Every year the movie theater companies and movie studios come together to go over the upcoming slate of films and figure out how to get more people buying movie tickets, their mutual goal. With global box office up 11% in 2006, the mood was positive. And the big sequels coming out this spring and summer -- Shrek, Pirates, Spiderman, Harry Potter -- are sparking confidence that 2007 will be the biggest box office yet, more than $10 billion -- yes BILLION -- domestic. But there are still plenty of issues plaguing the industry. From the technical (how to make the transition to digital projection) to the everyday (competing with comfortable home theaters), to the international (fighting piracy), to the mundane (getting rid of trans fats in theater snacks). Head of the Motion Picture Association of America's (MPAA) Dan Glickman didn't make any more announcements about reforming the ratings policy, but he did say that the American Medical Association's campaign to get movies with smoking to be rated R is being taken seriously.
The ShoWest Las Vegas convention premiered the preview of Pirates of the Caribbean, which is premiering on ABC this week, on a huge digital projected screen, and boy was it stunning. And a sneak preview of Ratatouille to the theater owners was met by excitement that it has a sophisticated approach that could appeal to the whole family. It's family films like those that could make this summer huge, for one very simple reason, the popcorn factor. Family movies tend to do better, for the practical fact that no group is eliminated. Last year G movies had the largest share of the box office of any of the ratings, 34%. And the theater owners love family friendly movies because kids tend to buy more popcorn (which has ratings of up to 90%) and candy.
And then of course there's the trade show part of ShoWest. Theater owners peruse the huge convention hall, looking for ways to supe up their movie theater seats and fatten up their customers. There was everything from a company selling a special chemical mixture to remove gum from the bottom of theater seats, to every variety of theater-friendly fried food (think churros and taquitos), to the hottest new theater candy (my favorites were the chocolate covered gummy bears and chocolate covered cookie dough) and new flavor powders to spice up popcorn. This certainly isn't the most glamorous part of the movie industry, but it is the nuts and bolts, popcorn and ticket tearing every day business that gets the studios their gross. And it's the part that's most threatened by that huge flat screen TV you have at home.
The movie industry business is having a bit of a rebound after years of downturn and consolidation. Regal Entertainment Group had an up year last year. And this year we already have seen one IPO, a movie theater advertising company spun off from Regal, called National CinMedia. And now two other movie theater companies, AMC (which recently bought Loews Theaters) and CinMark, have both filed to go public within a month. So after some rough years the consolidation, and more positive business environment, is going to make this a hot sector this year. It's still risky -- but in better shape than it was five years ago.
Questions? Comments? MediaMoney@cnbc.com