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Interview with VP European Commission Andrus Ansip and UKCA/UNIC’s Phil Clapp


Celluloid Junkie has partnered with UNIC – the International Union of Cinemas trade body for Europe and beyond – to highlight innovation in the European cinema sector.

 

This interview was first published on Celluloid Junkie

Celluloid Junkie has partnered with UNIC – the International Union of Cinemas trade body for Europe and beyond – to highlight innovation in the European cinema sector. UNIC has just published a report called ‘Innovation and the Big Screen‘.

In the run-up to its print publication at the UNIC conference on innovation at the European Parliament on 8 February 2017, CJ and UNIC will bring you interviews, excerpts and examples of what it is that continues to make cinema the medium that drives innovation in technology, experience, service and much more.

Our third post is a double interview with two of the most influential people in European film, Vice President of the European Commission Andrus Ansip, the current Commissioner for the Digital Single Market and Phil Clapp, Head of the UK Cinema Association and President of UNIC. The two have kindly agreed to share their thoughts on cinema and innovation in Europe.

Celluloid Junkie: Mr Ansip, as VP for the Digital Single Market in the European Commission you are responsible for the promotion of the European film and cinema sector. What is your own very first memory of cinema going?

VP Andrus Ansip: I have a very vivid memory of my first time going to the cinema indeed, one that keeps me going back to it until today. My mother took me to the movies in my home town Tartu. The cinema was called Saluut. It was exciting, the elegant décor, the large room, getting dark, the many people, all sitting silently and deeply immersed in the film: truly the magic of the big screen. The experience was strong, probably the reason why I don’t remember exactly the film, only have some visual memories. Most likely it was an Estonian film at that time, the early 60s.

CJ: Vice President Ansip, you recently stated that 79% of European films are screened in two countries only. Is this a technical, cultural or commercial challenge that can be overcome? What solutions could help?

VP Andrus Ansip: Film markets have historically developed on a national basis and are therefore fragmented. In general, value chains are national with film funds, producers and distributors focusing on domestic audiences. The average box-office market share for non-national European films is 10%.

We first need to acknowledge that not all films are meant to travel. There are cultural reasons why a film might work in one European country but not in another. It is not just a question of language but also of culture and setting. Some stories are universal; others are anchored to a place and a culture.

For the films that can travel, the MEDIA programme has been effective in promoting their distribution through various schemes, ranging from support to sales agents, distributors and cinemas. We also have schemes that support subtitling and dubbing, although here – as always – there is more that can be done. For those films with a potential to travel, it is clear that promotion needs to improve, and that will become more important in the future.

CJ: Mr. Clapp, as President of the International Union of Cinemas, what are your views around this issue?

Phil Clapp: First of all huge thanks to CJ for arranging this interview. Vice President Ansip is currently overseeing wide-ranging EU policy reforms that will undoubtedly have an impact on cinema operators and industry partners more widely. I think it is important that the wider international cinema community is aware of the implications of some of the debates currently taking place in Brussels and able to engage in that dialogue.

In looking at the international appeal of European films, there are of course every year many European co-productions and a number of local films of outstanding quality and audience appeal that do attract international interest and are therefore released theatrically across a significant number of EU countries.

But it remains the case that the majority of the close to 1,700 “European” works produced each year are intended to be local titles made for a specific local audience and as such reflect the culture and language(s) of each specific market.

That said, UNIC’s latest Innovation Report confirms that digitisation has enabled cinema operators across Europe to screen a significantly larger number of films and to offer more diverse experiences to audiences. In Estonia – the home country of Vice President Ansip – the number of films released in cinemas has almost doubled over the past 15 years. However, no cinema – whatever its size, location or technological capacity – will ever be able to screen the myriad of local films on offer from Tallinn to Seville.

We of course recognise that digital platforms can play a role in bringing some of these titles to audiences across Europe. What is however very important to us – and something supported by the overwhelming majority of film industry professionals – is that European policy reform related to cinema does not undermine the key principles on which our sector depends, namely contractual freedom and theatrical exclusivity.

