The reporting of corporate earning figures for several Hollywood studios, cinema operators and vendors seems to have inspired a new-found confidence in the theatrical experience amongst US investors. This welcome change comes after several years of pandemic-induced focus on direct-to-consumer streaming propositions by the largest media companies. The likes of IMAX are now affirming that customers are willing to pay a premium for the best large screen experience to see films like “Top Gun Maverick” and “Avatar: the Way of Water”.

Direct-to-streaming and day-and-date release strategies are being increasingly abandoned by Hollywood studios and media companies, with the sole exception of Netflix. Warner Bros Discovery CEO stated in the company’s recent earnings call that direct-to-HBO Max movies provided “no value” to Warner Bros and that the re-booted “Lord of the Rings” franchise will go to cinemas with “real windows to optimize those products.” A similar message had been coming from other captain’s of the film and cinema industry:

A day before, Imax’s Richard Gelfond touted his company’s $98 million in fourth-quarter revenue, up 44% from the prior quarter, and $850 million at the global box office over the last year. And on Friday, Cinemark reported fourth-quarter revenue that exceeded analyst expectations, albeit with a larger loss, and saw its stock rise further. CEO Sean Gamble struck an upbeat tone about the number of movies coming to screen in 2023 — not just from traditional studios, but from streaming-first outfits like Amazon Studios and Apple Original Films hoping to capture some box office magic.

Scott Mendelson, The Wrap

Lionsgate’s stock saw a recent uptick on the strength of what is perceived as a strong 2023 theatrical slate. Meanwhile Disney’s Bob Iger has dropped hints about theatrical releases of sequels and franchises to popular movies. Only Netflix is sticking to a short or no theatrical window. However, the change of co-CEO has led for calls to re-evaluate this strategy. Not least after the success of the limited cinema release “Glass Onion: a Knives Out Mystery”.

Of all the film and cinema companies, the most attention has recently been lavished by Wall Street on IMAX. The large format operator is seen as a strong growth prospect for 2023, not just thanks to a steady slate of Hollywood films, but also Chinese and Indian films such as “The Wandering Earth II” and “Pathaan”:

“Imax is our top theater pick for 2023,” said Macquarie senior analyst Chad Beynon, calling it an “insulated technology company.” Gelfond is hedging his bets, having acquired a streaming video tech firm last year, but he signaled confidence in the global box office in the coming year on a Wednesday call with analysts. And as studios reprioritize theatrical revenue over streaming subscriptions, the kind of films favored by studios and moviegoers are those that tend to play best for Imax. 

The Wrap

Cinema operators such as Cinemark are leaning heavily into the premium formats, not least after figures for last year’s biggest hits showed a clear consumer preference for premium options such as IMAX, in-house PLFs, 4DX and more. Audiences “experiencing films in a shared cinematic environment develop stronger emotional bonds with stories and characters that helps build bigger brands, franchises and cultural moments,” said Cinemark’s CEO Sean Gamble on his company’s recent earnings call.