AMC Entertainment Narrows Q1 Losses Thanks to Superhero Movies

Sony Pictures’ Spider-Man: No Way Home and Warner Bros. Pictures’ The Batman contributed to AMC Entertainment narrowing its first-quarter fiscal loss (ended March 31) to $337.4 million, compared with a net loss of $567.2 million during the previous-year period when the world’s largest exhibitor was operating at less than 50% capacity. Revenue increased to $785.7 million, compared with $148.3 million for the first quarter of 2021.

“Our results represent AMC’s strongest first quarter in two full years,” CEO Adam Aron said in a statement. “We continue on our pandemic recovery trajectory, more than quintupling revenue and improving adjusted [pre-tax income] by nearly 80% compared to a year ago.”

Aron said the cumulative success of the aforementioned titles, along with Paramount Pictures’ Sonic the Hedgehog 2 drove the quarterly revenue gain.

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Indeed, global AMC attendance increased more than 39 million, from 6.8 million a year ago. U.S. theatrical attendance topped 25.8 million, from 6.2 million. International market attendance topped 13.2 million, from 558,000.
AMC operated an average of 10,099 screens in the quarter, compared with 6,724 screens a year ago.

“When Hollywood releases films that moviegoers want to see, people flock to cinemas in huge numbers to watch movies where they were designed to be seen, in theatres, on the big screen,” Aron said.

Analyst: Concerns About Moviegoers Not Returning to the Theater Are Overblown

As the theatrical movie business slowly emerges from the pandemic, concerns about any permanent damage the COVID-19 virus have wrought on the moviegoing public are overblown, according to Wedbush Securities media analyst Michael Pachter.

Michael Pachter

Writing in an April 5 note, Pachter said the North American first-quarter (ended March 31) box office ended up 465% at $1.34 billion in revenue, compared with $288.1 million in the previous-year period when most exhibitors either remained closed or operated at reduced capacity. The current year Q1 was still down 44% relative to Q1 2019 at $2.39 billion, due to the relatively slight release slate.

“We are notably more positive as the volume of the release slate normalizes and the quality of releases improves notably,” Pachter wrote. “Barring any significant resurgence of COVID, we expect attendance to begin normalizing in the coming weeks and months.”

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That said, Pachter does not expect the domestic box office to return to its former glory in 2022.

“We are conservatively estimating 2022 domestic box office up 46% over 2021 (down 43% over 2019), and 2023 box office up 32% over 2022 (down 24% over 2019),” Pachter wrote.

The analyst, citing an internal survey of more than 1,000 moviegoers, found that the share of people not planning to return to the theater this year is smaller than feared, and is still driven in part by ongoing pandemic-related fears.

Of the survey respondents who had gone to the movies at least one to two times per year before the pandemic, fewer than 20% said they do not plan to attend the movie theater in 2022.

“Overall, we view this result as relatively benign given ongoing concerns related to the pandemic (the top reason cited for not attending movie theatres in 2021, and still a significant concern among respondents), a shift in behavior over a two-year period of watching content at home, the plethora of quality content now available on a variety of streaming services, and inflationary pressure,” Pachter wrote.

The analyst contends studios have myriad opportunities to close the gap on overall box office revenue by continuing to market blockbusters more heavily with Imax and other premium large format screens, as well as with alternative content, such as live concerts, comedy shows, and sporting events.

“Based on our survey results, we think that interest in alternative content digitally broadcast to movie screens is substantial and can drive incremental attendance,” Pachter wrote.

Deluxe Expands Pact With Satellite-Based EchoStar for Digital Theatrical Movie Distribution

Deluxe and EchoStar Corp. July 8 introduced an expanded movie distribution platform for U.S. theaters that adds high-speed, terrestrial broadband and a new content management portal to the companies’ existing satellite distribution, which currently serves more than 3,000 cinemas.

Theater operators can now choose to receive content over high-speed terrestrial or satellite connectivity and gain access to cloud-based content platform from Gofilex, a Dutch-based film delivery company Deluxe recently invested in.

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“Following our acquisition of 50% ownership interest in Gofilex, we are excited to bring this innovative e-delivery platform to the U.S.,” George Eyles, EVP/GM of worldwide cinema at Deluxe, said in a statement. “With thousands of cinemas still receiving hard drives, we will proactively target these locations to provide a sustainable electronic delivery solution.”

As cinemas welcome back vaccinated moviegoers, enhanced distribution Deluxe and EchoStar gives them a competitive advantage, bringing together Deluxe’s 100+ years of movie distribution experience, with EchoStar’s managed broadband services and Gofilex’s FilmVault to search, track and support real-time, time-shifted and encore events.

“We are excited to continue our longstanding relationship with Deluxe and collectively reshape the landscape for theatrical content distribution with the addition of managed, high-speed terrestrial broadband,” Ken Carroll, EVP of EchoStar, said in a statement. “Connecting theaters to high-speed broadband, we are able to support the current and future electronic delivery needs of the industry with unmatched scale and reliability.”

Satellite operator EcoStar is owned by Charlie Ergen, who also owns Dish Network.

Separately, Deluxe announced a strategic partnership with CineSend for electronic delivery of content to cinemas in Canada. The partnership joins CineSend’s existing network with Deluxe’s electronic delivery platform to create a single fulfilment solution.

“CineSend is a natural partner for Deluxe, whose goal is to offer a compelling solution for studios and distributors with global scale,” Eyles said.

Deluxe will be installing its Gofilex software onto CineSend’s CSX hardware, which is already widely deployed in cinemas across Canada.

Eric Rosset, VP of business development at CineSend, welcomed the announcement.

“Plugging our solution into a worldwide network makes perfect sense,” Rosset said in a statement. “The real winners are Hollywood studio clients whose distribution strategies are global in nature.”

CineSend will continue to provide its distribution services to film festivals, airlines, and diverse businesses with secure video streaming needs. Deluxe and CineSend will be working with the market to integrate the electronic delivery solution in Canada in the coming months.