MPA’s Charles Rivkin Says U.S. Needs Federal Film Incentives: ‘Production Brings Jobs’

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At CinemaCon, the gathering of theater owners, Charles Rivkin, head of the Motion Picture Association, emphasized the need for escalating federal-level film production incentives in the United States.

This year, along with our unions and associations, we plan to advocate for additional benefits at the national level,” he shared with attendees at Caesars Palace in Las Vegas. “We’ll continue our efforts to prolong tax policies that stimulate studio investments. We’re also looking into new strategies specifically tailored to boost film production and generate employment opportunities within our workforce.

He underscored that incentives lead to production, and production leads to employment. To illustrate, creating a major motion picture typically injects around $1.3 million daily into the local economy, while it also pays out more than $17 million in wages.

He pointed out that incentives are currently achieving success at the state level, and proposed increasing these efforts to boost local manufacturing and strengthen our nation’s competitive position – this would mean more content creators generating more content in various locations, leading to an increase in movies being screened in cinemas nearby. He mentioned Georgia as a case in point, explaining that for every dollar invested in their incentive program, they see a return of over $6 in economic impact; similarly, New Mexico sees about $8, and New York, approximately $9.

He additionally spoke about California, a region where numerous production workers have been unemployed since the actors and writers strikes in 2023, and were later impacted by the L.A. fires. Rivkin mentioned a recent development, as California has declared 51 films eligible for tax credits, which could potentially generate approximately $580 million in economic activity within the state. Rivkin stated, “Currently, from California to New York, we’re collaborating with legislatures to create more production jobs in these communities.

As CinemaCon began, Michael O’Leary, president and CEO of the now-rebranded Cinema United (previously known as the National Association of Theater Owners), urged exhibitors and distributors to unite in order to revolutionize the industry. “We don’t have to fail,” he emphasized, “but we need to change the way we do things. The world isn’t the same as it was yesterday, and if we want to achieve our future possibilities, we must not just adjust, but transform.

A central point up for discussion is the theatrical release window. Prior to the pandemic, theaters had a 90-day monopoly before movies could be available for home viewing. Now, this period has drastically shortened, and O’Leary argues that it should be extended back to 45 days or more. He asserts that in countries with longer windows, box office recovery has been more robust. He explains that shorter windows lead to fewer people going to the theater during a movie’s initial release, which negatively impacts revenue and often hinders the ability of lower-budget films to gain an audience or even be produced. Longer windows, when combined with effective marketing, would slow the current rate of decline in the industry and generate more income overall.

As a movie enthusiast, I’d put it like this:

I found it fascinating when I learned that the earnings for the top 20 films, both before and after the pandemic, saw a 10% dip. However, the box office returns for the next 80 smaller and mid-sized movies took a more significant hit at 32%. To me, if we could manage to cap this decline at just 10%, it could potentially generate an extra $1 billion in annual box office income. That’s why I strongly advocate for extending the release windows as a means to help us reach this target.

He stated that it’s difficult to predict a movie’s box office performance and audience appeal until about 45 days after release. He further explained that an engaging film would generate similar viewership on Premium Video On Demand (PVOD) at the 45-day mark as it would at the 20-day mark. This approach offers additional advantages such as increased marketing impact, publicity, and word-of-mouth from extended theater showings, and extra revenue as well.

He recognized the importance of robust marketing, pointing out that NRG data indicates a decrease in audience awareness for new movies – specifically, a 38% drop in films achieving an awareness level greater than 50% by their opening weekend. He advised against pushing streaming or “watch-at-home” alternatives alongside theater releases, arguing that this could harm box office sales and leave consumers confused.

O’Leary additionally touched upon the topic of investing in cinemas, yet emphasized a word of caution regarding high-end large format brands such as Imax, which only represent 9% of the total box office. He stated, “It’s crucial that expansive screen formats don’t overshadow other cinemas. Each encounter at the local theater should remain a premium experience.” He further added, “If in our eagerness to promote large-screen experiences, we give the impression to moviegoers that the only reason to visit a cinema is for large-screen formats, we are undermining the essence of our industry itself.

O’Leary expressed a positive outlook, stating that the business is poised for “a significant advancement in movie history.” However, the industry’s rebound from the global pandemic has proven tough. As per data from media consultancy Omdia, North America has lost approximately 5,691 screens compared to before COVID-19. Furthermore, box office revenues have yet to reach pre-pandemic figures, and streaming platforms have added new competition to the mix.

O’Leary invited exhibitors and distributors for open discussions, emphasizing a collaborative approach in the spirit of mutual trust and constructive dialogue, with the goal of jointly improving our shared industry.

2025’s box office has had a slow beginning as movies like “Snow White” have not done as well as expected. However, there are exciting titles on the horizon, such as “Mission: Impossible — The Final Reckoning,” “Jurassic World: Rebirth,” and of course, “Avatar: Fire and Ice.” These upcoming films are highly anticipated, so there’s hope for a strong finish to the year.

CinemaUnited, a 77-year-old advocacy group previously known as NATO, recently rebranded itself after the opening of CinemaCon. As O’Leary stated at the time, “CinemaUnited represents who we are in this industry and more importantly, where we’re going.” The organization also aimed for its new name to better match both CinemaCon and its non-profit arm, Cinema Foundation.

This coming week, the leading Hollywood movie studios are set to showcase their forthcoming films at a public event. For the first instance, Amazon MGM Studios will be part of the primary presentations on CinemaCon’s main stage.

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2025-04-01 20:47