♪ caroline: from bloomberg's world headquarters in new york, i'm caroline hyde. romaine: i'm romaine bostick. gina: and i'm gina martin adams, in for taylor riggs. caroline: we are near the weekend, so today's we will -- today we will focus on bond -- singular.

james bond. the movie becoming the biggest release since the start of the pandemic. we will not only dig into the box office, but live performances at the met, making its stronger -- strong return. not much of a return for jobs though, for the industry. romaine: you saw those leisure and hospitality jobs, our tent entertainment -- the service economy is sort of getting rebooted. this was the pandemic loser, when we went into locked down. a lot of jobs were lost as a result. we are now crawling back into some of those jobs, and it appears that people are not only wanting to get out, but they are willing to spend a little bit more and spend more time out, much more so than what they were doing re-pandemic levels -- pre-pandemic. caroline:caroline: have you been to the cinema? romaine: i have not.

we will talk to peter delve a little bit later, but right now we will talk to lisa reese -- alicia reese, joining us to talk about the movie box office. let's start off with the obvious question here. before the pandemic, the movie theater business was not in the best position. it obviously exposed a lot of things here. there is now a big push to get people back with blockbuster movies -- "venom," "james bond," a lot of things in the slate here. do you think that will be enough to get box office ticket levels to pre-pandemic levels? alicia: i would actually argue that the box office was quite strong still in 2018 and 2019 strongest box office years -- 2019, the strongest box office years on record. what was exposed during the pandemic was the studio's ability to produce a theatrical window and shrink it to nothing

in many cases because of the streaming services that they could utilize. many started their own, so they wanted to promote those. what the pandemic allowed them to do was reduce the actual windows and offer films on screens and streaming services. but most of the studios have already committed to theatrical releases in 2020 two and beyond. disney has not yet announced this strategy, but they did announced for q4, and that bodes well for 2022 and beyond. that being said, the exclusive theatrical releases will not be as long as they were historically. 90 days or 75 days will be stretched down to 17 for smaller films and independent films and 30 to 45 for the box office blockbusters.

caroline: talk to us about what a blockbuster ends up being anymore. to me as a parent, it's so much easier to watch movies from my home, but the theatrical needs? the need of a big-screen looming in. are we ending up to pivot towards a movie that ends up in a cinemark? alicia: what we saw last year, with trading on the stocks and the sentiment around the box office, last year, people thought the pandemic accelerated the demise of the movie industry. what we are starting to see and what will continue to see is a rebound in that attendance, perhaps not to levels we saw before because of those theatrical windows, but we will see a shift towards premium screens in those windows. more people will want to see these movies in imax or on the large premium format screens exhibitors have, because you have the gen z audience and young millennials going out, and

they want to see those movies, and they want to see them on premium screens. they make an event out of it. that should make up for, at least in part, the loss of tenants from the reduced theatrical windows. gina: clearly, the cinemas themselves need to invest in a manual of some new experience. we have giant screens. we went through a 3d phase. what is the next phase that will draw the consumer back into the theater? alicia: sure. i think the latest things they did that were really helpful were to focus on food and beverage. a lot of that is bringing in hot food and alcohol, things that would create a more premium experience for a moviegoer. they also reclined most of their theaters and expanded the spacing, so the capacity declined, but attendance increased as the comfort level of the theaters increased.

like i am saying with this increased premium screen viewing, you will see more screens per theater, which would increase ticket pricing overall. romaine: i'm curious about the relationship right now between the theaters and the actual content distributors, the content makers here. the idea that if some of these theaters can start to escalate their profitability through premium features that are divorced to a certain extent from the studios themselves, does that change the equation as far as what they are willing to put up with in regard to the timeframe of theatrical releases? one week or two weeks of exclusively before it goes to a streaming platform? alicia: the studios and distributors charge a percentage of box office space for films.

with a reduced window, they charge less. one thing we are excited about for 2022 and beyond is companies like netflix getting involved in theatrical, where a lot of companies that would -- films that would have gone direct to streaming, there is a possibility that they could have a short theatrical window and the studio or distributor is willing to charge them a much lower film rent for that title. the exhibitors get a great deal now. before, they were concerned about preserving that window, but now that the risk has been taken and we know what happens, what it's like, and that studios are comfortable with this, we can proceed. i think everyone can proceed pretty profitably. caroline: back in the day, when we all went to the cinema all the time, people sort of bought ongoing subscriptions. they could go as many times as they wanted, go for hours on end.

