Major movie exhibitor Cinemark reported solid third-quarter results, with profit meeting Wall Street expectations and revenue exceeding them, and parried numerous questions about streaming’s potential threat.
CEO Mark Zoradi, a former Disney executive, reaffirmed the strategic aim to preserve the current theatrical window, which is typically about 11 weeks. Numerous features backed by streaming giants — principally Netflix’s The Irishman — had worked in vain to get Cinemark, AMC, Regal and other top circuits to compromise on the traditional window. After a limited theatrical run that kicked off November 1, the Martin Scorsese mob epic will reach Netflix on November 27.
“The biggest impact that streaming has made is the way that television viewership has shifted within the home,” Zoradi said. Movie attendance, meanwhile, has been “relatively consistent” despite billions being poured into new streaming content, including feature films. “It goes back to something we’ve seen for 25, 30 years. [Heavy consumers] of entertainment media and [theatrical moviegoers] are really the same people. We’re actually encouraged by what’s going on relative to the streaming platforms because we think it’s going to continue to provide additional content and I think there’s going to be some cross-pollination back and forth.”
As to any potential compromise, Zoradi said, “I can’t imagine us making an exception for one or two movies coming from streaming. It would, in effect, change our policy for all of our tried-and-true, significant studio partners.”
What will be more likely, the CEO said, is an effort to leverage movie theaters to gain extra attention to certain properties. He cited High School Musical, which was a hit Disney Channel show that yielded theatrical iterations. While it’s more “natural” for major theatrical blockbusters to spawn streaming versions, the reverse is a tantalizing possibility. (Coming soon: The Handmaid’s Tale: A Motion Picture?)
Earnings per share came in at 50 cents, even with Wall Street analysts’ consensus estimate but up from the 43 cents reported in the same quarter a year ago. Total revenue of $821.8 million climbed 9% from the year-ago period’s $754.2 million and exceeded estimates.
Zoradi took many questions about streaming during a 70-minute conference call with analysts. The topic has been percolating for exhibitors for some time, but have become a more top-of-mind issue for investors given not just negotiations with Netflix but a wave of big-ticket new streaming entrants. Apple just launched its Apple TV+ service, Disney will roll out Disney+ next week, with NBCUniversal and WarnerMedia on deck for next spring.
And speaking of 2020, Zoradi made bullish comments about the outlook for next year’s theatrical slate, which he called a “significant lineup.” Among the offerings he called out were a new James Bond installment, two Pixar titles, two from Marvel, plus new Wonder Woman, Fast and the Furious and Minions outings.
In 2020, he noted there are 10 more films scheduled for release than had been scheduled for 2019 at this time last year. “It’s really not a quantity game,” Zoradi said. “It’s absolutely a quality game. But as we look forward to 2020, we’re pretty optimistic about both.”