MIAMI–(BUSINESS WIRE)–CFO Luis Castelazo Letter to the Industry:
For decades, going to the movies has been one of America’s favorite pastimes. Exhibitors and movie studios have always worked together to provide an experience unlike any other to the communities we serve. Along with the commitment we have made to our vendors and to the thousands of local small businesses that supply our theaters (many of whom are at risk of losing their primary source of living), our commitment to our employees, our guests and our partners remains our top priority.
At CMX Cinemas, innovation has always been one of our core values. Our concept has evolved to provide an unmatched entertainment experience, with features such as laser projection, immersive sound, plush recliner seats, chef-driven offerings rivaling fine dining establishments, full bars with signature cocktails – all encompassed in a high-end, vibrant environment.
We understand not everyone is familiar with the nuances of the movie theater business and, as such, I feel obliged to clarify misperceptions about unilateral decisions adopted recently by some studios – and the severe impact these decisions will have not only on our industry and those who support it, but also on a century-old pastime enjoyed by so many: the unbeatable magic of experiencing a film on the big screen.
The facts matter:
Over the past several decades, movie studios have required movie theater chains to pay a higher and higher share of each movie ticket sold – commonly referred to as “film rental.” To illustrate this, the share of film rental in the U.S. has increased from approximately 27% in 1970(1) to 57% in 2019(2), driven by the studio’s hegemonic power. Movie theater chains have had no other option but to pay a higher share for each ticket sold – or go out of business. In spite of this, the movie theater industry has existed for over a century, and guests have continued to enjoy new movies on the big screen. At CMX Cinemas in particular, our guests have been captivated by our additional VIP offerings.
Through the years, not much has changed in how film rental agreements work. However, the pandemic has had a profound impact on the movie industry as a whole, allowing some studios to make unprecedented moves: showing premiere movies simultaneously on streaming platforms and in theaters. This completely changes the rules of the game – as movie theater attendance will undoubtedly be affected. For this reason, CMX Cinemas is engaging in conversations with studios to reach an agreement beneficial to both the industry and the customer.
The average ticket price in the U.S. is approximately $9, of which approximately $5 is paid to studios as film rental(2). In other words, movie theaters earn an estimated $4 per ticket at the box office, of which approximately $2 covers labor and approximately $2…
Read More: CMX Cinemas CFO Speaks Out on Recent Movie Industry Changes