Cinemark Announces New Deals With Studios to Exhibit Movies Theatrically

Cinemark, the nation’s No. 3 movie theater chain, May 7 announced it has reached agreements to theatrically showcase films from five major studio partners across its U.S. screens.

This announcement builds upon the exhibitor’s November agreement with Universal Pictures and includes agreements with Warner Bros. Pictures, The Walt Disney Co., Paramount Pictures and Sony Pictures Entertainment.

Collectively, the agreements secure a consistent supply of content and demonstrate a shared commitment to offering consumers the ultimate movie-viewing experience, with compelling content exhibited within the theatrical environment, according to Cinemark.

The agreements come on the heels of Cinemark inking distribution of Netflix original movies in an abbreviated theatrical window — the first for the streamer. Cinemark isn’t divulging specifics on the studio deals, citing “unique attributes” specific to each studio that mutually benefits both parties.

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With many studios also operating direct-to-consumer distribution through streaming and premium VOD, exhibitors are having to re-visit legacy theatrical window agreements to remake them to better reflect the changing consumer access to screen entertainment.

“In our ongoing efforts to maximize attendance and box office during the pandemic and beyond, our goal is to provide the widest range of content with terms that are in the best long-term interests of Cinemark, our studio partners and moviegoers,” CEO Mark Zoradi said in a statement. “We are pleased with these recent developments and are confident we are taking positive steps toward reigniting theatrical exhibition and evolving the industry for a post-pandemic landscape.”

The new distribution agreements come as Cinemark attempts to claw its way out of a financial hole caused by the pandemic. The chain said it attracted 7.7 million moviegoers and $114.5 million in revenue in the first quarter (ended March 31). That compared with $543.6 million in revenue during the previous-year period. Its net loss ballooned to $208.2 million, compared with a loss of $59.6 million in the previous year period.

AMC Theater Chain Draws 6.8 Million Q1 Moviegoers, Narrows Loss

AMC Entertainment, parent of the world’s largest theatrical chain, AMC Theatres, May 6 reported that 6.8 million moviegoers worldwide frequented its screens in the first quarter (ended March 31). While that’s a 89% drop from 60+ million moviegoers in the same quarter a year ago, it’s a positive re-start for a company that has had scant new movie releases, and many observers left for dead during the height of the pandemic.

Adam Aron

Operating at 15% to 60% seating capacity across 585 domestic theaters, AMC operated an additional 97 international leased and partnership theaters, with limited seating capacities, representing approximately 27% of international theaters.

Revenue plummeted 84% to $148.3 million, from $941 million in the previous-year period. Net loss narrowed to $567.2 million from more than $2.1 billion a year ago.

“We finally can now say that we are looking at an increasingly favorable environment for moviegoing and for AMC as a company over the coming few months,” CEO Adam Aron said in a statement. “This is the result of a successful and steadily growing vaccination program in the U.S., Europe and the Middle East — especially so across the United States.”

Over the past five months, AMC has raised around $2 billion in fresh equity and debt capital, including the conversion of $600 million of convertible notes into equity at a price of $13.51 per share. Over the past 13 months, AMC raised approximately $2.9 billion of cash proceeds from new debt and
equity capital, secured $1.2 billion of concessions from lenders and landlords, obtained more than $150 million of assistance from European governments, and generated more than $80 million from asset sales.

“Taken together, we have made well more than $4 billion of progress from our implementing a myriad of capital actions to help us make it through this global storm,” Aron said.

Paramount Ups Q1 Licensing Revenue as Theatrical Revenue Craters

With Paramount Pictures generating a record low $1 million in revenue in the first quarter (ended March 31), the studio is offsetting ongoing pandemic-related box office declines by licensing content to Paramount+ and other streaming platforms.

Paramount, which had no releases in the quarter, generated $167 million in theatrical revenue during the previous-year period prior to the pandemic.

