I’ll try to keep the discussion this week to some positive industry indicators that will take (according to Google) around four minutes to read. That’s the least I can do after two weeks of lengthy dissertations on the current Writers Guild of American and SAG-AFTRA strikes against the Alliance of Motion Picture and Television Producers (AMPTP).
And I’ll not mention “Barbie” or “Oppenheimer” except as a public service announcement. You know your movie has reached an epic level of success when media outlets start getting press releases from completely unrelated tech companies mentioning title(s) in hopes of getting some recognition by tying themselves to a blockbuster film(s). That’s what happened this week when an announcement from NordPass hit the wires. The company specializes in password management and conducted a recent study of leaked database credentials discovering nine million passwords that referenced “Barbie” and “Oppenheimer.” So, be warned people, don’t use this summer’s biggest blockbusters as your passwords. If they happen to be the only words you can remember, at least combine the titles into something creative like… Barbenheimer.
(On a semi-related note, apparently that NordPass media marketing initiative actually worked. After all, had you ever heard of them before?)
This week, when I wasn’t busy trying to come up with new passwords this week, (I think I’m going to go with B@rbenh31mer), I was jumping between earnings calls for a number of media and cinema industry companies. Much like how Wall Street analysts and government economists will pour over employment figures, inflation reports and the consumer price index, the film industry prognosticator relies, in part, on box office returns and corporate earnings announcements.
I’m happy to say that after sitting on hours worth of conference calls listening to c-suite executives expound on EBITDA, GAAP and the benefits of free cash flow, there is primarily good news to convey. Much like after the first quarter of 2023 when most, though not all, cinema operators reported improved figures over the previous three pandemic suppressed years, the second quarter, saw continued gains. Thanks to a more robust release schedule filled with titles such as “The Super Mario Bros. Movie,” exhibitors improved their balance sheets further with increased revenue, greater earnings and, in some cases, reduced debt load. It’s important to note that we only have figures for cinema chains that are public companies, but there seems to be a broad bull market in the exhibition sector during the quarter ending 30 June.
We’ve already explained how IMAX had year-over-year growth during Q2 in revenue (+32% to USD $98 million) and earnings (+29% to USD $33 million). Last week we detailed Cinemark’s second best quarterly earnings report of all time and Wisconsin-based Marcus Theatres’ total revenue for the time frame came to USD $136.9 million, up 5.7% from a year prior. This week Cineplex, in Canada, saw revenue increase by 20.9% to CAD $423.1 million (USD $314.3 million), which allowed them to bring in CAD $176.5 million (USD $131 million) in net income during the second quarter. To put that in perspective, in 2022 their income during Q2 was CAD $1.3 million (USD $910,000). Cineplex even retired CAD $26 (USD $19.3 million) million in bank loans.
Of course, the earnings announcement everyone was eagerly waiting for was that of AMC Theatres and the world’s largest theatre operator did not disappoint. AMC saw a quarterly attendance of 66 million patrons, the company’s best admissions since the fourth quarter of 2019. Revenue grew to USD $1.35 billion, a 15.6% improvement over the same quarter in 2022. Net income may have only been USD $8.6 million for the period ending 30 June, but that beats a loss of USD $121.6 million from a year earlier. AMC seems to be generating operating cash, USD $99.8 million during the quarter and even repurchased USD $42 million of debt.
The company ended the quarter with USD $435 million in cash, down from the USD $631.5 million it had on the first of the year. That might not sound like much but it’s a better liquidity position than most had anticipated AMC being in during the third quarter of 2023. In other words, while AMC is still bogged down by debt, it has stopped some of its pandemic era cash burn. (We will be explaining AMC’s current shareholder settlement, stock conversion and reverse stock split in an upcoming post.)
Rather than go through each and every report, we published all the announcements on CJ Wire over the past three weeks. Feel free to peruse them at your leisure, though be sure not to skip over those from companies such as D-Box which only serve to emphasize a return to more profitable times.
This is not to say everyone in the motion picture business is running low on black ink after reporting Q2 earnings. There were some losses, especially among media conglomerates and mostly in two key areas; streaming losses and reduced advertising revenue. Sure, there were studios such as Sony and Paramount that reported decreased revenue from theatrical distribution, but year-over-year comparisons have always been questionable in that regard. It’s hard to compare a quarter from a year earlier in which you released “Top Gun: Maverick” against one where you had no significant release. The only thing that tells you as a studio executive or investor is that you need more releases so that one or more of them has a chance of becoming a blockbuster.
