What’s next for movie theater operators like AMC after the ‘Barbenheimer’ money runs out?

CNN
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Final summer season, the “Barbenheimer” boom, fueled by the smash success of movies “Barbie” and “Oppenheimer,” breathed contemporary life into the movie show enterprise after months on the sting of a pandemic-induced extinction.

However now that the pink outfits and porkpie hats are off the massive display screen, issues stay concerning the well being of the film enterprise because it faces elevated competitors from streaming companies, an uneven restoration and delays brought on by final 12 months’s Hollywood actors’ and writers’ strikes.

AMC Leisure, usually seen as a bellwether for the business because the world’s largest movie show chain, just isn’t proof against these challenges.

To help its restoration, AMC is diversifying its in-theater choices and slicing extra offers with musicians for live performance movies. It’s juicing ticket costs by including higher-end viewing experiences and shutting, renovating or relocating theaters. Searching for new sources of income, AMC is launching its personal branded concession-stand snacks and merchandise, together with collectible popcorn buckets, for $25 apiece.

The corporate is ready to report its fourth-quarter earnings Wednesday after the closing bell, however traders appear cautious; the inventory is buying and selling below $5 per share, simply above its all-time low.

Few firms have discovered themselves within the middle of cultural moments like AMC has in recent times. Covid hobbled it with debt. In 2021, “meme stock” merchants adopted, then deserted, its shares, inflicting wild swings in worth. Final summer season and fall’s field workplace, fueled by “Barbenheimer,” delivered the very best week ever for the corporate based in 1920 — and an unique deal to display screen Taylor Swift’s ultra-popular “Period’s Tour” live performance film adopted shortly after. Then, the Hollywood strikes shelved, buried or delayed dozens of movies.

AMC didn’t reply to CNN’s request for remark.

However AMC’s CEO Adam Aron hinted on the corporate’s November earnings name that the theater chain would look to signal offers with extra musicians after AMC stated Taylor Swift and Beyoncé live performance movie showings have been an amazing success.

“This isn’t only a one-time factor in 2023. We imagine that we’ll have a number of extra live performance movie merchandise in 2024 and 2025. We intend to be working with among the most recognized and most cherished bodily artists the world has ever recognized,” Aron stated. “For these of you who don’t assume that this may show to be transformational for AMC, watch this house.”

Updates to AMC’s technique come amid the backdrop of a disappointing field workplace to date this 12 months.

Home field workplace income (AMC’s greatest revenue stream) between January 1 and February 25 of this 12 months is monitoring 18% decrease than it was throughout the identical interval final 12 months, in accordance with Comscore.

“The primary two months of the 12 months have been fairly tough,” stated Paul Dergarabedian, a senior media analyst at Comscore.

Whereas field workplace revenues haven’t but recovered to pre-pandemic ranges, till this 12 months, that they had been on an upward trajectory. Nevertheless, Eric Wold, an AMC analyst at B. Riley, warned in a January observe to shoppers that 2024 may see a backslide. Wold lowered his projection for the home field workplace to $8.6 billion, down from $8.9 billion earned in 2023.

One cause for the slowdown may be altering viewers tastes. Superhero motion pictures, which have historically been surefire attracts, have had spotty performances currently. A current instance, Sony’s “Madame Internet,” which value a reported $80 million to make, according to The Hollywood Reporter, has solely made $35 million to date on the home field workplace.

Dergarabedian stated studios could also be gradual to catch on to what moviegoers need to see.

“There’s at all times a delay between the altering public style and for studios to meet up with that and soak up that,” he stated.

Nevertheless, Dergarabedian stated he’s optimistic that the extremely anticipated motion pictures like “Dune: Half Two,” which is ready to be launched within the US cinemas on March 1st, and “Sonic the Hedgehog 3” and “Deadpool & Wolverine” motion pictures slated for later this 12 months, will assist the field workplace choose up. (“Dune” and “Barbie” have been distributed by Warner Bros, which shares the identical dad or mum firm of CNN)

“When you might have audiences enthusiastic about movies which are upcoming on the calendar on a constant foundation, that’s what drives the field workplace,” he stated.

Regardless of the field workplace slowdown this 12 months, AMC discovered itself on the middle of one more viral second earlier this month.

The corporate’s “Dune: Half Two”-themed popcorn bucket, topped with the gaping mouth of a sandworm, caught the eye (and derision) of the web — and “Saturday Evening Reside” — for its uncommon form.

Earlier than “Dune’s” providing, AMC was providing a pink “Barbie” Corvette-shaped popcorn receptacle and a “Quick X” bucket shaped like a 1970 Dodge Charger.

The technique could also be paying off. AMC reported that home theater attendance within the third quarter was down 16% in comparison with third quarter of 2019 — but earnings are up.

“Moviegoers are simply more and more going to see motion pictures in premium massive format screens, they’re more and more shopping for a bigger basket of concessions and a better ticket value,” stated Alicia Reese, an AMC analyst at Wedbush.

AMC has the biggest footprint of premium format screens within the business, like IMAX and Dolby Cinema, which boast larger sound and movie high quality than the common film display screen. Tickets for these experiences are extra pricey.

“A part of the explanation persons are having fun with going again to theaters is the expertise theater operators are creating for them,” stated Michael O’Leary the president and CEO of the Nationwide Affiliation of Theatre House owners commerce group. “The individuals I characterize are consistently being requested to up their recreation and their showmanship.”