As a result, the studio bumped up by nearly 55% “licensing and other” segment revenue to $996 million, from $644 million in the previous-year period. The unit now includes Paramount Home Entertainment revenue from the sales and rental of movies. The home entertainment distributor had revenue of $174 million in the previous-year period.

“Licensing and other” revenue increased in large part from the distribution of content to Paramount+ and third parties, as well as revenue from the licensing of Miramax movies.

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Adjusted pre-tax earnings increased $177 million primarily due to higher licensing revenue compared to the prior-year period, which included higher distribution costs associated with theatrical releases during the first quarter of 2020 prior to the pandemic.

The studio’s last major theatrical hits included Sonic the Hedgehog, which generated $319 million worldwide in 2020, and Bumblebee, with $468 million following its box office debut on Dec. 19, 2018.

Report: 83% of Consumers Plan to Maintain, Increase Home Entertainment Spending

More than a year after the start of the  COVID-19 crisis, a majority of consumers are beginning to turn the page on the pandemic as vaccinations increase and a sense of normalcy returns, according to new data from Tremor Video.

Conducted in March and comprised of surveys with a nationally representative sample of 893 respondents in the United States, the research found that 56% of consumers feel optimistic about the year ahead and 60% predict a return toward normality within the year.

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According to the data, 83% of consumers plan to either maintain or increase their current spend levels when returning to a more normal life, on average across categories. Consumers report that they plan to either maintain or increase their spending at the highest rates for the following categories: groceries (92%), beauty & personal care (86%), consumer electronics (84%), home & garden (84%) and home entertainment (83%).

With this likely increase in spending comes promising news for brands with brick-and-mortar dimensions of their businesses, as 84% of consumers plan on shopping in-person during the year, with 29% reporting that they will do all of their shopping in-person and 23% reporting that they will do most of their shopping in-person with some online shopping.

Although the research suggests that consumers are eager to resume their pre-COVID activities, their enthusiasm for this return to more normal lifestyles does not necessarily mean that their rates of TV engagement will decline as a result. In fact, most consumers are likely to engage with connected TVs at comparable or higher rates as the pandemic dissipates. Over the next six months, 86% of consumers plan to watch live TV at the same or increased rates, 88% plan to watch the same or higher amounts subscription-based VOD, and 81% plan to maintain or increase their viewing of ad-supported VOD.

“After a long period of being homebound, consumers are feeling positive about the future, as they look to resume activities like dining out, traveling and in-store shopping, all of which should give advertisers a renewed sense of confidence in the months ahead,” Terence Scroope, VP of media insights and analytics at Tremor Video, said in a statement. “In parallel, our study suggests that consumers plan to increase their time with CTV content, reinforcing just how essential the medium will continue to be for advertisers as they look to fine-tune their 2021 media strategies.”

Report findings include that since March 2020, TV viewing has spiked considerably, with 61% of consumers saying they have watched more TV than before the outbreak of the pandemic. Over the next six months, increased engagement with both paid and free TV streaming will be most pronounced among younger age demos (18-44s) and higher income ($100,000 or more, annually) demos

Consumers report that they will be more supportive of local businesses with most (59%) planning to continue shopping locally. Most (58%) consumers have adopted new behaviors thanks to increased time shopping online during COVID; this is especially prevalent among the 18-34 age group.

 

Universal Pictures Ups Q1 Home Entertainment Revenue

Despite the lingering effects of the COVID-19 pandemic and shortage of new films, Universal Pictures Home Entertainment April 29 reported first-quarter (ended March 31) revenue of $282 million, which was up slightly (2.9%) from revenue of $274 million during the previous-year period.

The revenue topped Universal’s theatrical ticket sales of $39 million, a total that paled in comparison to the box office of $316 million during the previous-year period. Theatrical was undermined by ongoing pandemic-related issues, including limited cineplex seating capacity and the studio’s decision to hold back release of major releases.

