Streamers Gain Business Savvy, Movie Theaters Contemplate Normality

Following up on its Universal Pictures deal, in November 2020, theater owner Cinemarkhas made five more movie studio deals for theatrical distribution.

On the surface, this seems like a return-to-normal approach. But digging deeper, it’s not all that clear.

One certainty: big TV-centric media companies are getting TV and movie content more quickly for their high-profile new streaming platforms.

Cinemark's deal with Universal last year allowed the studio to take underperforming movies and put them on premium video-on-demand platforms 17 days after they open in theaters.

And the good news for the chain: Films generating at least $50 million in opening weekend ticket sales, among all U.S. theaters, can play exclusively for a longer period -- 31 days, or five full weekends.

Well, that’s what move chains like to see -- box-office hits, especially those summer/holiday blockbuster films -- grabbing big crowds and revenue. The sophisticated business phrase in the film business: Getting butts in seats.



Right now, the still pandemic-affected trends aren’t clear. While the No. 1 theater chain, AMC Entertainment, says 99% of its theaters are currently open, those venues have limited sitting. Since the start of the year, AMC says it has had 7 million paying moviegoers at its theaters.

Losses are still big. AMC reported a net loss of $567 million and just $148 million in revenue for the first three months of 2020. The fourth-quarter 2020 had a $946.1 million net loss for the company.

While Cinemark hasn’t disclosed film windowing/exclusive deal points to date, we know national-wide premium streaming platforms have caught the attention of all entertainment consumers. Studios making movie chain deals recognize this.

At the same time, analysts expect those high-volume younger moviegoers to resume their usual movie-going behavior.

WarnerMedia’s “Godzilla vs. Kong” was a recent example. It pulled in a decent $48.5 million for its opening weekend in April amid a pandemic-affected media environment. At the same time, the movie was available on HBO Max.

More adult films and niche movies -- commonly modest-revenue producing films -- look to be headed to streamers more quickly, with perhaps fewer making it into theaters.

Even with the continued effort around studios to run big blockbuster movies in theaters, the trend is for all five major studios to work in somewhat shorter theatrical windows.

Consumers need lots of fresh-er content -- quicker. High-profile  movie content will be a key attraction cycling in faster. Rinse, repeat and spin.

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