Record attendance boosts Cineplex earnings
Movie-theatre chain reports strong revenue growth while net income more than doubles
Cineplex had a blockbuster quarter helped by Star Wars and surprise hit Deadpool.
Those movies helped propel Cineplex to record attendance and strong profit and revenue growth in its recent quarter, the company reported Tuesday.
The theatre chain had 20.6 million paying customers, which helped revenue reach $379.9 million, a 30.8-per-cent increase from $289.8 million a year earlier, The Canadian Press reported.
Box-office sales accounted for $192.6 million of the total, with smaller contributions coming from food and amusement games.
Cineplex reaped an average of $9.36 per person from the box office and $5.44 per person from concession sales, both up about 5 per cent.
Net income more than doubled to $21.5 million, or 34 cents per share, from $10.5 million, or 17 cents per share, a year earlier. The company increased its dividend by 3.8 per cent to $1.62 per share on an annualized basis.
But the otherworldly film and genre nouveau superhero were only part of it.
New technology and a series of business decisions have made it possible for Cineplex to maximize its profit by streamlining movie showing and going.
“There’s fewer competitors than ever before,” says Ryerson University communications professor Paul Moore.
Cineplex has 79 per cent of Canada’s movie-theatre market. Since the early-2000s, it has acquired the Famous Players chain, AMC’s Canadian theatres and most recently 24 Empire Cinemas theatres.
Moore said the purchases have led to consolidation.
At the same time, digital projection, as opposed to film reels, has allowed Cineplex to add more screens based on customer habits.
“There’s a no longer physical reel of film needing to be distributed from place to place,” said Moore. However many theatres can screen “whatever film is the hit of the weekend” at any moment.
“They’ve rationalized their market.”
And if Star Wars was an event, the company is striving to make any movie an experience, as the options for streaming and watching anything in the comfort of your home grow.
In April, it announced 4D motion seats with effects such as mist, wind, snow and bubbles, would come to its Yonge-Dundas and VIP theatres this summer.
Its efforts come as studios, such as Disney (which owns Star Wars), have streamlined, too.
Disney leverages its acquisitions — of Marvel, Star Wars, Pixar, among others — to plan blockbusters years in advance “in a way that has never been true in the history of Hollywood,” according to Moore. It’s making more great movies than ever.”
And though studios and theatres have upped the ante, Moore says they don’t have to worry about streaming services killing the movie (theatre) star just yet.
“People that are interested in movies . . . are interested in all forms of it,” he said. “Everybody wanted to see Star Wars in a movie theatre so much that Disney arranged to have it open everywhere around the entire globe at the exact same time, so that it became the biggest movie of all time in literally no time at all.”