Theatrical Stocks Decline on Renewed Premium VOD Concerns

2 Dec, 2016 By: Erik Gruenwedel

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Shares of the nation’s publicly traded theater operators closed down Dec. 2 following new industry concerns regarding the theatrical release window for new movies.

Stock valuations for Cinemark, Regal Entertainment, Carmike Cinemas, AMC Entertainment, Imax and Marcus Corp. dropped from 3.6% to 0.5%, respectively, following comments Nov. 29 by Warner Bros. CEO Kevin Tsujihara to an investor group about the studio’s efforts to shorten the theatrical window to two-weeks from the current 90-day period. 

Revisiting business models that would offer new movies on-demand in the home at a premium price ($25 to $50), follows pushback by a theater trade group in September against  21st Century Fox CEO James Murdoch, who had questioned the merits of the longstanding theatrical window and implored the industry to find “more-sophisticated release models” that could grow revenue for all parties.

Tsujihara said discussions between Warner and exhibitors are advanced, adding the studio would go it alone if necessary.

“We have to offer consumers more choices earlier. We think it’s an imperative,” he told attendees at the Credit Suisse Technology, Media & Telecom Conference in Scottsdale, Ariz.

The news sent Netflix shares up more than 3.5%. The SVOD pioneer has long advocated offering new-release movies across multiple distribution channels simultaneously.

 

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