TORONTO — A popcorn ban across Ontario and movie theatre closures in Quebec hobbled the recovery of Canada's largest film exhibitor Cineplex Inc. over the Christmas holidays just as Spider-Man arrived to save the day.
Marvel's blockbuster smash "Spider-Man: No Way Home" attracted moviegoers back to multiplexes around the world in December, but in Canada, a new wave of provincial restrictions tied to the Omicron COVID-19 variant made it tough for Cineplex to capitalize on the busiest movie season.
"We probably lost close to seven to seven-and-a-half million bucks in Ontario concession sales," Cineplex chief executive Ellis Jacob estimated in an interview.
"But the thing that hurt the most was Quebec pulled the plug on us in the middle of December."
Cineplex narrowed its fourth-quarter loss to $21.8 million in the period that ended Dec. 31, on the back of major draws that also included "Dune" and James Bond's "No Time to Die." The results were a vast improvement over the devastating loss of $230.4 million a year earlier when Canadian cinemas were closed due to pandemic restrictions.
However, the tighter loss was still well below a profit of $3.5 million booked in the same pre-pandemic period of 2019.
Concession sales fell more than 17 per cent as Quebec closed theatres in December and Ontario restricted food and drink sales during the final half of the month. Snacks revenue dropped to $7.49 per patron from $9.06 a year earlier.
After the quarter's end, Cineplex's Ontario theatres were shut down completely under provincial mandate. They reopened at the end of January, while Quebec locations started operating again in early February.
Nova Scotia presently has a ban on snacks at movie theatres.
Many questions linger for the future of cinemas as COVID-19 restrictions gradually ease and some provinces weigh eliminating vaccine passports. Meanwhile, the true impact of streaming habits on ticket sales continues to evolve.
Jacob has said he's confident 2022 will prove the strength of the theatrical window, pointing to "The Batman" and a new Top Gun sequel as two sure-fire bets that will draw crowds and drive the cultural conversation.
"I don't see people rallying about the fact that Netflix released a movie," he said.
"They release a lot of movies, but most individuals don't even know about them in some cases."
Except during the fourth quarter Netflix did rally viewers around at least two of its movies.
Conversations about star-studded satire "Don’t Look Up" spread like wildfire on social media before it picked up a best picture Oscar nomination earlier this week. Netflix also boasted that the Ryan Reynolds action flick "Red Notice" became one of its most-watched titles.
Other signs of theatrical's waning influence have crept up.
Disney's "Encanto," which played Cineplex theatres in late November, pulled in a respectable box-office result for these uncertain times, but its cultural impact soared after it was rushed to Disney Plus last month. After the animated musical became available at home, its song "We Don't Talk About Bruno" rocketed to No. 1 on the Billboard Hot 100 music chart.
Earlier this week, Disney CEO Bob Chapek used "Encanto" as an example of changing times for his business. He told shareholders: "We do not subscribe to the belief that theatrical is the only way to build a Disney franchise."
Recently, Disney switched gears on its Toronto-set Pixar film "Turning Red," cancelling its theatrical run in favour of a straight-to-streaming release.
Jacob gently pushed back on those efforts.
"They are the only studio now that continues to experiment," he said.
"The rest of them are pretty well committed to a reasonable window for theatrical and, to me, that's really very important for our business moving forward."
Cineplex said its quarterly loss amounted to 34 cents per diluted share for the quarter ended Dec. 31 compared with a loss of $230.4 million or $3.64 per diluted share in the last three months of 2020.
Overall revenue totalled $300 million compared with $52.5 million a year earlier as theatre attendance rose to 10.2 million compared with 800,000 in the fourth quarter of 2020.
Box office revenue rose to $125.9 million during the fourth quarter, compared with $7.3 million a year earlier when theatres were closed for the majority of the quarter.
This report by The Canadian Press was first published Feb. 11, 2022.
Companies in this story: (TSX:CGX)
David Friend, The Canadian Press
