Cinemark Theater Subscription Service Movie Club Hits 800,000 Members
CEO Mark Zoradi cites a strong domestic box office "and continued strength in our global food and beverage sales" as he unveiled record quarterly earnings.
Cinema giant Cinemark Holdings on Friday said it has reached the 800,000-member milestone for its Movie Club cinema ticket subscription program, with around 2,300 members per theater.
Movie Club is also delivering around 14 percent of the circuit's box office, Cinemark told analysts during a morning call after unveiling its second quarter financial results. That compared with the Movie Club subscription service having around 650,000 members at the end of the first quarter of 2019, with around 2,000 members per theater and Movie Club delivering about 12 percent of the movie chain's box office.
"We see Movie Club along with other key initiatives as a meaningful contributor to our success," Cinemark CEO Mark Zoradi told analysts, while arguing the movie subscription service has much runway to continuing growing as it targets film-goers that visit the multiplex from six to 12 times each year.
He added customer surveys revealed around 75 percent of Movie Club members report they attend movies more frequently since joining the subscription service, and visit the concession stand more often and buy more products.
And Martin Scorsese's The Irishman for Netflix could play in Cinemark theaters, but only if the video streaming giant plays by Hollywood's rules for windowing. "We would welcome to play The Irishman. And we've stated that in a congenial way multiple times to Netflix," Zoradi told analysts.
"The only thing we ask is they play from a window standpoint consistent with our major suppliers, whether that be Disney, Warner Bros./ATT or Comcast/Universal. To the extent they're willing to do that, we welcome them in all of our theaters," he added. Netflix put Alfonso Cuarón’s Roma in movie theaters to tee it up as a possible Academy Award best picture winner and is expected to do the same with Scorsese's The Irishman.
Cinemark also Friday reported record earnings and other financials for its second quarter, driven by a strong U.S. box office, a rebound in international attendance and a 13 percent concession revenue increase.
Cinemark posted second-quarter earnings of $101 million, or 86 cents per share, which it said was a company record and compared with $82.1 million in the year-ago period, or 70 cents. Adjusted earnings before interest, taxes, depreciation and amortization, another profitability metric, increased 10.4 percent to a record $244.7 million.
Cinemark's quarterly revenue rose 7.7 percent to a company record $957.8 million. Admissions revenue increased 2.4 percent to $521.1 million, with concession revenue growing 13.1 percent to $345.3 million. The company's cost of operations increased 5 percent to $801.7 million.
Cinemark said second-quarter attendance rose 5.0 percent to 80.2 million patrons, its average ticket price hit $6.50 for the quarter, and concession revenue per patron climbed 7.7 percent to $4.31.
Key box-office performers of the second quarter included Avengers: Endgame and Toy Story 4, both of which performed well in Latin America after that regional market showed weakness for the U.S.-based circuit in earlier quarters due to a soft Hollywood film slate.
Zoradi was bullish on the prospects for Hollywood box office for the rest of 2019, after North American revenue reached a record $11.85 billion in ticket sales last year. "We remain enthusiastic about the upcoming film lineup, looking ahead to the rest of the year," he told analysts.
Zoradi was also asked whether Hollywood studios produced too many movie sequels. "I don't think there's too many sequels. It's a matter of what the audience wants, and what they're willing to get out of their home for and pay their $10 to $12 to see," he argued.
Zoradi pointed to Avengers: Endgame from the Marvel cinematic universe and Toy Story 4 as tentpoles that outperformed at the box office. "Those were highly satisfying movies," he told analysts.
For the current quarter, Zoradi pointed to new movies like Once Upon a Time in Hollywood that launched well and the Lion King remake as proof the major studios can continue to draw audiences to the multiplex. "Whether that's a new movie or a sequel, I don't think it really matters," Zoradi argued.
Aug. 2 6:30 a.m. Updated with comments by Cinemark execs made during an analyst call.