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Top disc sellers in the quarter included Liam Neeson actioner Honest Thief with $2.9 million in combined DVD/Blu-ray Disc unit sales. The low-budget movie has proved to be a box office hit during the pandemic, generating $14.1 million at domestic screens, $31.1 million worldwide since its Oct. 8, 2020, debut. Director Sam Mendes’ World War I drama 1917 added $1.1 million in disc sales; and The Office: The Complete Series included $6.5 million in sales.

Overall studio revenue decreased 0.6% to $2.4 billion, primarily reflecting lower theatrical revenue, offset by higher content licensing revenue. Theatrical revenue decreased 87.7%, primarily driven by the deferral of theatrical releases as a result of theater closures and theaters operating at reduced capacity due to COVID-19.

Content licensing revenue increased 14.1%, primarily due to a new licensing agreement (i.e. WWE Network) for content that became exclusively available for streaming on Peacock during the quarter. Adjusted pre-tax earnings increased 65.7% to $497 million, reflecting lower revenue, more than offset by lower operating costs.

The decrease in operating costs was primarily driven by lower advertising, marketing and promotion expenses, partially offset by higher programming and production expenses. The decrease in advertising, marketing and promotion expenses was primarily due to a reduced number of theatrical releases as a result of COVID-19.

The higher programming and production expenses were primarily driven by costs associated with the new licensing agreement with Peacock during the quarter, partially offset by lower amortization associated with theatrical releases in the current period.

Catalog Saves Sony Pictures Home Entertainment’s Pandemic-Ravaged Fiscal Year

Sony Pictures Home Entertainment April 28 reported fourth-quarter and fiscal-year 2020 (ended March 31, 2021) revenue of $139 million and $778 million respectively. That was down 54% ($164 million) and 15% ($140 million), respectively, from the previous-year period ended just as the COVID-19 pandemic started.

The silver lining in the results is that nearly all of fiscal-year 2020 home entertainment revenue came from packaged media and digital sales of catalog movies such as Spider-Man: Far From Home, Venom, Blade Runner 2049 and Jumanji: Welcome to the Jungle, among others. The lone new release in 2020, Bad Boys For Life, generated $424.5 million at the pre-pandemic global box office in fiscal-year 2019 — but sold $28 million in combined DVD and Blu-ray Disc units in 2020.

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The top-selling combined DVD/Blu-ray Disc in 2020 was Jumanji: Welcome to the Jungle, which generated more than $48 million from 2.4 million discs.

When the theatrical pipeline returns to normal, Sony’s stockpile of content should flood the box office, retail and streaming distribution channels. The studio buttressed forward results with recently announced streaming video distribution agreements with Netflix, Disney+ and Hulu.

As a result of the pandemic, however, Sony Pictures’ delayed release of new theatrical movies in 2020 decimated the financial picture. The studio reported theatrical revenue of $53 million for all of 2020, compared with $1.7 billion in the previous fiscal year.

Sony Pictures Television production revenue fell 34% to $367 million, from $555 million in the previous-year period. For the fiscal year, revenue dropped less than 8% to $1.45 billion, from $1.56 billion in fiscal-year 2019.

Overall, studio revenue dropped about 24% to $7.1 billion, from $9.3 billion in fiscal-year 2019.

 

AMC CEO Aron: ‘Godzilla vs. Kong’ Quintupled 2021 Revenue in Five Days; Says Studios Moving Back to Shorter Theatrical Window

Warner Bros./Legendary Entertainment’s Godzilla vs. Kong opening box office in the U.S. continues to resonate throughout the industry. The actioner generated $48.5 million across five days, sending its global haul near $300 million. For AMC Theatres, the world’s largest exhibitor, the clash of cinematic monsters has been a godsend.

“If you look at our opening performance from Wednesday to Sunday, our business at AMC was five times, quintuple, what we have done in all the weekends before that in 2021,” AMC CEO Adam Aron told Fox Business Network’s “The Claman Countdown.”

