Top Gun: Maverick and a Diverse Slate Strengthen Second Quarter Results

Courtesy Paramount Pictures

On the strength of tentpole titles and the variety of films returning to theaters across the board, publicly owned exhibition circuits reported favorable results in their Q2 2022 earnings calls, boasting significant increases over Q2 of 2021. Cineplex’s Ellis Jacob said, “It is no longer a question of what the customers want. They are back from every cohort and for all genres of films.”

AMC, the largest exhibitor in the United States and the world, reported Q2 revenue of $1.17 billion, more than 2.5x the $445M revenue in Q2 of 2021 and almost 50 percent ahead of the revenue AMC recorded in the first quarter of this year. Cinemark reported total revenue of $744.1M, marking the company’s highest quarterly performance since the onset of the pandemic. At midwest circuit Marcus Theatres, consolidated revenues more than doubled over 2021, growing from $92 million last year to over $198 million this year. On the circuit-agnostic front, premium large-format provider Imax shared that their second quarter revenue increased 45 percent to $74 million, from $51 million back in 2021.

Comparisons to 2019 were also strong, with Cineplex reporting box office figures that reached 56 percent of 2019’s April box office (an impressive feat considering April 2019 saw the release of Avengers: Endgame released, then the highest-grossing film of all time). That growth continued, with the chain earning 72 percent of comparable 2019 box office in May, an impressive 89 percent in June, and 85 percent in July. Multi-national operator Kinepolis, which operates in the U.S. as MJR Digital Cinemas, welcomed five times more visitors in the first half of 2022 compared to 2021, representing 77.2 percent of the visitors from the same period in 2019.

Top Gun: Maverick

An influx of theatrically exclusive content–topped by the long-awaited release of Paramount’s Top Gun: Maverick–made all the difference in Q2. AMC CEO Adam Aron reflected, “Numerous films shined brightly in the second quarter, but none shined brighter than Top Gun: Maverick. I’ve seen it myself four times now.” The celebrated Tom Cruise sequel brought older audiences and occasional moviegoers back to theaters, with a $126.7M domestic opening and as of August 23rd and a domestic cume of $685.1M. Top Gun: Maverick was also a strong performer in premium large formats, becoming the highest grossing title to date in ScreenX and 4DX formats. Imax reported that Top Gun: Maverick delivered the highest Imax opening weekend indexing ever for a film debuting over $100 million.

The PLF Factor

For the first time in their company’s history, Imax achieved three consecutive $25M-plus global openings with Dr. Strange in the Multiverse of Madness, Top Gun: Maverick, and Jurassic World Dominion. Imax also reported a year-to-date domestic box office through June that trailed 2019 only by 5 percent, especially significant given that 2019 holds the record for Imax’s best year ever.

AMC reported a 19 percent growth in admissions revenue per patron compared to the second quarter of 2019, noting that revenue growth was driven by guests choosing to upgrade to PLF offerings. PLF attendance at AMC represented 15.6 percent of all domestic attendance in Q2, compared to 10.9 percent in Q2 of 2019. Nearly 15 percent of Cinemark’s second quarter box office came from their PLF auditoriums, which represent only 5 percent of their screens. Cineplex reported that 42.4 percent of total box office was driven by PLF. Kinepolis also invested in the premium movie experience with the introduction of ‘Premiere Seats’ in ten cinemas in their Canada-based Landmark chain an d a commitment to 200 laser upgrades in 2022. They are currently preparing to roll out additional premium concepts in the US.

Concessions and F&B

Despite supply chain issues, many major circuits reported increases in per patron spending across Q2. AMC delivered the news that preliminary July food and beverage revenue numbers appeared to be the largest single-month figure in their entire 102-year history. Per patron spending in the second quarter was $7.52, 55 percent higher than the average spending in pre-pandemic Q2 2019. Cinemark shared that their domestic concession per person reached an all-time-high of $6.90, 25.6 percent higher than the same quarter in 2019. Exhibitors are also leveraging concession technology, with Marcus Theatres introducing a concessions upsell piece on their app as well as a randomized last chance offer.

The Q3 Slowdown and High Hopes for Q4

The variety of films released to cinemas in Q2 lay bare the need for more than one big film a week. Greg Marcus, president & chief executive officer of Marcus Theatres said, “We need a broad breadth of films both small and large. As I said recently, you can’t […] we aren’t going to survive on just dinner alone. We need to eat three square meals a day. And frankly Hollywood needs that too.”

A lack of titles looms for Q3, a sentiment noted by AMC’s Aron, who said: “For full transparency, there is a dearth of new big movie titles being released in August and September. So things will slow for several weeks. Don’t expect too much of us for all of Q3. But then comes the fourth quarter of 2022. Talk about star power showing itself in movie theaters. These movies and more will all grace our screens in just the 13 weeks of the fourth quarter of 2022: Jamie Lee Curtis in Halloween Ends; Julia Roberts and George Clooney in Ticket to Paradise; Dwayne Johnson, Pierce Brosnan, and Viola Davis in Black Adam; Jessica Chastain, Anne Hathaway, and Sir Anthony Hopkins in Armageddon Time; Margot Robbie, Christian Bale, and Robert De Niro in Amsterdam; Tom Hanks in A Man Called Otto; Brad Pitt and Margot Robbie in Babylon. Oh and don’t forget the ever-so-much anticipated sequels to Black Panther, Shazam!, and Avatar.”

Though Warner Bros. announced yesterday that Shazam! Fury of the Gods has moved to 2023, the new management of Warner Bros. Discovery is reconsidering its approach to streaming, recognizing the importance of the theatrical exhibition window. Warner Bros. Discovery CEO David Zaslav stated in their earnings call, “We will fully embrace theatrical, as we believe it creates interest and demand, provides a great marketing tailwind and generates word-of-mouth buzz as films transition to streaming and beyond. When you are in theaters, the value of the content and the overall viewing experience is elevated. Then when the same content moves to PVOD and then streaming, it is elevated again. As films move from one window to the next, their overall value is elevated, elevated, elevated. We saw this clearly demonstrated with The Batman and Elvis. We have a different view on the wisdom of releasing direct-to-streaming films, and we have taken some aggressive steps to course correct the previous strategy.”

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