we are talking a lot about how you offered the premium product, the cocktails and the like, but are consumers ever going back to that? alicia: there are programs similar to that. the original program that offered that was not sustainable, it was not profitable in any way. they were giving dollars away for a nickel, basically. it was not sustainable. but what the movie theaters have now, cindy -- cinemark has a program where you get one free moviepass per month, and if you don't use it, it rolls over to the next month, and you can upgrade to a premium screen for a low price, and you can get food and beverage for discounted rates. it encourages people to go, it is low price, and it encourages more frequent moviegoing at a higher price point. but these things are working. they are really driving loyalty

among these customer bases. gina: given you are an equity analyst, i would be remiss to not take advantage of that insight for the third quarter earnings season, which is right around the corner. what surprises are you expecting from the companies you follow? could we see upside surprise in this space, given suppressed expectations? what's embedded in the price now and what could be a surprise? alicia: q3 came in lower than was originally expected going into the quarter, but once everyone saw that coming, expectations really came in. the only surprise you might see his industry outperformance from the major movie theaters versus the industry, because they don't have any canadian theaters in canada with -- in the quarter. the issue is more what happens in q4. can they maintain these gains and get all the benefits from

this stronger q4? are there going to be a lot about performers in q4? and what happens in 2022. that is the interesting thing here. q1 does not look great and puts some investors off, but then you have q2 through q4 next year that are looking strong, and i think they are being discounted right now. they are not really priced in to anything. caroline: thank you very much. alicia reese. i'm next, a return to the opera in new york city. we speak to the general manager of the metropolitan opera. this is bloomberg. ♪

romaine: welcome back. today we are focused on the recovery of the entertainment sector. you go back to the start of the pandemic, marched up 2020, everything shut down. you could not go anywhere or buy a ticket. a lover of the performing arts, movies, whatever it is, you have been waiting for this day. broadway reopening three weeks ago, the metropolitan opera reopened just last week. putting on a great show here. we were talking about getting those big blockbusters back. a big question, caroline, boils back into whether this would be the same as they were people pandemic -- same as it was pre-pandemic. the opera has held up pretty well. caroline: especially when you

have shows such as this, pushing boundaries. everyone wants to go see. it stirs the excitement, but i am fascinated with how christmas will unfold. because for me, that's going to see tchaikovsky, the nutcracker. romaine: abc is back as well, the american ballet center at lincoln theater? this was fantastic, the first black composer at the met opera, and a fantastic show. a different type of opera for a different type of era. caroline: what a time to be going. let's talk to peter gelb, helping put this all on, the general manager of the metropolitan opera. you hear the enthusiasm in our

voice, but i can't even think about the herculean task of getting it off the ground and getting it done safely. peter: first off, thank you for speaking so enthusiastically about that. we need people to be talking about us. that's why we are so happy to see the opening of the met with this opera, by the first black composer, terence blanchard, to have a work on the stage of the met. it is the perfect way to engineer our comeback. we have many challenges. we were closed for many months, like broadway, and we are the largest nonprofit performing arts company in the united states, around the world. we have 3000 employees and it was extremely difficult to keep the company alive during the shutdown. the challenges we face today are many.

a nonprofit organization, when we sell out, we are losing money, so we have to rely on the generosity of donors, our expenses are very high because we have these covid precautions, with the met being a fully vaccinated house, we have had to mandate that and all 15 unions have agreed to accept that. but we cannot return without vaccinations for everybody. romaine: what have conversations been like with the performers? these are basically athletes to a certain degree, with the strain they put on their bodies and their voice. they also need to be in shape. for a lot of these people, they have not had a chance to perform publicly for a year and a half, maybe even more. what conversations have you had with them as they come back to the stage and try to get back to that form we are so used to seeing ? peter: opera singers actually

