The Future of the Movies, Part 3: Fathom Events CEO Ray Nutt

This series presents a different essay by a different writer on the first Friday of the month. Each one starts from the premise "The Future of the Movies." The writer is free to expound on that title in whatever way they choose. It could be streaming, theatrical, AI, tech, representation, or anything else that comes to mind. And we expect the conversation to change month to month. We just want to make sure we're having it. Come back every month for upcoming essays by Robert Daniels, Brian Tallerico, Clint Worthington, Isaac Feldberg, and many more.

Most theatrical movie releases have several showings a day over a period of weeks on their way to a second life on streaming services, perhaps ending up on commercial broadcast television. But distributor Fathom Events takes another approach. The people who buy those tickets don’t have to decide between going this week or next week or waiting a couple of months to see the film at home. If they want to see it, they have to get a ticket for that one-time showing, truly a special event. They have been very successful with specialty movies with Christian themes, with anniversary showings of beloved films people have seem many times at home but not on a big screen, and more. In an interview, Fathom Events CEO Ray Nutt talked about his experiences growing watching movies in a small town-theater and how Fathom tries to create a magical experience for movie-goers.

What are some of your earliest memories of seeing movies in a theater?

Many moons ago, I grew up in a very rural community about an hour south of Chicago, a little town called Wilmington, Illinois. It's between Joliet and Kankakee. There was a little theater, a little single-screen theater called the Mar Theater.  As kids, that used to be the place to go on Friday night. On Saturday night was date night, so if you had a date you’d take her to the Mar Theater. 

One of the first movies that I ever saw there actually turned out to be my favorite movie, “One Flew Over the Cuckoo's Nest.”

Those were much, much different times. The movie ticket was a lot cheaper and the concessions were a little bit less expensive. The theater manager knew everybody in the community. He would either be in the box office or behind the concession stand or out greeting everybody that came to the movie theater. So it was a very special time.  

Fathom has had a lot of success bringing audiences into a theater to see classics like “The Wizard of Oz.” Why do you think people want to go see a movie in the theater that they've seen at home many, many times?

I think that number one, people want to have that communal experience. We're seeing a lot of folks returning for a classic movie series with their grandkids and seeing it on the 40-foot screen. The amenities that theater exhibitors out there have put together are amazing now. 

The concessions, the enhanced sound systems, 3D, IMAX, many of these movies have different premium experiences. There is something for everyone. 

We're in the middle of a series called “The Chosen” right now, which is actually a television series. We are seeing people who can watch that at home and will be able to on a free app. 

But they want to go to the movie theater and sit shoulder-to-shoulder and laugh and cry and celebrate and do all the things that they do together. We've seen a lot of that since the pandemic, by the way, after people were cooped up for 12 to 18 months.

How did you get into this business?

I've been in the entertainment business for probably 40 years now. I started in the cable television business that was owned by TCI back in the day in Denver. TCI also had an interest in United Artists Theaters, and I've always been very interested in the entertainment aspects of it. I was on the theater exhibition side of the business with United Artists Theaters and Regal Entertainment Group for years and years and years. About seven years ago I decided that I wanted to do something that made a little bit more difference in the way that people consume content and so I moved over here to the distribution side of the business.  It's very meaningful both professionally and personally to me that we're showing content that does make a difference in people's lives whether it's faith-based content, anime content, classroom content, classic movies, whatever it is or whatever it might be. The comments that we get from our audiences are just remarkable with regard to life-changing things that they see in a movie theater. 

So this has been very, very gratifying to me. One of the things I'm very proud of is that we go out and do things like “The Chosen” and other types of content that we show in theaters that nobody's ever done before. Nobody's ever shown eight episodes of a total series, which we're doing with “The Chosen,” as an example. We started way back, showing live content in theater with the Metropolitan Opera and we're still doing that today.

We encourage everybody here to come up with new and fresh ideas, and as long as there's an audience out there for it, we'll take a shot at it.

How do you decide the best way to show theater audiences an 8-hour series?

We started February 2nd showing “The Chosen” for two weeks, episodes 1 through 3 for two weeks. Then we showed 4 through 6 for two weeks. We scheduled the last two episodes for a week with an option to extend it if there is demand. We found that if you go see 1 through 3, you’re likely to come back for the rest.

The research predicted that about 70 percent who came for the first episodes would come back and it turned out to be spot on. We started with them coming out of the pandemic doing a Christmas program called “The Messengers” that was the story of the birth of Jesus, with a lot of faith-based musical artists. That did very well for us. We did another Christmas special with them. We did Season 3, Episodes 1 and 2 and 7 and 8, sort of book-ended things. Then we said, “You know what? Let's do all episodes for Season 4.” It's worked out very, very well for us. I think we're probably going to end somewhere around $70 million on that.

What is your most effective marketing strategy?

What I always tell people here: “You need to understand what our content partners’ objectives are. We have people that come to us that don't care about making money; they got more money than they know what to do with. It's cause related or something.

We have people on the other end that have a message that they really want to get out there but of course, they want to monetize their content. So it's understanding the content provider and then once we're on board, both the content provider and us and exhibition, then what we do is we put together a marketing plan for that and we know how to find audiences.

Some people look at us like we have three heads with some of the stuff that we've been doing, but we've done the research and we know there's an audience for whatever the content is out there. So the marketing is a three-legged stool as I like to call it. It's us, it's exhibition,  and we bank heavily on our content providers as well and we do that because there's a big business model that's very different than the business model that you'll typically see in the distribution area.

So what we do is a box office revenue share. It really helps with the marketing because there's a split at the box office between us, exhibition, and the content provider. It keeps everybody on an even playing field as far as being motivated to contribute to the marketing.

I like to say that we know our audiences, but our content providers really know their audiences as well. We do rely a lot on social media from here, but we're owned by AMC, Regal, and Cinemark, and we have pre-approved rights to trailering, movie posters, other theater assets, office handouts, things like that, in the movie theater. 

Our research tells us, though, that the big thing that really drives audiences are the movie trailers. And by the way, we're the ninth largest distributor in North America right now behind you the big guys, Disney, Universal, and everybody.

What are you most excited about that's coming our way?

I'm very excited about our classic movie series this year.

We've got a very diverse content, very diverse lineup of content. We’ve already showed the 85^th anniversary of “The Wizard of Oz” and the 60^th anniversary of “My Fair Lady.” Now we have the 35^th anniversary of “Steel Magnolias” and the 85^th anniversary of “Gone With the Wind” and the 85^th anniversary of “White Christmas.” “Blazing Saddles,” too, the 50^th anniversary.” 

In the faith area, we've got a picture coming out called “Someone Like You,” based on Karen Kingsbury’s best-selling novel. 

We always do a Ghibli fest. We're continuing the Metropolitan Opera. We're wrapping up the season as we get into February, March here, and then into the summer.  We'll have summer encores, as usual. There's something for everybody. In the horror category, we showed “Winnie-the-Pooh, Blood and Honey.”  We got the sequel coming out. 

It's fun to be able to work on Winnie the Pooh one day and a documentary or Metropolitan Opera the next day. We do about 90 events a year. 

What's next for movie theaters?