clarity.

How much did the strikes set back the recovery timeline for movie theaters?

It’s hard to say specifically. It definitely slowed down what we thought was shaping up to be a very positive 2023 and set us off on the back foot to start 2024, but the effects won’t be long-term.

Of course stopping production for six months is going to leave an impact. But the fundamentals of our industry are still very sound in the sense that 2023 showed that there’s great consumer demand, great enthusiasm for getting back to the theater and for seeing movies on the big screen. My conversations with our friends in the production space, they’ve all been positive, and they’re trying to ramp back up and get production numbers up to where they should be. It’s a bit of tapping on the brakes on getting to where we want to be, but we’re excited about the films that are coming in 2025.

The mantra from exhibition since theaters reopened has been, “We need more movies.” But is there any particular sector of the film ecosystem that you think theaters need to see more of to get business to back to where it needs to be?

I would answer that in two ways. One is that it’s not just putting movies in theaters, it’s movies in theaters that have a clear period of theatrical exclusivity and are supported by marketing. The second part of it, which I think more directly answers your question and is one of the things I’m going to talk about at CinemaCon, is the need to make sure that we have a variety of films to meet the movie going public where they are and are the types of things that they want to see.

With that in mind, a big task for us as exhibitors to tackle is what we can do to help promote those small and mid-budget movies. How can we help our friends in distribution to promote them, get people aware that they can see them on the big screen and actually want to see them there? It’s not really a specific genre we need to see more of, it’s just that we need to get the word out to people that the wide range of movies that they want to see in theaters are out there.

There’s been a big rise in per patron spending at theaters since they reopened, but IndieWire posted a HarrisX poll showing that just 34% of adults surveyed said they prefer to see a film in theaters as opposed to waiting for streaming. Are you concerned that COVID has diminished the pool of regular moviegoers?

I don’t think that there’s a concern about it. In the context of the pandemic, everybody’s talking about that being this big thing; but the truth is, that’s been the nature of our business for decades. There’s always been a challenge to get new people into theaters. Exhibitors have constantly had to put the work in to reach out to new audiences, whether its younger generations or otherwise, and what we’re doing after COVID is not that much different.

My background is in the political world, where there hasn’t been a reliable public survey in about a decade, so I don’t put a whole lot of stock in snapshots and sample sizes that are just taken in a moment in time. But regardless of what a specific survey may or may not say, we have to constantly be trying to expand the number of people that want to go to the theater.

Now the good news is, we’ve become very proficient at creating the types of experiences that consumers want, and we are confident that as we continue to do that, more and more people will come back. That was one of the things that was frustrating about the timing of the labor impasse…it came right on the heels of Barbenheimer. Everybody was excited about it, but we couldn’t capitalize on the momentum the way that we should have.

Speaking of younger generations, we saw a period last year when the box office was driven heavily by Gen Z with “Taylor Swift: The Eras Tour” and “Five Nights at Freddy’s” in October. What sort of conversations have you had with studios about maintaining the momentum and making films that appeal to that demo?

What’s important to remember is that we do ourselves a disservice when we just pigeonhole people or groups of people in a certain way, think that they will only react in a certain way, and assume they can only have one type of experience.

There were a lot of people, a lot of younger people that I know, that went, for example, to “Oppenheimer” that wouldn’t necessarily be the type of people you would expect to go see that movie. Not only did they go see it, some saw it multiple times and they talked to their friends about it. Part of what we have to do is we have to recognize the way people in different times in their life process information and make sure we’re speaking to them in the most effective way. But at the same time, we have to trust the moviegoing public. If we put compelling products in there, I think that it cuts across demographics, and all kinds of people will come.

While there’s been all this positive news about studios pivoting back to theaters, there’s also been reports about Paramount being up for sale. With consolidation becoming such a hot-button issue in Hollywood, what conversations have you had with NATO members and production partners about the threat M&A poses to that key goal of getting the volume of films back up to pre-COVID levels?

I have avoided talking about hypotheticals up to this point, and I’m aware of all of the things that you’re talking about. But, you know, the way I look at is a much more macro approach. Our first priority is activity in the marketplace, which will increase movie production. We think that that is the key to success, not just for the exhibition industry, but also for the distribution industry, and ultimately, for the creative industry. We view everything through that lens, rather than speculate on what may or may not happen.

We’re at a critical juncture in time right now, where the moviegoing public wants more movies, and we have to answer that demand. So I don’t speculate on what might happen to a given entity or who might buy who or how they might merge, it’s just not something that I’m going to do. But we will be looking at anything that might happen…because this ultimately results in there being more movies made for consumers.

Now, having said all of that, we are living in a time where there’s a kind of sorting out going on across the industry, where all different parts of the industry are trying to figure out what is the best path for the site, what is the best path forward. We’re going to live in a period of time for the next number of years, until that resolves itself, where there’s going to be speculation about what might happen, what might not happen. So my perspective will be to take those things as they come when they become real. But I don’t really engage in speculating about what might happen, or what the impact of something that may or may not happen might be.

Comments

2 responses to “NATO President Michael O’Leary Stresses Need for Exhibitors to Promote ‘Small and Mid-Budget Movies’”

  1. Gary Meyer Avatar

    This interview feels heavily truncated, just ending suddenly. Coming from the exhibition world and having been on several webinars with Michael O’Leary I know her has a lot more to say. The issues covered are nothing new yet O’Leary is out there aggressively meeting with exhibitors and distributors trying to wake up the industry to ideas that will move us forward and keep bringing audiences to theaters.

    The need for a variety of types of films in theaters is nothing new and is a reality. The problem is that they come and go before anybody even knows about them. Yesterday on a cross-country flight I watched three movies being offered, only one of which I had (barely) heard of but only because it starred Oscar nominee Lily Gladstone. They were all excellent works with appeal to a range of audiences but who knew about them before they got lost in the streaming maze? The days of print media guiding audience to (and away from) movies are largely gone and the Internet is out of control.

    I hope that an expanded interview comes soon with a discussion about new takes on good old-fashioned showmanship from theaters, distributors and filmmakers?

    That is what largely drove the success of BARBIE and OPPENHEIMER, two films with very uncertain futures six months before release.

  2. Gary Meyer Avatar

    Updated and corrected comment:
    This interview feels heavily truncated, just ending suddenly. Coming from the exhibition world and having been on several webinars with Michael O’Leary I know he has a lot more to say. The issues covered are nothing new yet O’Leary is  out there aggressively meeting with exhibitors and distributors trying to wake up the industry to ideas that will move us forward and keep bringing audiences to theaters.

    The need for a variety of types of films in theaters is nothing new and is a reality right now if you can find them. The problem is that they come and go before anybody even knows about they exist. 
    Yesterday on a cross-country flight I watched three movies being offered, only one of which I had (barely) heard of and only because it starred Oscar nominee Lily Gladstone. They were all excellent works with appeal to a range of audiences but who knew about them before they got lost in the streaming maze? The days of print media guiding audiences to (and away from) movies are largely gone and the Internet is out of control.

    I hope that an expanded interview comes soon with a discussion about new takes on good old-fashioned showmanship from theaters, distributors and filmmakers?

    That is what largely drove the success of BARBIE and OPPENHEIMER, two films with very uncertain futures six months before release.

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