What will movie theater operators like AMC do next after the “Balbenheimer” funding runs out?

CNN
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Last summer's “Barbenheimer” boom, fueled by the blockbuster hits of “Barbie” and “Oppenheimer,” breathed new life into a movie theater business that had been in danger of being wiped out by the pandemic for months.

But now that the pink costume and porkpie hat have disappeared from the screen, Concerns about the health of the movie business remain, as it faces increased competition from streaming services, an uneven recovery and delays caused by last year's Hollywood actors and writers' strike.

AMC Entertainment, the world's largest movie theater chain and often seen as an industry leader, is not immune to these challenges.

To aid recovery, AMC is diversifying and reducing in-theater services. Contracts for concert films with musicians have increased. They are increasing ticket prices by adding premium viewing experiences and closing, renovating, or relocating theaters. Seeking new revenue streams, AMC is launching its own branded concession stand snacks and merchandise, including collectible popcorn buckets. $25 per piece.

The company is scheduled to report fourth-quarter results after the closing bell on Wednesday, but investors appear cautious. The stock is trading at less than $5 per share. It was slightly above the all-time low.

Few companies have been at the center of a cultural moment in recent years like AMC. Debt has become a hindrance due to the impact of the new coronavirus. In 2021, “meme stock” traders adopted and then abandoned the company's stock, causing wild price swings. Last summer and fall box office sales, fueled by “Babenheimer,” led to the best week ever for the company, which was founded in 1920. Shortly after, an exclusive deal was signed to screen Taylor Swift's wildly popular concert film, Ella's Tour. Then, dozens of films were postponed, buried, or postponed due to the Hollywood strike.

AMC did not respond to CNN's request for comment.

However, AMC CEO Adam Aron said at the company's November earnings conference that the theaters will be closed to the public after AMC announced that the Taylor Swift and Beyoncé concert film screening was a huge success. He hinted that the chain is considering signing more musicians.

“This is not just a one-time thing in 2023. We believe there will be several more concert film products in 2024 and 2025. I'm going to work with some of the physical artists that are out there,''' Aaron said. “If you don’t think this is going to be transformative for AMC, watch this space.”

AMC's strategic update comes on the back of disappointing box office results so far this year.

Domestic According to ComScore, box office revenue (AMC's biggest source of revenue) from January 1 to February 25 of this year was down 18% compared to the same period last year.

“The first two months of this year have been pretty tough,” said Paul Dergarabedian, senior media analyst at Comscore.

Although box office revenues have not yet recovered to pre-pandemic levels, they were on an upward trajectory until this year. But B. Riley AMC analyst Eric Wald warned in a note to clients in January that a reversal could occur in 2024. Wald revised down his forecast for domestic box office revenue from $8.9 billion in 2023 to $8.6 billion.

One reason for the downturn could be changing audience tastes. Superhero movies have traditionally been reliably popular, but lately they've had spotty box office success. A recent example is Sony's Madame Web, which reportedly cost $80 million to make, according to The Hollywood Reporter, but has so far only grossed $35 million at the domestic box office.

Dergarabedian said studios may be slow to understand what moviegoers want to see.

“There's always a lag between changing public tastes and studios catching up and absorbing them,” he says.

However, Mr. Dergarabedian said that other films such as “Dune: Part 2,” which is scheduled to be released in U.S. theaters on March 1st, and “Sonic the Hedgehog 3” and “Deadpool & Wolverine,” which are scheduled to be released later, are He said he is optimistic that the highly anticipated work will be released. It will help increase box office revenue this year. (“Dune'' and “Barbie'' were distributed by Warner Bros., the same parent company as CNN.)

“If you get audiences excited about the movies that are regularly scheduled to be released on the calendar, that's what drives box office revenue,” he says.

Despite this year's box office flop, AMC found itself at the center of yet another buzz earlier this month.

The company's “Dune: Part 2”-themed popcorn buckets are topped with a sandworm's gaping mouth, and the unusual shape caught the attention (and ridicule) of the internet and “Saturday Night Live.” I did.

Before the release of Dune products, AMC offered popcorn containers shaped like pink Barbie Corvettes and FastX buckets shaped like 1970 Dodge Chargers.

That strategy may be working. AMC reported that domestic theater attendance in the third quarter fell 16% compared to the third quarter of 2019, but profits increased.

“Movie fans are increasingly watching movies on premium large-format screens, and more people are purchasing larger discounts and higher ticket prices,” said Alicia Reese, AMC analyst at Wedbush. Ta.

AMC has the industry's largest footprint of premium format screens, including IMAX and Dolby Cinema, which offer better sound and picture quality than the average movie screen. Tickets for such experiences are expensive.

“One of the reasons people are enjoying going to movie theaters again is the experience that theater owners are creating for them,” said Roberts, trade group president and CEO of the National Association of Theater Owners. CEO Michael O'Leary said. “The people I represent are constantly challenged to up their game and showmanship.”