have a tendency to sing too much, i think, and overwork themselves. even though they were very frustrated and lost a lot of money not performing over the past 18 months, it was a time for their voices to get a lot of rest. vocally, they managed to do the practicing they needed to do and at the same time, they have come back with rested voices, which is a treat for the audiences. i think performers are a special type of creature. they are great artists, and we have many of them at the met. their adrenaline takes off when they are back on the stage. for them, it is such an emotional time to return. many singers were crying tears of joy on that opening night, and i think it was not a question of them being ready. they were too ready. they have been ready for months. gina: and clearly your customers

were ready to come back as well. in the post-pandemic environment, after what we have been through over the last 18 months, how have you changed your strategy in reaching your ultimate customer? have you changed your marketing techniques and thought about new ways to raise that client base? peter: we were already changing our marketing before the pandemic, because for us, the marketing is driven by the artistic choices we make, and that has been changing to reach a more diverse audience and feature more contemporary works. this year, we have three premieres of operas for the first time in 100 years. ants planning and strategy, but at the same time, you are seriously hampered by the fact that like broadway, a lot of our

audience is tourists. there are no tourists at all in the country right now. 20% of our audience are international tourists, 30% are domestic tourists. we hope that with "fire shut up in my bones" and others, we are reaching a diverse audience in new york that new yorkers who have not been to the opera before will attend. romaine: have you been in conversation with local officials, the mayor and others who are in charge of facilitating some of that tourism? have they given you any insight as to when you might be able to expect more normalized tourism and traffic here in the u.s., in new york city specifically? peter: we are in touch with the mayors office and the governor's office, but we rely on the

chamber of commerce of new york, and they have predictions of tourism not returning for several years. we have to figure out how we are going to manage over the next couple of years until our audience is fully back. on the other hand, developing new programs and audiences locally, we will end up being stronger than ever. romaine: peter, i appreciate you taking time to be with us. peter gelb, the general manager over at the metropolitan opera, which started its season last week. a great lineup for anyone in new york are coming to new york as a tourist. coming up next, we will stay on this topic and take another angle here -- one of hollywood's most powerful unions has voted to authorize a strike during a time a lot of hollywood studios are trying to ramp up production and get all that content -- which we have just been talking about -- back up and running. we will bring you the latest, right here on bloomberg.

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caroline: today we are focused on the entertainment industry as it looks to recover from the pandemic. one aspect is the labor element of all this, the strikes in hollywood. romaine: the strike authorized by one of the biggest unions that represents all the people behind the scenes. this would be a big deal if they walk off the job, which they have not done just yet. let's bring in chris palmeri to give us an update. give us the lay of the land here. they have authorized a strike, but have not moved to stop working yet, right? chris: an overwhelming part of iatse members voted to go on strike, if the management of the unions to

-- decides to. today is the third day they have been talking, and so far, at least, they haven't walked away from the table. both sides continue to talk tough, but it appears they may be making some progress. caroline: and what form? is it all about wages? is it about safety? is it about time off, healthy? what is this about? chris: probably both. this is a pretty encompassing contract they are negotiating, but the big issue is really quality of life issues. covid stop production for a lot of these movies and tv shows and then, as all of these companies, disney and netflix are spending so much money trying to get new programs, new content for their streaming platforms, we have seen this surge -- i look around my neighborhood in los angeles, every street has a tv show being filmed.

there's big demand for these workers and they are complaining that they are being worked very hard. one of the issues is called fr aturdays. they would call them in late on the day on friday and they would work all night into the weekend. how much time between calls to work? 10 hour minimum. like they have for flight attendance and pilots. whether they work on the weekends and get lunch breaks -- those issues. romaine: a significant issue if they walk off the job, but it will be a good thing to keep an eye on these labor issues. let's ramp up that production and get the content out. chris palmeri out there in l.a., tinseltown, as we used to call it, caroline. caroline: tinsel has a totally different meaning for me. it's about christmas for me. romaine: it's like what we

talked about. that's a whole other conversation. gina: it's all flair, you know? romaine: all right. guys? i hope everyone has a great weekend. gina: thank you. caroline: i will be seeing the new "james bond" film. that's what'd you miss? romaine: have a great day. ♪

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