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Superhero movies and action films have been drawing audiences back to theatres with titles such as Spider-Man: No Way Home, Shang-Chi and the Legend of the Ten Rings and James Bond instalment No Time to Die. But the chief executive officer of Canada’s largest movie-theatre chain said he believes people still want to see a wide range of movies in theatres, and not just the biggest blockbusters.

The pandemic threw the entire movie industry into turmoil, shuttering theatres for months at a time and leading studios to circumvent the traditional theatrical window in favour of streaming releases. The shift has accelerated changes in audiences’ viewing habits. Former Disney CEO Bob Iger recently told The New York Times that he believes people will be more “discerning” about which movies they have to see on the big screen, while preferring to watch others at home.

“When you look back even to prepandemic, it was always the tent-poles that drove the business from an overall box office perspective,” Cineplex Inc. CEO Ellis Jacob said in an interview on Friday. “… But even when you look at the Academy [Award]-nominated movies, there are guests coming back. I think that will continue. Looking at things like Licorice Pizza, King Richard, West Side Story – all of those movies, they’re not doing huge business, but in the past none of these movies did huge business. They typically fill a niche, which is really good.”

Cineplex narrowed its net loss in the fourth quarter, as audiences returned to movie theatres – before renewed restrictions in some regions related to the Omicron variant of COVID-19 slowed the industry’s recovery in late December.

The Toronto-based cinema operator reported a net loss of $21.8-million, or 34 cents a share, for the three months ended Dec. 31, compared with the same period the prior year when it lost $230.4-million, or $3.64 a share, during a time of intense pandemic-related restrictions.

Cineplex welcomed 10.2 million customers in the quarter – accounting for more than half of its traffic for the entirety of 2021, when theatres were forced to close for long periods. That compared to just 800,000 visitors during the same period in 2020. Total fourth-quarter revenues increased by 471.9 per cent to $300-million.

After seeing momentum early in the busy holiday season, theatres were forced to close again in late December – a period that usually accounts for roughly 30 per cent of Cineplex’s revenues in the fourth quarter.

As of this week, all of Cineplex’s theatres have now reopened, though capacity restrictions continue in many jurisdictions. Mr. Jacob said he is optimistic for the months ahead, as restrictions have already begun to ease in provinces such as Saskatchewan and Alberta.

Home viewing has grown: Cineplex’s online store, which allows users to rent or buy movies on demand, increased its membership to more than 2.2-million in the quarter.

While Hollywood studios experimented with streaming releases during the pandemic, they remain committed to preserving the exclusive theatrical release window, Mr. Jacob said. That window has shrunk – to roughly 45 days, compared with typical periods of 60 or 70 days prior to the pandemic, according to Mr. Jacob – but he said studios recognize the importance of theatres.

As the industry scrambled to cope with the public health crisis, in 2020 a deal to sell the Canadian cinema chain to British-based Cineworld Group PLC fell apart. A lawsuit ensued and, in December, an Ontario Superior Court judge ruled in Cineplex’s favour, awarding the Canadian company nearly $1.24-billion in damages, saying that Cineworld was not justified in walking away from the deal.

Cineworld has appealed the decision, and late last month Cineplex filed a cross-appeal, arguing for more than $2.8-billion in damages should the decision be overturned. The matter is still before the courts. Cineplex is exploring the possibility of hiring an adviser to assist with the process, Mr. Jacob said.

“We are sitting there with a huge judgment, but there’s a lot of question marks as to the ability to collect and how we move forward and get to the finish line,” he said. When asked if the matter could be resolved with a settlement, or whether talks to that effect had begun with Cineworld, Mr. Jacob said he preferred not to speculate. “That’s why we are in the process of looking for and engaging an adviser, because it’s a lot easier for a third party to do the communicating than it is to do it directly in some cases.”

Cineplex had $739.2-million in long-term debt as of Dec. 31, 2021. The company announced its fourth credit agreement amendment with Bank of Nova Scotia on Dec. 30, providing relief from meeting certain covenants under its credit agreements until later this year.

For the full year 2021, Cineplex’s net loss decreased to $248.7-million or $3.93 a share compared with $624-million or $9.85 in 2020. Total theatre attendance reached 20.1-million, compared with 13.1-million in the prior year. Cineplex reported revenue grew by 57 per cent in 2021 to $656.7-million.

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Follow Susan Krashinsky Robertson on Twitter: @susinskyOpens in a new window

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