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With daily vaccinations in the U.S. rising exponentially, Aron was told that Dr. Anthony Fauci, the federal government’s infectious diseases expert, had told a separate podcast that at current vaccination levels, movie theaters could be operating at full capacity by the end of the year.

“Well, obviously, we’re so excited when we can lift capacity caps, when we can take masks off,” Aron said. “We’re keeping our 50% capacity caps in place. We’re keeping mask-wearing for now. And we are going to run our theaters this summer with the tightest safety standards we can.”

Aron said more than 10 million moviegoers have frequented AMC Theatres in the past several months, and he hasn’t heard of one documented case of the coronavirus being transmitted in AMC theaters.

“That’s very good news that our safety protocols are working,” he said.

With Disney slated to launch Cruella and Black Widow in theaters and on Disney+ (for a $29.99 add-on price) concurrently on May 28 and July 9, respectively, Aron was asked if the exhibitor has come to a distribution agreement with the Magical Kingdom.

Aron said Hollywood studios are re-thinking their simultaneous theatrical/streaming movie debuts, with Warner set to return to a shortened window (45 days, according to Aron) in 2022. The studio is releasing all 2021 theatrical titles concurrently on the HBO Max SVOD service. Universal Pictures has a revenue-sharing deal with AMC that enables it distribute movies into consumer homes 17 days after their box office debut depending on ticket sales.

“Universal, who’s a big advocate for this simultaneous release on the same day at home that movies hit theaters — they abandoned that concept,” Aron said. “I have every expectation that we will find a happy middle ground with Disney that’s good for Disney shareholders and good for AMC shareholders too.”

Verizon: Streaming Video Use Up 21% During Pandemic

Consumer habits during the ongoing pandemic have altered entertainment activities in the home. New data from Verizon found that traffic on major streaming video sites is currently 21% above pre-pandemic levels — supporting the notion that the nation has a larger appetite for streaming.

In a survey conducted by Morning Consult for Verizon, about 44% of respondents said the TV and streaming content has helped them connect with friends and family during the pandemic. Among those who currently stream content, 82% anticipate that they will be spending more or the same amount of time that they are now watching content through streaming services a year from now.

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Two-in-three U.S. adults (67%) said they have been spending at least three hours per week watching live TV. More than half (59%) said the same about watching content through a streaming service.

Nearly half of adults (47%) said they have subscribed to a new streaming service since the start of the pandemic. Most say they have binge watched shows at least once or twice (70%). While there is no final verdict on American’s preference to “binge watch” versus watch episodic content, 47% of younger respondents (Gen Z) said they prefer to binge.

Most U.S. adult households (62%) currently subscribe to a cable or satellite television service. Nearly 1 in 4 (23%) said they’ve cut the cord. Among millennials, more than 21% said they have never subscribed to a cable or satellite television service.

“The pandemic has forced all of us to face challenges we never considered,” chief technical officer Kyle Malady said in a statement. “A year into the pandemic, data usage on Verizon networks remains at almost 31% above pre-pandemic levels, a clear indicator that Internet consumption and the acceleration of technology adoption are major byproducts of this moment. We’ve seen the shift to digital jump ahead five to seven years.”

Meanwhile, mobile gaming has really taken off during the pandemic. Nearly 50% of respondents report that they have purchased or downloaded a mobile game at least once since the pandemic started, while 36% reported doing the same for a computer or console game.

Nearly a third of respondents (31%) said that they spend three or more hours a week playing games on their mobile devices. About one-third of adults who’ve spent time online gaming (32%) and talking to friends or family via video calls (32%) said they were spending more time doing these activities in the early months of the pandemic than they are now, while nearly half say they were spending about the same amount of time as they are now (45% and 46%, respectively).

