Strong quarterly earnings reports for AMC Theatres and Cinemark have shown two things about the state of moviegoing right now.
As TheWrap previously noted, several summer films that flopped at the box office against their inflated budgets were nonetheless bringing substantial revenue to movie theaters. But the theater chains’ strong second-quarter numbers also tell us that people are going all in on the moviegoing experience.
On Tuesday, AMC Theatres reported 66 million tickets sold in second quarter 2023, the highest quarterly attendance seen at its locations since Q4 2019, just before the start of the COVID-19 pandemic. While the chain is still dealing with immense operating costs, revenue rose 15% year-over-year to $1.34 billion in Q2 and allowed AMC to report a small profit of $8.6 million after Wall Street projected another quarterly loss.
Cinemark also saw a big revenue boost to $942.3 million, up 27% year-over-year, and went from a Q2 2022 loss of $73.4 million (61 cent loss per share) to a 2023 profit of $119.1 million (80 cents per share).
The biggest contributors to this Q2 success were Universal’s “The Super Mario Bros. Movie,” Disney/Marvel’s “Guardians of the Galaxy Vol. 3,” and Sony’s “Spider-Man: Across the Spider-Verse” — films that all topped $300 million in domestic box office grosses with “Mario” reaching an astonishing $574 million.
But if these films were the only major moneymakers for Q2, overall domestic grosses wouldn’t have increased 15% year-over-year to $2.67 billion. Key support also came from films like Disney’s “The Little Mermaid” ($277 million), Universal’s “Fast X” ($145 million) and Paramount’s “Transformers: Rise of the Beasts” ($130 million).
Thing is, those three films all failed to turn a profit for their studios against their colossal budgets, with “Fast X” just barely reaching break-even territory with $704 million grossed worldwide against a $340 million production budget before marketing.
But for theaters that don’t have to worry about that budget, these films still provided vital audience turnout that wasn’t present last year, when big hits like “Top Gun: Maverick” and “Doctor Strange in the Multiverse of Madness” had to carry more of the box office load amid a more threadbare release slate.
“I’m sure the theaters would have liked the content that didn’t resonate with audiences to earn more box office, but they have been starved of volume for too long so this is the respite they desperately needed,” said Wedbush analyst Alicia Reese.
Reese also pointed out other positive trends for theaters that show that audiences are spending as much per person as they did before the pandemic, even though attendance is still roughly 30% down from 2019 levels.
As seen in the chart above, the number of films released in Q2 2023 is approximately 200 compared to over 350 films in Q2 2019. Despite the number of offerings still significantly down, the $2.67 billion total for the quarter shows that the box office is overindexing relative to the volume of films released, primarily because more moviegoers are spending a little extra money to buy tickets for Imax and other premium formats.
On top of that, AMC and Cinemark have both seen significant increases in concessions revenue, with AMC’s data showing that the average amount of concessions revenue per customer has risen to $7.36, only one cent below the company’s all-time high.
“Theaters did remarkably well on concessions per cap and concession gross profit. Despite attendance 30% lower than 2018-2019, concession gross profit was about level with that period,” Reese said.
Combined with this summer’s box office returns, this data suggests that while moviegoers are becoming much more selective about what films they see in theaters and may be quicker to abandon films like “The Flash” that don’t have strong audience word-of-mouth, they’re more willing to go for a full experience when seeing a movie. They won’t just buy a ticket. They’ll buy the Imax ticket and get some popcorn, soda and maybe something else like candy or mozzarella sticks.
This means that even films like “Fast X” that are falling short of their huge budgets and past franchise track record can still have big value for theaters. They may not be popular enough to turn a studio profit, but if the opening weekend audience who wants to see Dominic Toretto go on another adventure or see Halle Bailey sing “Part of Your World” is more likely to buy some popcorn than they were before the pandemic, that means theaters are getting more revenue out of the average moviegoer even as the overall attendance and gross count is still short of pre-pandemic marks.
And keep in mind: We are talking about films that performed below studio expectations, not about ones that blew past them like Warner Bros.’ “Barbie,” Universal’s “Oppenheimer,” or Angel Studios’ “Sound of Freedom.” The party-like atmosphere surrounding “Barbie” likely encouraged more concessions among fans wearing pink to the cinema, while “Oppenheimer” has done so spectacularly on Imax that it recently had its engagement on those screens extended.
If Hollywood can create more cultural phenomenon films like those rather than ones like “Transformers” and “Indiana Jones and the Dial of Destiny” which only attracted franchise devotees, the increased revenue theaters are enjoying from moviegoers that are more willing to spend more for a full theater experience will get even bigger.
