Moviemakers reprioritising theatrical releases, Palace Amusement optimistic

Palace Amusement Company is banking on a reinvigorated cinema market as movie producers signal a shift in distribution that reprioritises theatrical releases.

The Jamaican cinema company is preparing for more attractive movies over the months of February to April, amid the reversion to a ‘theatrical first’ strategy by film production companies, such as Warner Bros.

It means that movie companies will go back to releasing films in cinemas before releasing them on other platforms, thereby heightening the possibility of ticket sales at cinemas to climb back to pre-COVID numbers this year and into early 2023. Global cinema box office reached US$21.4 billion in 2021 – a seven per cent gain on 2020, but still less than half of pre-pandemic levels.

“The movie companies have been running tests, but it has been determined that it’s much more profitable for them to release pictures in the cinemas first and then move to online platforms,” said Marketing Manager of Palace Amusement Melanie Graham.

“ Spider Man was one such movie, and there are a couple of others that went straight into the cinemas initially; and that has proven very good for them. So, I think they are convinced of that model now,” Graham said.

In 2021, the movie industry tried multiple experiments to combat the pandemic, primarily through hybrid streaming releases. Consumer spending on digital home entertainment surged at first, prompting competitors to join the movement, but sales have slowed throughout the pandemic. Piracy experts are watching to see how the reversion impacts illegal streaming.

Last year, Warner Bros, the biggest practitioner of the dynamic box office and home viewership sales model, announced that it will be reverting to a 45-day theatrical model for most of its 2022 titles.

Palace expects that to translate into sales of additional movie tickets and the filling of seats at its cinemas, its revenue having been decimated by the pandemic amid social- gathering restrictions.

At the end of its financial year ending June 2021, Palace’s annual revenue faced a steep decline, falling from $919 million to $105 million and putting additional pressure on its bottom line. Its losses nearly quadrupled, from $100 million to $383 million.

But after a few rounds of cash injections from loans, the launch of a drive-in cinema, and adjustments in operation of its other four cinemas, Palace Amusement began unwinding some of the losses. Its September first quarter, for example, saw a 16 per cent rollback in losses to $79 million, compared to losses of $95 million in the comparative period of 2020. Sales also hit $80.5 million in the September quarter, more than three times the $29 million generated in the 2020 period.

Palace’s results for the second quarter are yet to be released, but Graham noted that sales in the period, which was helped by the traditional heavy traffic in December, were encouraging.

“We are seeing some light. January has been slow, but I believe that the reason for this is the outbreak of the omicron virus. Pictures are being moved up, and so March to April is looking pretty strong for us,” Graham said.

karena.bennett@gleanerjm.com