Going wide into the Canadian market with new 3D screens helped Cineplex Galaxy Income Fund get through a summer season of underwhelming Hollywood releases.
Cineplex Galaxy on Thursday saw its earnings for the three months to June 30 fall 12.5% to $17.4 million, on revenue down 2% to $243.7 million, this after going gangbusters through the economic downturn with high-profile Hollywood releases like Avatar 3D.
Poorly performing Hollywood studio releases forced total attendance at Cineplex locations countrywide to be down year-on-year by 8.2% to 16.7 million patrons, the company reported.
However, media revenues for the company were up 18.6%, rising to $19.4 million from $16.3 million in the same period of 2009. Although only a fraction of the company’s overall revenues, the increase signals a significant recovery for the company, ad-wise, after the recession, when it saw full-motion and digital pre-show sales slump. Automotive is up over the same period last year, as well as telecommunications, the company reported.
Cineplex has aggressively super-sized the movie-going experience for Canadians, enabling the circuit to charge premium ticket prices for 3D movies, and therefore underpin its bottom line when its pipeline of Hollywood releases disappoint.
The company busily installed 3D screens in the run-up to Avatar 3D, and did 28% of the North American 3D business for the James Cameron’s sci-fi epic, against a traditional 8% to 10% Canadian market share for Hollywood releases.
Since then, it has installed 3D screens in major markets such as Toronto, Montreal, Vancouver and Calgary, and is putting in as many as six 3D screens in any one multiplex. The result is, during the latest quarter when underperforming titles like Lionsgate’s Killers and Fox’s A-Team steered Canadians away from the local multiplex, Cineplex Galaxy picked up the slack with fat ticket prices for Imax 3D titles.
What’s more, the percentage of box office revenues earned from the 3D and Imax titles comprised 25.8% of Cineplex’s total box office results in the second quarter, up from 13.6% for the same period of 2009.
From Playback Daily, with files from Etan Vlessing
