Cineplex posts strong third-quarter results amid increased competition from streaming giants

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In a week when the launch of the Disney+ streaming service signalled even more competition for consumers’ entertainment time and money, strong results gave Cineplex Inc. an occasion to remind digital giants that movie theatres can be a promotional vehicle for their businesses.

“We are still the engine that drives the train,” chief executive officer Ellis Jacob said in an interview on Thursday after Cineplex reported record third-quarter revenue of $418.4-million, up from $386.4-million in the same period last year.

Box-office revenue grew across the theatre industry, with a strong film slate that included The Lion King, Spider-Man: Far From Home, It Chapter Two and Fast & Furious Presents: Hobbs & Shaw. But subscription streaming services that produce movies are divided on their approach to theatrical releases. Apple Inc. plans to open films in movie theatres weeks before they are available on its new Apple TV+ service, The Wall Street Journal reported in September, citing anonymous sources familiar with the plans. But Amazon.com Inc. – which opted for longer theatrical releases in recent years for movies such as Manchester By the Sea and The Big Sick – is giving its new film, The Aeronauts, just two weeks in theatres before offering it on its Prime streaming service. And Netflix Inc. is also giving its new Martin Scorsese film, The Irishman, only a limited release before it goes to streaming later this month. Neither movie will screen in Cineplex theatres.

Mr. Jacob said he’s open to discussions with streaming companies.

“We do a lot of movies from streamers, but they observe the [exclusive release] windows. If they don’t observe the windows, then we don’t have them in the theatres,” he said, emphasizing that theatrical releases provide promotional buzz for movies. “I look at Netflix and say, ‘your subscribers are missing out, and you’re missing a great ability to market your brand through releasing these movies theatrically.’”

Netflix declined to comment and Amazon did not respond to a request for comment on Thursday.

Mr. Jacob pointed to the success of Cineplex’s free viewing parties for Toronto Raptors games last spring, which attracted 35,000 people during the playoffs at 33 theatres.

“They could have stayed at home and watched it, but they wanted that social experience,” he said. “That’s still a very important component of our business.”

Cineplex has also been investing in diversifying its business, building entertainment complexes such as the Rec Room (which combines restaurant and bar areas with arcade games, virtual reality and other entertainment); Playdium gaming complexes for children and families; and a partnership with Topgolf on a coming location with golf games, food and beverages and sports entertainment.

Cineplex reported a profit of $13.4-million, or 21 cents a share in the three months ended Sept. 30, compared with $10.2-million or 16 cents a share in the same period last year. Theatre attendance rose 1.8 per cent to 17.5-million visitors, and box-office revenue grew by 2.6 per cent to $177.9-million. Food-service revenue in theatres grew 8.9 per cent to $117-million.

The company’s media division saw a 30-per-cent jump in revenue, to $43.3-million.

The amusement and leisure business, which includes eSports, venues such as the Rec Room and Playdium, and provides games to its own venues and others, had $58.1-million in revenue in the quarter, up 8 per cent from a year ago. Food-service revenue in its entertainment business grew nearly 6 per cent, to $8.5-million. Cineplex had $13.6-million in other revenues, including the online Cineplex store, events, gift cards and other items.