While in the main cinema operators support the Commission’s plans regarding the portability of certain ‘on demand’ film services – including Netflix and iTunes – we are very concerned about its current proposals to apply the ‘Country of Origin’ Principle to the licencing of certain broadcasters’ rights online (the so-called ‘Broadcasting Regulation’). Coupled with EU competition rules, this could limit the exclusivity of certain theatrical releases in the future and thereby strongly influence the value of the cinema-going offer in certain territories. The Commission seems so far unfortunately failed to take these concerns into account to any appreciable extent.

CJ: VP Ansip, you are perhaps Europe’s strongest ambassador for innovation. Where do you feel cinema operators could be more innovative? And how could the Commission possibly help the wider film and cinema sector to increase its innovation capacity?

VP Andrus Ansip: While some might consider cinema operators to be lagging behind when it comes to innovation, I must say that I have seen a lot of innovation and investments in technology in cinema. To mention a few examples: new seats, new sound systems, the digitisation of cinemas.

Where I believe cinema operators could be more innovative is in exploiting the benefits of big data to improve their understanding of audiences, and of which films work for which audiences. Cinema operators, distributors and even producers also need to find new ways to pool their talents and work together. It always strikes me as odd that producers do not necessarily know who their audiences are and that cinema owners, producers and distributors do not exchange information systematically. We need to address this and the Commission will look into ways of facilitating these exchanges.

CJ: Mr. Clapp, how do you see cinema’s position vis-à-vis an increasing choice for consumers to access a huge wealth of content on a multitude of devices?

Phil Clapp: First of all let me say that I’m encouraged by VP Ansip’s statement, which in my view touches on some crucial issues.

Cinema-going has become an ever more immersive experience, catering for the needs of an increasingly demanding and diverse audience. Over the past 10 years, and across UNIC territories alone, the sector has invested around € 1.5 billion in digital technology. Many of the innovations that have changed the theatrical experience in recent times would not have been possible without this transition.

And the Vice President is spot on with regard to the importance of data: better analytics in cinema promises a 10-20 per cent increase in admissions over the coming years. This could be a game-changer that allows the sector to promote its offer in a much more personal and seamless way. A major barrier to unleashing such transformation is for the moment the still relatively low level of mobile ticketing in certain EU Member States – a challenge that the sector, possibly with the help of policy makers, should tackle head on.

As home entertainment offers improve, cinema of course will need to continue to reinvent itself. Massive recent improvements in sound and projection quality, more innovative theatre design and the development of new creative offers – including for example the screening of live concerts and online video game competitions – already help us to out-perform home entertainment as well as many other ‘out of home’ leisure offers. And exciting current investments into Virtual Reality – also featured in our Innovation Report – show that the sector continues to push the boundaries.

European film companies as well as cinema operators face challenges as well as opportunities in this new environment. Taking informed investment decisions with regards to new technology, for example, has become a crucial issue. As importantly, many smaller independent operators lack the resources to make such investments.

Over the past five years UNIC has developed in-depth knowledge about the innovation trajectory of our industry across the World. We would love to work with the Europa Cinemas network as well as with the European Commission and other support partners to develop an ‘innovation roadmap’ for the wider film sector that puts cinemas at the centre of Europe’s growth strategy for film.

CJ: Mr. Clapp, what about younger audiences – do you feel the industry is doing all it can to attract the next generation of cinema goers?

While cinema-going amongst younger Europeans remains strong – particularly in growing Central and Eastern European territories – the more mature markets in Western Europe face the challenge of sometimes plateauing or in fact declining frequency amongst younger customer groups.

UNIC will this year publish the results of a major research project examining youth audience preferences regarding cinema-going across three key territories (UK, Spain and Germany). Research results are currently tested with young consumers in co-creation workshops to further develop and understand innovative ideas and concepts.

For the moment, our impression is that the investment directions in our sector are the right ones when it comes to developing strategies to attract young audiences. Teens are ready to buy a cinema ticket if the experience clearly distinguishes itself from watching a film by yourself at home. We have to amplify the social character of cinema-going before, during and after the screening, invest in the actual film experience and make the customer journey more imaginative and comfortable.

The argument that a film screening – fixed in time and space – is out of step with the expectations of teenagers, which is something we sometimes hear from our partners in government, is a misconception. Teenagers for example love to go to concerts, which are also social events that take place at a certain time. What we arguably have to become better at is to improve digital engagement before and after the event.

