Last summer, the “Barbenheimer” boom, fueled by the smash success of films “Barbie” and “Oppenheimer,” breathed fresh life into the movie theater business after months on the edge of a pandemic-induced extinction.
But now that the pink outfits and porkpie hats are off the big screen, concerns remain about the health of the movie business as it faces increased competition from streaming services, an uneven recovery and delays caused by last year’s Hollywood actors’ and writers’ strikes.
AMC Entertainment, often viewed as a bellwether for the industry as the world’s largest movie theater chain, is not immune to those challenges.
To aid its recovery, AMC is diversifying its in-theater offerings and cutting more deals with musicians for concert films. It’s juicing ticket prices by adding higher-end viewing experiences and closing, renovating or relocating theaters. Seeking new sources of revenue, AMC is launching its own branded concession-stand snacks and merchandise, including collectible popcorn buckets, for $25 apiece.
The company is set to report its fourth-quarter earnings Wednesday after the closing bell, but investors seem wary; the stock is trading under $5 per share, just above its all-time low.
Few companies have found themselves in the center of cultural moments like AMC has in recent years. Covid hobbled it with debt. In 2021, “meme stock” traders adopted, then abandoned, its shares, causing wild swings in value. Last summer and fall’s box office, fueled by “Barbenheimer,” delivered the best week ever for the company founded in 1920 — and an exclusive deal to screen Taylor Swift’s ultra-popular “Era’s Tour” concert movie followed shortly after. Then, the Hollywood strikes shelved, buried or delayed dozens of films.
AMC did not respond to CNN’s request for comment.
But AMC’s CEO Adam Aron hinted on the company’s November earnings call that the theater chain would look to sign deals with more musicians after AMC said Taylor Swift and Beyoncé concert film showings were a tremendous success.
“This is not just a one-time thing in 2023. We believe that we will have several more concert film products in 2024 and 2025. We intend to be working with some of the most known and most loved physical artists the world has ever known,” Aron said. “For those of you who don’t think that this will prove to be transformational for AMC, watch this space.”
Updates to AMC’s strategy come amid the backdrop of a disappointing box office so far this year.
Domestic box office revenue (AMC’s biggest income stream) between January 1 and February 25 of this year is tracking 18% lower than it was during the same period last year, according to Comscore.
“The first two months of the year have been pretty rough,” said Paul Dergarabedian, a senior media analyst at Comscore.
While box office revenues have not yet recovered to pre-pandemic levels, until this year, they had been on an upward trajectory. However, Eric Wold, an AMC analyst at B. Riley, warned in a January note to clients that 2024 could see a backslide. Wold lowered his projection for the domestic box office to $8.6 billion, down from $8.9 billion earned in 2023.
One reason for the slowdown might be changing audience tastes. Superhero movies, which have traditionally been surefire draws, have had spotty performances lately. A recent example, Sony’s “Madame Web,” which cost a reported $80 million to make, according to The Hollywood Reporter, has only made $35 million so far at the domestic box office.
Dergarabedian said studios may be slow to catch on to what moviegoers want to see.
“There’s always a delay between the changing public taste and for studios to catch up with that and absorb that,” he said.
However, Dergarabedian said he’s optimistic that the highly anticipated movies like “Dune: Part Two,” which is set to be released in the US cinemas on March 1st, and “Sonic the Hedgehog 3” and “Deadpool & Wolverine” movies slated for later this year, will help the box office pick up. (“Dune” and “Barbie” were distributed by Warner Bros, which shares the same parent company of CNN)
“When you have audiences excited about films that are upcoming on the calendar on a consistent basis, that’s what drives the box office,” he said.
Despite the box office slowdown this year, AMC found itself at the center of yet another viral moment earlier this month.
The company’s “Dune: Part Two”-themed popcorn bucket, topped with the gaping mouth of a sandworm, caught the attention (and derision) of the internet — and “Saturday Night Live” — for its unusual shape.
Before “Dune’s” offering, AMC was offering a pink “Barbie” Corvette-shaped popcorn receptacle and a “Fast X” bucket shaped like a 1970 Dodge Charger.
The strategy may be paying off. AMC reported that domestic theater attendance in the third quarter was down 16% compared to third quarter of 2019 — yet profits are up.
“Moviegoers are just increasingly going to see movies in premium large format screens, they’re increasingly buying a larger basket of concessions and a higher ticket price,” said Alicia Reese, an AMC analyst at Wedbush.
AMC has the largest footprint of premium format screens in the industry, like IMAX and Dolby Cinema, which boast higher sound and picture quality than the average movie screen. Tickets for those experiences are more costly.
“Part of the reason people are enjoying going back to theaters is the experience theater operators are creating for them,” said Michael O’Leary the president and CEO of the National Association of Theatre Owners trade group. “The people I represent are constantly being asked to up their game and their showmanship.”
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