After working for the National Association of Theatre Owners (NATO) for about three decades, John Fithian was ready to slow down. He recently retired from a tenure that began in the early ‘90s as an outside counsel for the trade organization, whose members own major theater chains worldwide, including some 35,000 screens in the United States and about 33,000 in 100 other countries. Since 2000, he has served as NATO’s president and CEO.
“It does feel good to pass my golden baton at a time when the business is resurging and coming back,” Fithian says. “So it's good timing and I'm happy.”
In March, NATO named Michael P. O’Leary as its new CEO and president at a time when studios are releasing “the right number and diversity of movies back in the marketplace,” Fithian says.
On a per movie basis, theaters did as well in 2022 as they did in 2019.
“Last year, we had 63% of the wide-released movies that we had compared to 2019, but we did 64% of the box office,” he explains.
Now that he’s retired, Fithian feels that he can speak more freely about the challenges he faced. Over the years, he steered NATO through several crises, with two historical dramas having significant impact in the industry. First was the 2012 mass shooting in a movie theater in Aurora, Colorado. Then, in 2014, the fallout when North Korea hacked Sony Pictures.
Sony was about to release its much anticipated film “The Interview,” featuring a plot to assassinate North Korean leader Kim Jong-un. Before its release, however, a hacker group leaked confidential information about the studio and threatened terrorist attacks at cinemas screening it. Fithian took to NATO’s board — the CEOs of the major theater companies — and insurers, and together they decided it was too risky to have a theatrical release.
“As much as we believe in playing any movie… when the federal government's telling you this is a credible threat from a foreign actor, you pull the movie,” he explains. “So I think the problem was solved.”
But while visiting London, Fithian says he learned that President Barack Obama called out theater owners to stand up for the First Amendment and play the movie.
“That was the very same time when his Department of Homeland Security [was] telling us, ‘This is a serious threat [to] your cinemas. Don't play the movie,’” he recalls. “So it was just so frustrating to be caught publicly in that kind of crossfire.”
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Most recently, Fithian has helmed the organization through the pandemic. While the “death of the cinema experience has been predicted five or six times” during his career, he pushed back on that idea, and navigated it with the assistance of some big Hollywood names, including filmmakers James Cameron and Christopher Nolan and his wife, producer Emma Thomas, who stepped up to help keep theaters alive.
“It was just heartwarming because the creative community has been so supportive of the theatrical experience during my tenure, but particularly during the pandemic,” Fithian asserts. “It was very meaningful coming from those guys.”
Film studios, however, were not always on the same page with theater owners.
Former Disney CEO Bob Chapek decided to debut movies online, giving preference to subscribers, which proved to be unsuccessful.
“Bob Chapek was not our friend,” Fithian affirms. “Sorry, Mr. Chapek, bye bye, because they were losing money while gaining subscribers.”
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A lack of audience and theater closures also forced other studios to make tough decisions.
“We all recognize that windowing strategies and release strategies during the pandemic were unique to the pandemic. But when AT&T forced Warner Bros. to announce an entire year's slate simultaneously, that was a different ballgame,” he states.
And there was divergence even within studios. Fithian says Warner Bros. CEO David Zaslav agreed that “the theatrical model worked financially, and that he knew AT&T was doing the wrong thing.”
“That was obviously music to our ears,” Fithian notes. “The rest of Hollywood now knows that you make more money theatrically if you have an exclusive window. And then when you take your movie exclusively to your own streaming service, it has a much bigger pop.”
Now, everybody's moving in this direction, except for Netflix, whose CEO, Ted Sarandos, Fithian says, doesn’t want to experiment with theatrical releases.
“Ted keeps walking up to the line and then can't quite cross it,” he claims.
And, there’s more reason for optimism.
“The silver lining for the pandemic is that the entire industry got a whole lot of data that proves what we have been saying for years, biased though we are, that a theatrical lease with a robust period of exclusivity is better for the business models, both the theatrical release and the streaming release,” he explains.
“Movie theaters are resilient,” he adds. “Again, we survive.”