Cinemark CEO Mark Zoradi said Thursday that the major exhibitor has started taking a “dynamic” approach to theatrical windows, negotiating release terms on a film-by-film basis in a concession to COVID-19.
Upcoming Universal releases like The Croods 2, Let Him Go and Freaky, for example, will play in Cinemark theaters, Zoradi said during the company’s third-quarter earnings call. The CEO stressed that there is no overall, formal shift in windows along the lines of the deal rival AMC struck with Universal last summer, however. That deal lets releases leave AMC theaters after as few as 17 days of release.
Zoradi said Cinemark’s approach will allow the company to make forecasts on individual films, with talks also contemplating multi-year arrangements with individual studios, though he repeatedly declined to offer further details. CFO and COO Sean Gamble said the discussions with studios pre-dated COVID-19. “This isn’t new,” he said. “Clearly, we’re factoring in the current environment.”
Croods 2 is the highest-profile example of a new studio model emerging during the coronavirus pandemic. The animated sequel is slated to debut in theaters November 25 and expected to arrive as a premium video on demand title before Christmas. Studios have largely withdrawn titles from this year’s calendar after Warner Bros saw poor domestic returns on Tenet in late summer.
Before the conference call, Cinemark reported quarterly revenue of $35 million, versus $821 million in the same quarter in 2019, and a loss of $148 million compared with a $33 million profit.
Zoradi said the company has “no plans” to consider going private as a financial response to the current challenges. He also said Cinemark is “always open” to considering theatrical bookings for films from Netflix or other streaming services. “It will always come down to the terms,” meaning both rental financials and the number of days of exclusive theatrical release. Prior to COVID-19, talks with Netflix over films like The Irishman failed to produce a deal with any major chains.
The company said has derived additional revenue from renting out auditoriums for 50,000 private screening events, with more than 600,000 people attending private watch parties.
Closures in New York and Los Angeles due to safety restrictions have been bruising for Cinemark and other major theater owners. Zoradi said 90% of Cinemark’s U.S. theaters have reopened and as to the remainder, he is “starting to see movement among regulators” as a result of lobbying by the company, the National Association of Theatre Owners and others.
The crux of the effort is pointing out key safety features of theaters. Those include enhanced air filtration and cleaning as well as ceiling heights and the reality of patrons all facing the same direction and not interacting as they would in a bar or restaurant.
Zoradi also pointed to breakthrough films in other parts of the world that have reached the other side of the COVID curve. Strong grosses by films like Demonslayer in Japan and The 800 in China — the two top global film markets along with the U.S. — offer a preview of coming attractions, he argued.
“There is a light at the end of this tunnel,” he said. “Theatrical moviegoing will rebound strongly.”
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