As a long-time movie enthusiast and avid follower of the Canadian cinema scene, I can’t help but feel a mix of relief and anticipation upon learning about Cineplex‘s Q3 results. Relief, because it seems they’ve managed to outpace their 2019 revenues despite the one-time charge for that deceptive marketing practices fine. Anticipation, because with the steady return of tentpole films like “Inside Out 2,” “Deadpool & Wolverine,” and “Beetlejuice Beetlejuice,” it seems we’re in for a cinematic treat!
Despite incurring a loss of $39.2 million due to a fine for misleading marketing practices, as penalized by a regulatory body, Canadian exhibitor Cineplex surpassed its overall revenue from 2019 during the third quarter.
Cineplex earned revenue of $395.6 million, which represents a decrease of 4.6% compared to the same period last year when “Barbie,” “Oppenheimer” and “Mission Impossible: Dead Reckoning” were screened, with revenues then standing at $463.5 million. However, it’s important to note that this year’s Q3 earnings surpassed those of Q3 2019, which were $373.7 million, indicating a positive trend for the exhibitor as Hollywood box office sales continue to recover.
Concurrently, Cineplex announced a net loss of $24.7 million compared to a profit of $29.7 million in the same period last year. In the recent quarter, Cineplex incurred a one-time charge of $39.2 million as a provision for a penalty related to deceptive marketing practices, as determined by the Competition Tribunal.
Cineplex is challenging the decision made by the Federal Competition Bureau, which found that Cineplex deceived customers by not showing the complete ticket price when buying theater seats through their website (Cineplex.com). The exhibitor applied a $1.50 online booking fee, but this charge was reduced for Scene+ loyalty program members and was waived for CineClub members. In simpler terms, Cineplex is arguing that they didn’t clearly disclose the full ticket price to customers when using their website to purchase theater seats. The $1.50 online booking fee was discounted or waived for some customers based on loyalty programs.
On October 23, the Canadian exhibitor lodged an appeal at the Federal Court of Appeal, aiming to overturn the decision made by the Competition Tribunal. Meanwhile, Cineplex CEO Ellis Jacob informed analysts during a conference call that adjustments will be implemented on the company’s website to adhere to the ruling issued by the Competition Bureau.
Jacob pointed out that this decision won’t affect our capacity to collect the online booking fee, and we’ll still give you the choice to upgrade your experience with our advanced online seat selection service,” (paraphrased)
During the third quarter, Cineplex reported a decrease in box office earnings, with $174.9 million compared to $188.2 million in the same period of 2023. This decline was influenced by a drop in revenue following the successful release of “Barbieheimer” in 2023. As Canada’s dominant exhibitor, accounting for approximately 75% of box office earnings, Cineplex experienced a 15.5% decrease in theater attendance, with 13.2 million ticket buyers during the months ending September 30, 2024.
Following the analyst discussion, Jacob shared with The Hollywood Reporter his optimism regarding the film industry’s future performance based on the successful comeback of recent blockbusters such as “Inside Out 2”, “Deadpool & Wolverine”, and “Beetlejuice Beetlejuice”. He stated that consumer interest in the multiplex remains high, indicating a positive outlook. Jacob emphasized, “The studios are once again releasing their films in cinemas, and as we look towards 2025, there’s an abundance of promising content on the horizon. We can expect to see even more exciting additions to this lineup as time goes by.
He indicated that Amazon plans to unveil approximately ten films in cinemas next year, which they see as a gamble on the big screen. Similarly, Jacob mentioned that a competing streaming service, Apple, is also moving towards cinema releases, even though they’ve altered the release strategy for “Wolfs.
Initially slated for a broad cinema release, the movie featuring Brad Pitt and George Clooney was later decided by Apple to have a limited one-week theater screening first, followed by its streaming debut. At the same time, plans for a sequel were simultaneously unveiled.
1) “Jacob mentioned that Apple is exploring different options and deciding on a direction,” he explained. Meanwhile, Cineplex’s shares dropped by 29 cents, or almost 3%, to $10.49 during midday trading due to the announcement of the fine for deceptive marketing practices.
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2024-11-06 22:24