The movie theater business has been around for more than 100 years and continues to increase in popularity and technological innovation. Today's theaters offer a variety of options catering to different tastes. Most theaters today also have additional revenue sources, such as concessions, arcade style video games, or a full dining experience while you enjoy the movie of your choice.
The additional revenue sources are normally the main revenue source for most theaters. The money from tickets sold covers little more than the film rights. Although, some movies do bring in the crowds. The Avengers recently took the box office by storm bringing in $832,443,000 as of May 11, 2012. Apparently, the movie theaters are doing just fine.
With consumer spending up and the summer break just beginning, theaters are about to bring in more with the summer movie season. Regal Entertainment, Carmike, and AMC are some of the largest, most well-visited theaters in the U.S. They should be expecting a great summer. As attendance increases, these three companies will all have something to look forward to.
Regal Entertainment (RGC) is seeing growth from its use of premium screens such as 3D, IMAX, and RPX. Its luxurious seating, coupled with a large screen, doesn't hurt either. Regal should benefit from an improvement in attendance, continuing expense discipline, and a large dividend yield. Regal recently reported $2.8 billion in revenue for Q1 2012.
Carmike Cinemas (CKEC) also has a few things going for it. Ticket market share has rebounded. Management has reduced long-term debt, walked away from under-performing theaters, and also added several new acquisitions. Carmike also has a hefty stake in Screenvision, a cinema-ad company. Carmike has 237 theaters in 35 states and brought in a Q1 2012 revenue of $517.25 million; 237 theaters means that they have a lot of seats to fill. The onslaught of the summer blockbusters should do the job and greatly increase revenue.
AMC Entertainment (AMC-OLD) is another large cinema company. AMC operates 347 theatres across the U.S. and Canada. AMC prides itself on industry innovation. They provide a premium cinematic experience along with diverse content and a selection of beverages and snacks. They are also counting on the summer movie season to spike their revenue.
The industry as a whole is looking optimistic, with a projected increase in attendance for 2012 of 6%. Admission revenue is expected to rise 6.8%. With a recovering consumer, strong box-office performance, and solid film product, 2012 could be a record admission revenue year for the industry. Increased attendance is the main driver in optimism for the industry. If it continues through the year we could be looking at a comeback season for movie theaters in general.