The movie theater industry is set for further growth, despite increasing competition with online, on-demand and at-home media consumption.
The entertainment business has been undergoing massive upheaval recently, with streaming video services such as Netflix (Nasdaq: NFLX) and Amazon Prime (Nasdaq: AMZN) generally stealing younger generations away from the movie theater experience.
In its third-quarter of 2018 earnings, Netflix, for example, boasted a 31% year-on-year subscriber gain to nearly 7.0m – a new Q3 record. The company had also trounced market expectations, with earnings of US$0.89 per share compared to less than US$0.70 EPS anticipated, while revenues were as-expected at US$4bn.
However, while internet-based firms such as Netflix, Amazon Prime, and Hulu have infiltrated living rooms and mobile phones, they have not appeared to deter moviegoers from buying tickets at traditional box offices.
Recent blockbuster films, along with support from a firmer U.S. economy, have spurred an influx of crowds to the theater.
AMC Entertainment (NYSE: AMC), the largest movie exhibition company in the U.S., said it set a new all-time quarterly box office record in Q2’18, generating US$3.33bn, reflecting growth of 22.7% compared to the same year-ago quarter.
The company noted that total U.S. attendance rose 20.6% year-on-year in Q2 to almost 70m, despite a rise of nearly 2% in the average ticket price. Furthermore, Q2’18 total U.S. revenues spiked 24.6% to about $1.13bn, comprised of about 23% in increased admissions revenue, 23% rise in food and beverage sales, and a 59.3% climb in other theatre intake.
More recently, AMC said it had “massive consumer response” to its packaged/discount promotional programs AMC Stubs and AMC Stubs A-List. The firm noted that AMC Stubs A-List will cross more than 500,000 enrolled members in the very near-term, eclipsing its membership expectations for the end of the first full year in 4 1/2 months.
