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Canadian exhibition giant Cineplex swung to a third quarter profit as overall revenues rose on higher theater attendance.
Cineplex posted a profit of $30.85 million, compared to a year-earlier loss of $33.5 million, on overall revenues rising 35.7 percent to $339.9 million. Overall box office during the third quarter came to $124.8 million, up 32.5 percent from $94 million in year-ago box office revenues.
The Canadian exhibition giant saw its biggest box office in July, as Top Gun: Maverick played on its screens nationwide and overall box office reached 85 percent of its pre-pandemic 2019 performance. “These results were achieved despite a widely expected and thankfully temporary limited supply of holidays content in the second half of the quarter,” Cineplex CEO Ellis Jacob told analysts during a morning call.
Jacob pointed to Cineplex striking a deal with Netflix to give a theatrical release for Glass Onion: A Knives Out Mystery as evidence that streaming platforms long focused on growing their subscriber bases were backtracking to look to the local multiplex to promote their upcoming movie offerings. “Traditional and non-traditional studios are now forming a heightened appreciation for the role of a theatrical release and increasing awareness of and value for content prior to its launch on a streaming platform,” he argued.
Jacob added Netflix has recognized it needs to get its subscribers more aware of its movies before they show up on the streaming platform. “It’s a great marketing tool for them and a great opportunity for our guests to come to the theaters and see the movie on the big screen,” he said.
Jacob predicted more streaming product in movie theaters. “What you’re going to see is the move towards a window that may not be as long as some other windows, but it’s basically a cost vs reward perspective that one has to look at,” he added.
Jacob told The Hollywood Reporter that Cineplex was in talks with other online players, including Amazon and Apple, about putting their own movies on his theater screens. He added much depended on the individual movie titles and the commercial terms for any deals to be hammered out.
“But it does give us the option for much more content as we move forward,” Jacob added. He also pointed to Warner Bros. Discovery CEO David Zaslav going all in on theatrical releases after Warner Bros. doubled down on streaming by releasing the studio’s entire 2021 film slate on HBO Max at the same time as the theatrical releases amid the COVID pandemic.
“They’ve made a commitment to the theatrical business, and to me that’s a validation of the old system that worked extremely well. And all of the ancillary values are usually driven by how well the theatrical window does,” Jacob argued.
The Cineplex boss also discussed the $1.2 billion judgement the movie theater chain has outstanding against Regal owner Cineworld over its collapsed merger deal. Jacob said Cineworld’s U.S. bankruptcy proceedings had put his company’s pursuit of any payout on a Dec. 2021 judgement from a Canadian court on hold.
“We are on the sidelines and waiting to see with our advisors any opportunity that may be available,” Jacob insisted as Cineworld looks to cash in on its judgement against Cineworld.
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