Summer blockbusters drive US box office revival
In an Interview with Third Bridge Forum, the specialist said US theatres have witnessed an “uptick in business” since early March. Current box office revenue is running between 55-60% of the same period in 2019, but the specialist expects the slew of upcoming blockbusters such as Doctor Strange, Top Gun: Maverick and Jurassic World to push revenue closer to 70% by the end of the year.
We were told that attendance and box office figures at Regal Entertainment, a division of Cineworld, are now mirroring the rest of the industry. The specialist said in 2019, Regal’s box office total was USD 2bn and they expect it to reach USD 1.3bn-1.4bn by the end of the year. However, having remained closed during the pandemic for longer than its competitors, Regal’s box office takings are expected to be approximately 31% lower than AMC Entertainment.
The specialist told us Regal’s average ticket price is USD 12, with IMAX and other large format tickets able to command an extra USD 2-2.25. Despite the rebound in footfall, the specialist does not believe cinemas will be able to charge more over the next 6-12 months as the cost of living crisis grows. One opportunity to increase spend per person could come from a more comprehensive food and beverage service, according to the specialist. Serving alcohol would be a “huge ticket” to increase spending, although they said this is not a new concept.
Cineworld’s “aggressive” CAPEX programme to refurbish 25-50 Regal theatres slowed during the pandemic, we were told. But the specialist expects it to resume given the “significant” benefits the programme has brought to some of Regal’s “top-performing” theatres. While they said it may take time for Regal to recoup its investment, they were confident that “selective” targeting of theatres would be commercially “worthwhile”.
However, Cineworld’s future refurbishment plans could be scuppered by its USD 1.24bn litigation with Cineplex. According to the specialist, the ruling in Cineplex’s favour is a “significant challenge” for Regal that could cause the company to restructure or file for bankruptcy. The specialist concluded that no one yet knows how this situation will conclude, but they expect the impact to be “significant”.
To access all the human insights in Third Bridge Forum’s Cineworld – US revenue & profitability opportunities Interview, click here to view the full transcript.
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