People have been flocking to movie theaters this summer, some to relive the nostalgia of watching Tom Cruise fly in a fighter jet or others donning formal clothes to take part in a quirky trend that became known as the “Gentleminions.”
Cruises Top Gun: Maverick and Minions: The Rise of Gruz are just two of a handful of summer blockbusters giving the pandemic-decimated industry new life.
Plano-based movie theater chain Cinemark’s quarterly results Friday validated that the bounce-back is building. The company reported revenue of $744 million for the April through June period, marking its highest quarterly revenue since before the COVID-19 pandemic began. That’s a stunning turnaround from its pandemic low of $8.9 million during the same three-month period in 2020.
CEO and president Sean Gamble credited the strong revenue growth to “continued improvement in consumer sentiment,” and a “more consistent release cadence of compelling new films.”
“Cinemark fully delivered on this sustained recovery in the second quarter,” Gamble said in a statement.
Yet the company that operates 521 theaters in the US, South America and Central America still posted a net loss of $73.4 million for the quarter, reducing its red ink from a year ago by roughly half. Cinemark’s subscription service, Movie Club, grew and hit the 1-million subscribers mark during the most recent quarter — 10% more than it had prior to COVID-19.
Cinemark welcomed 34 million customers throughout the quarter, which was also a high since the onset of the pandemic. The company extended its hours as a result, but is still not back to 2019 operating levels, said chief financial officer Melissa Hayes Thomas.
The big question is if the industry can ride the summer momentum through the rest of 2022.
“It seems like it’s coming back to life. This year has been stronger than might have been anticipated given the last couple of years,” said Alisa Perren, co-director of the University of Texas at Austin’s Center for Entertainment and Media Industries.
Gamble acknowledged headwinds ahead from a lack of upcoming releases, but the company said customers feel comfortable returning to theaters. In a survey of moviegoers by the National Research Group, 88% responded that they were “very or somewhat comfortable” going back to the theaters, and box office numbers across the industry are on the road to recovery.
North Dallas resident Sandy Akright is part of the catalyst for the strong quarter. Top Gun: Maverick drew her back to the theaters with her 13-year-old grandson, Jack, and his 9-year-old brother, Caleb, at the end of June and now she has been back four times. Elvis, Where the Crawdads Sing and Thor: Love and Thunder are the other three movies she has seen.
In a summer as hot as this one, it’s been a cool way for Akright to spend time with her grandkids. But COVID-19 has changed how she approaches it. She and her husband try to go to a movie during the week or on the second weekend that a film comes out, and pick earlier showtimes to avoid crowds.
Perren thinks a bigger factor at play in the return to theaters is the battle between streaming and the big screen, especially with how soon movies now go to streaming services. Being among the first to see a new release, and taking it in on a large screen, are still compelling pulls back to theaters, but the pandemic normalized at-home viewing and some are reluctant to change back.
“I personally think you miss a lot with the action, especially the action kind of movies,” Akright said of the theater versus streaming experience.
That discussion is occurring on the studio side as well. Warner Bros. Discovery is making a 180-degree turn from its previous approach to bringing movies to market. The media giant is now emphasizing releasing big-budget movies exclusively in theaters first, which is a stark contrast to the strategy under former WarnerMedia CEO Jason Kilar, who opted to release blockbuster films such as Wonder Woman: 1984 simultaneously on HBO Max and in theaters.
“This idea of expensive films going direct-to-streaming, we cannot find an economic case for it. We can’t find an economic value for it. And so we’re making a strategic shift,” said David Zaslav, president, director and CEO of Warner Bros. Discovery, during Thursday’s earnings call.
Elvis and Jurassic World: Dominion are among other films being credited for this year’s domestic box office surpassing those of 2020 and 2021. July is the first month since December 2019 to gross over $1 billion at the domestic box office, according to the National Research Group, and it was the closest any month has come to meeting its pre-pandemic average sales, getting to 91% of the 2015-19 average.
Perren and Gamble both mentioned that the wide range of movies performing well in the box office is a major plus for the industry. There were concerns about how much market space there was for films outside of low-budget horror, kids movies and intellectual property mood from the comic book, fantasy and science fiction genres.
“Our industry is most closely tied to the strength and volume of film content and not necessarily ebbs and flows in the economy,” Gamble said on the earnings call.
There’s still a way for box office sales to go back to where they were before 2020. From 2010-19, box office sales topped $10 billion on an annual basis and over 800 movies were released each year dating back to 2012.
Only 1,178 films have come out since 2020, and this year’s total box office sales are at $4.8 billion.
At the midway point of this year, Cinemark’s revenue from tickets and concessions stands at $1.2 billion — a nearly 195% increase over the same six-month period last year. More than 85 million people have watched movies in its theaters, paying an average ticket price of $7.26 and spending an additional $5.39 per person on concessions.