A strong line-up of summer blockbusters helped Cineplex Galaxy Income Fund turn out higher attendance and record revenues at its theatres in the third quarter, but the narrowing of the theatrical-to-DVD window has its executives on high alert.
“We are very concerned about the theatrical window,” said Cineplex Entertainment president and CEO Ellis Jacob.
“It’s as important to us as any of the U.S. exhibitors.”
Jacob added his voice to the growing number of theatre owners worried that studios are ignoring their pleas to stop rushing movies to DVD. Generally, both sides have agreed to a four-month exclusivity window for theatrical releases.
Last week, Paramount vaulted that agreement when G.I. Joe: Rise of the Cobra landed on DVD hardly three months after it hit movie screens. The studio has said it was an exceptional case tied into the promotion of Hasbro’s G.I. Joe toys for the holiday season.
However, Sony planned to close the release window even further by releasing Michael Jackson’s This is It on DVD in time for Christmas, less than two months after its theatrical debut. Exhibitors protested, and got Sony to cancel those plans until the New Year.
The changes mark a major shakeup in the entertainment industry as studios look for new ways to combat eroding DVD sales, and exhibitors say that it’s putting their profits in jeopardy.
“If the release between the theatrical and the DVD is so short, our concern is that people will not go as frequently to the movies, and they will wait for the DVD release,” Jacob said.
“It’s not just not a Cineplex problem, it becomes an industry issue.”
However, if the booming third-quarter results are any sign, Cineplex doesn’t have much to worry about for now.
On Tuesday, the company said its box-office sales were the highest-ever box office revenue for a given quarter at $155.9 million. The increase was attributed to a greater variety of films, and growing audience numbers.
Cineplex also reported higher net income of $20.4 million for the third quarter, up from year-ago profit of $18.4 million.
Quarterly revenue totalled $257.5 million, up from $239.1 million last year, which met a consensus estimate of four analysts compiled by Thomson Reuters.
Cineplex said it recorded theatre attendance growth of nearly 5% during the quarter, as well as box office per patron growth of 3% and concession per patron growth of 4.5%.
“We attribute this growth primarily to a greater breadth of film product,” said Jacob.
During the period, the company screened 3D features like Ice Age: Dawn of the Dinosaurs and IMAX products like Harry Potter and the Half Blood Prince.
Cineplex added that select ticket price increases implemented in November last year also helped the increase in revenue, while concession revenues were also up 9% from last year.
“These results are a testament to our management’s philosophy and commitment in focus on growing the business through a variety of means including our Scene loyalty program, alternative programming, concession initiatives and our media business,” said Jacob.