If you read between the spreadsheet lines (or rows) of studio earnings reports, the news isn’t as bad as it may seem, at least as it pertains to theatrical exhibition. The studios have signaled that the whole idea of releasing a movie in theatres before moving it over to their streaming service with an ample window of, say 60 to 90 days, makes them more money through both distribution channels. (Who knew, right?) Also, it turns out running a streaming service is very costly so some of these companies have announced price increases for their services, signaling that such hikes will be conducted regularly. This slowly eradicates the lower price benefit streamers have had over moviegoing. It may even lead consumers to cancel one of the streaming services they signed up for after cutting their cable cord.
Speaking of which, cord-cutting is seriously dragging down the financials of heavily consolidated media companies like Comcast, Disney, Paramount and Warner Bros. Discovery. The number of cable and satellite television subscribers in the United States has plummeted faster than any of these conglomerates anticipated, dropping to the lowest subscription level in over 30 years. This means that monthly carriage fees (per subscriber fees) for each of the media companies has decreased, as has the advertising revenue generated by smaller audiences. These legacy companies, not to mention Netflix, are now planning to bring advertising to their streaming services, essentially recreating the linear television business model their streaming services helped send into a downward spiral. In other words, after racing to catch Netflix, most of these media companies are returning to some form of their original revenue streams.
Sound familiar?
Movies
“Barbie” Upends Historic Distribution Practices In Middle East
Lebanon and Kuwait have taken similar stances on Warner Bros. hit movie “Barbie,” with Lebanon’s Culture Minister Mohammad Mortada banning the film from cinemas, claiming it “promotes homosexuality” and contradicts religious values. Similarly, Kuwait has also banned the film, alongside the supernatural horror movie “Talk to Me,” citing the need to protect “public ethics and social traditions.”
Lebanon has historically been considered more liberal in the Middle East, even hosting a gay pride week in 2017. However, tensions have risen as conservative voices, like Minister Mortada, enact bans on events associated with the LGBT community. Mortada’s criticism of “Barbie” centers around its alleged promotion of homosexuality, which he claims undermines family values and faith-based morals.
Conversely, two major Middle East markets, Saudi Arabia and the United Arab Emirates, have allowed the release of “Barbie.” Saudi Arabia, which only lifted a 35-year ban on cinemas in 2017, which forced residents to destinations such as Bahrain and the U.A.E. for tourist trips “simply for the sake of watching movies.” This trend has now been reversed with one Kuwaiti blogger even providing information on social media for moviegoers looking to cross the border to watch “Barbie” in Saudi cinemas.
Who would have predicted at the beginning of 2023 that “Barbie” would serve to highlight Saudi Arabia’s burgeoning cinema industry and underscore the evolving cinematic landscape in the Middle East.
Source: Hollywood Reporter
Box Office
Moviegoing Rebounds in Germany During First Half of 2023
German cinemas had a decent resurgence in the first half of 2023, as provisional figures compiled by Comscore reveal a substantial year-on-year increase. The total box office revenue for the first six months reached EUR €422.3 million (USD $461.60 million), accompanied by 41.5 million admissions. This marks a remarkable 42.1% surge compared to the same period in 2022, almost reaching the levels recorded in the pre-pandemic first half of 2019.
Among the successful releases, Universal’s “The Super Mario Bros. Movie” stands out, accumulating over EUR €50 million (USD $54.7 million and 5.1 million admissions. Disney’s “Guardians of the Galaxy: Volume 3” secured second place with EUR €22.5 million (USD $24.6 million) and 1.9 million admissions. James Cameron’s “Avatar – The Way of Water,” which opened in mid-December 2022, continued its strong performance, garnering a total of EUR €138 million (USD $151 million) and 10.1 million admissions by mid-May 2023.
Disney dominated the field of distributors, achieving a 30.2% market share of total box office takings and 25.2% of admissions for the first half of 2023. Universal followed with a 22.6% market share, largely attributed to successes like “The Super Mario Bros. Movie” and other titles such as “Fast & Furious 10” and “Book Club 2.” Leonine secured the third spot with a 9.2% market share and retained its position as the leading independent distributor.
We have to ask though, do German cinemas have air conditioning? Because a six-week heat wave in May and June saw moviegoing decline because audiences were reportedly looking for ways to escape the heat. Isn’t going to a movie theatre one of the best ways to cool off during the summer?
Source: Screen International
Cinemas
Netflix Upgrades and Reopens New York City’s Paris Theater
Netflix has unveiled the revival of the historic Paris Theater in New York City, following significant upgrades that include the installation of a Dolby Atmos sound system and the technology to screen 70mm films, a format not seen at the theatre for over 15 years. The Paris Theater, located at 4 W. 58th Street, will mark its reopening with a program called “Big & Loud,” featuring classics and sonically immersive films from 1 t0 9 September. Notable films in the 70mm lineup include “2001: A Space Odyssey,” “Lawrence of Arabia,” and “Once Upon a Time in Hollywood,” among others.