Report: Pandemic Consumers Sticking With Streaming, Not Returning to Pay-TV

The pandemic has been good for subscription streaming video, and bad for linear pay-TV. That trend is not changing in 2021, according to new data from Hub Research.

As expected, subscriptions to the five most-popular streaming video services has continued to climb since pre-COVID, with HBO Max up dramatically since November. The report said Max has benefited from WarnerMedia’s decision to stream all 2021 Warner Bros. Pictures’ movies on the day of theatrical release — starting with the release of Wonder Woman 1984 last December.

Citing data from a February survey of 3,008 U.S. consumers, ages 14 to 74, who watch at least one hour of TV per week, Hub found that the proportion of consumers who have purchased a first-run movie on streaming has been increasing steadily since last summer, kick-started with the Premier Access premium VOD release of Mulan in September to Disney+ subscribers.

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Younger consumers are the most likely to have streamed a first-run movie, with 18-24 the age sweet spot. Once one hits 55 years old, interest in buying first-run films to stream in the home is almost nonexistent.

 

Among survey respondents who added a streaming video service during the pandemic, post-COVID loyalty appears to be strongest for Disney+ (77% of those who signed on say they’ll keep it; only 7% say they’ll drop) and Netflix (73% vs. 4%).

The likelihood of respondents planning to keep Max is lower, with 63% who added the service during the pandemic saying they’ll keep it and 17% saying they’ll cancel — underscoring the idea that focusing on first-run movie releases could be both a blessing (surges in sign-ups when movies are released) and a curse (cancellations once they’ve finished watching).

 

Finally, 89% of February respondents who canceled their traditional pay-TV service during the pandemic, said they would have canceled even if COVID-19 hadn’t happened — the highest proportion Hub Research has seen during the pandemic.

“What’s been most interesting to us in our pandemic-related research has been trying to determine which pandemic-induced changes in TV behavior will persist once life begins to return to normal,” Peter Fondulas, principal at Hub and co-author of the study, said in a statement. “This wave of the study strongly suggests that Americans have grown more than just accustomed to the TV viewing adjustments they’ve made during the pandemic, and are ready to embrace a new, streaming-centric normal.”

Disney’s ‘Raya and the Last Dragon’ Remains Atop Domestic Box Office Concurrent With Premier Access in the Home

Disney’s animated Raya and the Last Dragon continues its strong pandemic box office run, reportedly generating an estimated $5.2 million in ticket sales across more than 2,200 domestic screens for the weekend ended March 21. The title has generated about $24.8 million ($71.6 worldwide) since its March 3 bow concurrently with premium VOD ($29.99) availability on Disney+. Raya is Disney’s second PVOD release following live-action Mulan.

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Among the weekend’s top-performing theatrical titles in the U.S., the usual suspects continue to resonate, including Warner Bros. Pictures animation release Tom and Jerry with $3.8 million ($32 million total; $70+ million global); Lionsgate’s Chaos Walking generated $2.2 million ($10 million; $15 million), followed by the studio’s newcomer, The Courier, starring Rachel Brosnahan and Benedict Cumberbatch, the latter as a businessman-turned-Cold War-spy, with $2 million. Universal Pictures/DreamWorks Animation’s The Croods: A New Age continues to shine, selling $620,000 in tickets ($55.2 million; $159.7 million) despite being available across multiple retail channels.

Oscar nominees A Promising Woman and Minari saw weekend ticket sales of $195,000 and $306,000, respectively, bring the movies’ total theatrical revenue to $5.7 million and $1.3 million.

The weekend saw most of the U.S. exhibition market re-open for business, albeit at 25% capacity (or 100 people per screen) due to ongoing government restrictions.

“This weekend showed solid results from holdovers, demonstrating the revenue generating horsepower of opening the biggest box-office market in North America,” Paul Dergarabedian, media analyst with Comscore, said in a statement. “Eager movie fans in Los Angeles showed up in solid numbers to enjoy the big screen experience once again.”