Bad string of movies hurts Wall Street ratings of movie theatre chains

March needs a hit. Last year it was The Hunger Games, the year before was Rango, and the year before that was Alice in Wonderland. March hits are kind of like spring weather though--unpredictable. Last year the top three March releases earned $758 million. In 2011, though, the top three only added up to $285 million. 2010 was good year, with the top three totaling $618 million. So March is fickle, but so are Wall Street analysts. Analyst Eric Wold of B. Riley Caris recently downgraded the ratings of Carmike, AMC, and Cinemark from buy to neutral, sending their prices sliding downward.

Caris' main reason for the downgrade was the low opening of Jack the Giant Slayer, which should have been a bright spot in six weeks of disappointing box-office returns. He now predicts there will be a year-over-year decline of 15% in the first quarter, instead of 10%. This Friday's release Oz the Great and Powerful should do better than Jack, but it's unlikely it will approach the huge success of Alice in Wonderland.

The unfortunate thing is that the downgraded ratings have nothing to do with the theatres themselves. As many theatre owners have told me during interviews, it's all about the product. If there are good movies, people come. Theatres can dial up the experience with great service and presentation, but without great movies, people stay home.

Now for the good news. Wall Street analysts only care about the next quarter, not the long-term future of the business. This may be a bad March, but what about the summer and winter ahead? Or the amazing lineup of Oscar nominees a few weekends ago, most of which earned over $100 million at the box office? In the wake of so much change, whether it's day-and-date on-demand releases or digital projection, the exhibition industry has been holding strong, and a few bad movies aren't anything the industry hasn't seen before or won't see again.

Live 3D sports events win raves from Rave, Carmike and Empire

By Sarah Sluis

"I'm convinced this is the future. The business model has changed. The possibilities are endless."

Those are the words of Fred Van Noy, chief operating officer and senior VP of operations at Carmike Cinemas, speaking at Cinedigm's Live 3D presentation at ShoWest Thursday morning. Van Noy and two other exhibitors recounted their success with Cinedigm's recent live 3D offerings of the BCS Championship Game and the NBA All-Star Saturday Night, the first such national sports broadcasts in cinemas.

Tom Stephenson, president and CEO of Rave Motion Pictures, reported that the BCS event sold out in nine Rave locations and overall accounted for seven of the top ten grossing cinema attractions that night. What's more, concessions (which at Rave included beer, wine and nachos) posted an increase of $5.23 per patron.

Dean Leland, VP of studio and media relations at Canada's Empire Theatres, said his circuit charged $20 plus tax for the NBA spectacular at his Toronto location, and company research showed that many patrons drove in from other cities and said they would return for a similar experience.

Cinedigm COO Michele Martell reported some impressive stats for each event: The BCS game, she said, did 2000% more business than the number-one movie that day, while the NBA event earned 45% more than nine of the top ten movies that Saturday night.

The audience at ShoWest got a look at footage from both events, and the NBA highlights were particularly impressive, with multiple 3D angles on the action produced exclusively for theatres.

Van Noy noted that, with the help of Disney and ESPN, Carmike first experimented with a live 3D broadcast of a Morgantown, West Virginia home football game in 2005, and patrons willingly paid $10 to $12 for something they could see free at home on TV. The tailgate parties in the parking lot and the cheering crowds were Van Noy's first inkling that "we've got something here."

On opening weekend of Monsters vs. Aliens, Carmike purposely played the 3D animated feature on 110 2D screens in addition to its 439 3D screens for comparison purposes. The difference in business was striking, as high as 17 to 1 in one Carmike multiplex, Van Noy reported.

Rave's Stephenson encouraged his fellow exhibitors to come aboard the 3D train. That's where the business growth is, he asserted, as audiences get accustomed to a whole new brand of cinema experience.