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Monday, November 10, 2014

ON ANY SUNDAY - A Solid Launch and General Updates

Good Morning HHSE Friends & Shareholders - Quick update on a few items of interest to Shareholders:

1).  Theatrical - HHSE Managers have received a lot of emails over the weekend inquiring about the theatrical launch of "ON ANY SUNDAY: THE NEXT CHAPTER" and the ongoing release plans for the title.  The initial weekend results (still being accumulated from some "non-Rentrak" reporting theatres), show about $345,000 in gross revenues (Friday - Saturday - Sunday).  Most of Monday will be spent working with the exhibitors to select the best locations for the film as "hold-overs."  Typically, if the film performed in the top 50% of all titles in a multiplex, it's a good candidate to be held-over for another week. We think it's possible that the film's run will be extended in about 50-to-70 of these initial locations, and that over the next few weeks, about 50 new sites will open the film. These results are in line with Company goals and are expected to fuel a strong demand for the DVD and BluRay release in February.

PLEASE NOTE: This film features stunning visuals and outstanding Dolby "Atmos" surround sound.  It is best viewed in the environment of a large movie theatre.  HHSE strongly recommends that you see the film at your local theatre ASAP as many locations will be "finaled" (ended) as of Thursday to make room for upcoming Holiday releases.  Many locations will also"hold-over" the film as well, but HHSE will not know the final hold-over locations until late today.  SEE IT WHILE YOU CAN!

2).  Form 10 Status - Several pages of formatting issues were received back late last week, which will require about a day's worth of full focus to address and properly reformat.  Upon completion of the theatrical hold-overs (above), modifying this document will become the priority issue again.

3). AFM - Thus far, only two titles have been identified that meet the Company's needs for quality, commercial viability and deal-structure reasonableness.  One industry veteran remarked that the title selections at this year's AFM ("American Film Market" in Santa Monica, CA), felt like a flea market of overpriced, stale goods - "last year's Halloween candy gone bad."  Over the past few years, the AFM has lost its value as a legitimate marketplace for most distributors.  Major festivals - such as the Cannes Festival and Marche du Film - require that attendees be vetted for professional legitimacy and experience before being awarded accreditation. Without such controls over attendees, a previously relevant festival (like AFM) can become crowded with amateurs and hobbyists, fueling an accelerated flight away by legitimate buyers and distributors.  Regarding acquisitions in general - with the new Medallion Releasing multi-studio label venture (being managed for HHSE by industry veteran Tom Sims) - the Company is currently dealing with an abundance of titles... thus rendering the anemic AFM availabilities moot.


... and speaking of which... here's a quick primer for those of you that are unfamiliar with the metrics for success in theatrical distribution.  Let's randomly pick a location where ON ANY SUNDAY appeared last weekend and break out the overall attendance.  In Nashville, at the Regal Opryland Theatre, ON ANY SUNDAY was the #8 top grossing screen (out of 20) and was the # 6 film behind INTERSTELLAR, BIG HERO, OUIJA and NIGHTCRAWLER. So at this location, the title was in the upper 50% range, but not by a big margin.  Total admissions were 299 tickets for a gross of $3,179.  Some shows were poorly attended - which was true for all but the top two films - and some shows had a decent crowd. Average evening shows were about 30 persons.  Generally speaking, the Monday-thru-Thursday opening midweeks are 10% of the weekend's gross... which in this case would be about $300 per day for four days.  The second weekend will probably hold at about 70% of the first weekend (although nationwide, due to loss of screens, the drop off for week # 2 is generaly 50% or greater).  So if these industry trends hold true at this location, by Thursday, Nov. 20, the title would be at $7,400 for that one theatre.  Not a huge amount, but all those $7,400 grosses do add up to a decent result with all of the other locations.

4).  SHARE STRUCTURE UPDATE - at the request of some Shareholders (who are responding to the false report that some additional or unannounced "dilution" has occurred), the following is the true and correct Share Structure Count for Hannover House, Inc. (HHSE) as of today, from the Transfer Agent, Standard Registrar & Transfer Co., Inc.:



CHANGE SINCE OCT. 20:                   0

5).  REDBULL RELATIONSHIP - As a point of clarity, the relationship between Hannover House and Redbull Media House North America, Inc., is two-tiered.  With respect to the theatrical release of "ON ANY SUNDAY: THE NEXT CHAPTER," Redbull is advancing all of the P&A (releasing costs) and hiring Hannover House for theatrical booking, releasing and collections tasks.  In this respect, Redbull is technically the "distributor" and Hannover House is technically the "implementation provider" because all of the financial risk has been borne by Redbull.  There will be some trade and press listings showing Redbull as the distributor, others showing Hannover House and others still listing "Redbull / Hannover" or "Hannover / Redbull" regardless of how we characterize the activities of each respective company.  However, with respect to the USA DVD and Blu-Ray release, Hannover's role is that of a traditional "distributor / licensor" model, with Hannover identified on packaging and ads as the distributor and Redbull as the producer and program source.  In order to better clarify these roles, Hannover House will include role-quantifiers in all future press releases or announcements regarding the theatrical portion of this release.