I should say a few words concerning piracy in this context. Our colleagues in home entertainment and film distribution have come a long way in the past 5-10 year and established a significant number of legal, affordable and diverse online offers of films. I would argue that there are very few people that today download or stream films illegally due to a lack of access to legal services. In turn, the European Commission and governments across Europe should now step up their efforts to fight piracy. Policy-makers need to ensure that on-going industrial scale copyright infringement is prevented, that all intermediaries contribute to fighting piracy and that EU rules concerning copyright enforcement are implemented more effectively across all Member States.

CJ: Vice President Ansip would you like to comment?

Cinema is a very important medium, one which has developed constantly over the past 100 years. While we have often heard about its future demise, this has never materialised because different generations have discovered the ‘magic’ of cinema.
However, since consumer habits are changing, younger audiences have fallen away somewhat and so cinemas need to find new ways of attracting “digital natives”. We know from studies that there is appetite among younger audiences to go to cinemas because it is a social event; an opportunity to go out with friends. However, there is tough competition from video games as well as from other content channels like online video on-demand providers.

I know that cinemas are already responding and innovating, combining with the online world and other leisure activities. Film education in schools is also valuable for creating an appreciation for European film – and young audiences have never had so much exposure to audio-visual content. That is already a positive development.

CJ: Vice President Ansip, do you expect cinema to survive well into our new century?

VP Andrus Ansip: In terms of the box office, 2015 was the biggest year ever for European cinemas. While this was mainly due to imported US films, it demonstrates that cinema-going is an important social experience for many people, and will remain so. I have no doubt that cinemas and films will continue to thrive. I am sure that technology and content will change in the future – but creative storytelling, which underpins all good films, will remain because this is central to human experience and we are all fascinated by stories. That is not something that will change in the foreseeable future.

CJ: Let’s again touch on innovation – the core topic of this conversation. This question is directed to both of you: which innovation are you personally – as a cinema goer – a fan of? And which innovation or service concept from other sectors would you like to see deployed more often in cinema?

VP Andrus Ansip: I personally love the improvement in image quality, the sound and immersive experience that we have got used to in cinema. I found this particularly for instance in 3D film: it creates a different dimension to storytelling.

Since cinemas are curators of films, I would like to have suggestions of films that cinema operators think would be interesting to me – similar to getting a recommendation from a bookshop. I know most of cinemas’ business is linked to new releases but I would also like to see ‘older’ films similar to catch-up TV.

Phil Clapp: For me, the development of a more personalised ‘offer’ from cinemas, in particular that of more ‘high-end’ boutique cinemas, is a particularly interesting development, both in terms of the extent to which it develops the current business model, but also in the way that it has served to boost public perceptions of the big screen experience.

Outside of the immediate sector, I’m a fan of anything which takes the ‘friction’ out of the customer experience, so for example Amazon’s ‘Prime’ service which allows subscribers free postage on any purchases for a one-off fee and also bundles up its VOD service as an additional benefit.

CJ: We finish with the famous ‘Moonshot question’ – as it, what does it take to shoot a man on the moon? What questions do you think leaders of the film and cinema industry should ask themselves in order to out compete others in 20 years?

VP Andrus Ansip: In a society where people are losing their attention spans while at the same time immerse themselves in new format TV series, are we certain that the 90 minute format for films is the right one? What can we learn from other media such as TV and online platforms? Story-telling and creativity are essential. What do we need to offer to ensure that the best storytellers continue to use the film format?

Phil Clapp: I don’t myself own or operate a cinema so I am perhaps a little hesitant to provide business advice to those who do, and do it well. But I believe that the greatest changes and innovations in cinema are yet to emerge, and will be those which continue to emphasise the social nature of cinema-going at a time when people risk becoming increasingly isolated from each other and the World around them and investment in public infrastructure is under severe pressure.

One vision would see a local cinema become a place not just where people watched films but where – through a connected digital infrastructure – they were also able to enjoy a range of other attractive leisure and educational offers. Many cinemas will argue that they are already well on the way down this road, but I think we may only be at the early stages of what is possible.

CJ: Thank you both for talking to us. 


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