Netflix plans to use The Paris Theater as a venue for Netflix’s original movies and special events, along with hosting retrospectives and filmmaker appearances. However, the theatre will not exhibit first-run titles from other distributors. With a seating capacity of over 500, the Paris is now Manhattan’s largest Dolby Atmos cinema and the city’s sole remaining single-screen theatre.
Netflix’s involvement with the Paris Theater began in 2019 when the streaming giant saved the theatre from closure. It briefly reopened in 2021 before undergoing upgrades. The Paris Theater has a rich history, having welcomed patrons since 1948, with its early years focused on French titles and foreign-language films, turning it into a cultural landmark for cinema enthusiasts.
Source: Filmmaker Magazine
Cinemas
Former Edinburgh Filmhouse Staff In Discussion to Reopen Historic Cinema
An update with good news on the Edinburgh’s Filmhouse cinema. It’s former staff members have revealed their plans to reopen the venue next year after engaging in discussions with its new owner, Caledonian Heritable. Led by former chief executive Ginnie Atkinson, the team has established a new charity called Filmhouse (Edinburgh) Ltd with the goal of reviving the art house cinema and its historic role as the home of the Edinburgh International Film Festival. The cinema and its parent company ceased trading when the parent company, the Centre for the Moving Image, entered administration in October of 2022.
Caledonian Heritable, known for owning Edinburgh landmarks like The Dome and West End Brasserie (formerly Ryan’s Bar), acquired the building for GBP £2.65 million after it was put up for sale by administrators handling the assets of the CMI. Despite the acquisition, there has been significant support from the Edinburgh city council for retaining the Filmhouse building as a “cultural cinema.”
Atkinson and her team have engaged in advanced discussions with Caledonian Heritable regarding a long lease on the building, aiming to restore the cultural cinema to the city. Caledonian Heritable its commitment to the arts, stating, “We have a longstanding appreciation of the vital importance of culture and the arts to the city of Edinburgh and are pleased to be working with Filmhouse (Edinburgh) Ltd in anticipation of a new era at this key cultural venue.”
Given that Caledonian Heritable has experience operating bars and restaurants, and Filmhouse had a cafe bar… maybe the groups could work together to add a hip new dining venue to the reopened cinema that serves movie themed cocktails. Anyone up for a Vesper Martini?
Source: The Scotsman
Film Festivals
Head of Locarno Film Festival Addresses Drop In Films by Female Directors
Female representation among feature directors in this year’s Locarno International Film Festival program has declined compared to last year, according to figures presented by artistic director Giona A. Nazzaro at an event organized by the Swiss Women’s Audiovisual Network (SWAN). The occasion marked the fifth anniversary of Locarno’s commitment to the Programming Pledge for Parity and Inclusion in Cinema Festivals, with Locarno becoming the first A-list festival after Cannes to prioritize gender equality and inclusion in its programming.
This year’s submissions saw 26.3% of feature films coming from women directors, in contrast to 66.8% from male counterparts. The final official selection revealed 30.2% representation for women filmmakers, while their male peers accounted for 63.5% of the films screened over the 11-day festival. This is a drop of 6.5% for women-directed feature films compared to last year’s record of 36.7%, which was an increase from the 28% programmed in 2021.
Nazzaro praised Locarno’s efforts in promoting women filmmakers, stating, “Locarno single-handedly put more women on the map in the last year than more established festivals altogether.” He cited successful films from the previous year’s program, such as “Rule 34” by Brazilian director Julia Murat and “Nightsiren” by Tereza Nvotová, which won the Golden Leopard for Best Film.
Nazzaro proposed a shift in focus from mere statistical analysis, suggesting that alternative methods of achieving progress, like thinking creatively and pushing for exceptional quality, can be equally effective in advancing gender equality and representation. “Locarno can only survive if it makes a difference, and we’re trying to do that by supporting uncompromising voices,” Nazzaro affirmed, underlining the festival’s commitment to promoting diversity and unique artistic perspectives.
Source: Screen International
Sponsor Spotlight
Optimized coverage for small-to-medium-sized auditoriums
Optimized coverage for small-to-medium-sized auditoriums Dolby’s new System 126 screen speaker not only features a patented asymmetrical waveguide delivering exceptional audio coverage, but also offers both bi-amplified or passive, single-amp-channel operation.
Celluloid Junkie is the leading online resource dedicated to the global film and cinema business. The Marquee is our newsletter focused on motion picture exhibition; keeping industry professionals informed of important news, the latest trends and insightful analysis