The No. 1 theater chain says it won’t show Paramount’s Paranormal Activity: The Ghost Dimension (to be released October 23) and Scouts Guide To The Zombie Apocalypse (October 30) — rejecting the studio’s experiment with AMC Entertainment that might cut into the 90-day period when exhibitors want exclusivity.
Paramount said this month it will put the films on digital home video outlets 17 days after each dips below 300 domestic theaters. At that point, exhibitors that show the films will receive an undisclosed percentage of the studio’s digital revenues for the period ending 90 days after the movies were released.
“We appreciate Paramount’s willingness to seek exhibitor input and provide for exhibitor participation in certain ancillary revenues as they evaluate alternative distribution models,” Regal CEO Amy Miles told analysts today. “However the parameters of the current proposal, both economic and structural, simply do not make sense for us given the potential risks to the long term health of our business. As has been the case historically, we will utilize our screens to exhibit films distributed using a traditional distribution model that respects the existing theatrical window.”
She added Regal would be “open to any idea … that we think has the potential to grow the overall pie” as long as it doesn’t shortchange theaters. That’s “clearly not the case with the Paramount proposal,” Miles said, adding that the current system “works” and theaters “do require a minimum window.” Regal’s study of earlier releases showed that, with Paramount’s parameters, “several films would have had an accelerated window.”
On Wednesday, AMC chief Gerry Lopez defended its agreement with Paramount, saying that exhibitors should help studios find ways to finance additional productions. “We need more films,” he said. “To not experiment, to not be willing to listen, to not be willing to strike a new arrangement that financially could be very lucrative. … We just don’t think that was smart.”
Regal disclosed its opposition to the Paramount experiment after releasing its Q2 earnings. The exhibition chain generated $53.3 million in net income, up nearly 58% vs the period last year, on revenues of $862.8 million, up 12%. The top line was well ahead of the $847.5 million that analysts expected. Earnings at 38 cents a share also beat the consensus prediction of 35 cents.
Regal says it set records for average ticket price (at $9.62, up 4.3%) and average concessions per patron (at $4.19, up 10.6%). “We are also encouraged by the early third quarter box office results and remain optimistic about the prospects for the remainder of the year,” Miles says.