Screenvision Media CEO John Partilla joins Yahoo Finance Live to weigh in on trends in the movie industry and the state of movie theaters.
Video Transcript
– The summer movie season is coming to an end, and the box office is still lagging behind 2019, data from Box Office Mojo showing a 31.7% decline in box office sales from pre-pandemic levels. But our next guest believes that there’s still money to be made in the theaters. Joining us now in studio, we want to welcome John Partilla. He’s the CEO of Screenvision Media. We also have our media reporter, Alexandra Canal, joining us here for this conversation.
John, it’s great to see you. Last time we spoke was right at the start of the pandemic.
JOHN PARTILA: Yep.
– Certainly, a very tough time for your industry. We have seen a rebound in the box office, although that rebound has seemed to stall out a little bit in recent weeks. What do you make of where things stand in that rebound and your outlook into the fall, when some people are saying, there’s not many blockbusters here on the docket?
JOHN PARTILA: Yes. Well, thank you. It’s, it’s terrific to be here again in person. And yes, it was a long time ago I was here. And it’s certainly been a very interesting period, but we’re surviving. So I think the key is the business is in recovery mode. It hasn’t fully recovered, as you’re indicating, but it’s well on its way.
And the summer box office today, really the summer alone, if we just look at that in an isolated way, it’s about 85% of the performance of 2019, which is a good indicator of strength. But year to date, you’re right, it’s about 30% off year to date versus ’19.
What we’re very hopeful about and optimistic about is that as we bank into the fourth quarter, October, November, December, we’re going to see again that sort of 85% to 90% comp versus Q4 of ’19. And I think with the slate that’s coming, we’re going to be well on the way to that.
ALEXANDRA CANAL: And John, last week, we got the news that Cineworld is potentially filing for bankruptcy. As a leader of a business that’s so tied to the box office, so tied to the theatrical return, what does news like that say to you? What did you make of that report?
JOHN PARTILA: Well, it was– it’s obviously what a lot of people are focused on right now. What I would say about that is that there’s two sort of streets that we focus on. There’s Wall Street, and there’s Main Street. And just starting with Main Street for a moment, it does appear that the moviegoing business, the moviegoer is back. It’s, it’s not back fully to where it was in ’19, but people are clearly returning to that behavior of returning to their local cinema and enjoying that experience.
But if we look at the Wall Street perspective, the recovery is uneven, right? And it’s harder for certain organizations than others. And I think the Wall Street issue right now surrounding Cineworld really has to do with their debt structure, which is nearly $5 billion. It has to do with some of the release issues, and from their own admissions, they’ve had some challenges with a previous merger attempt with Cineplex in Canada. That was pre-pandemic. And so I think the issue is really not so much a Main Street moviegoing issue as much as a Wall Street financial pressure issue.
ALEXANDRA CANAL: Well, to follow up on that too, is there a way that you could safeguard your business against that? Has there been any talk when it comes to extending maybe beyond the theatrical and partnering with streaming services? We know a lot of those major players are coming out with as-supported versions. Any conversations there?
JOHN PARTILA: There’s been a lot of innovation on that front. In fact, we’re increasing seeing that streaming providers are more closely working with theater owners or exhibitors to talk about featuring some streaming new launches of their shows in the movie theater first, which I think is a win-win for everyone. If they release maybe the first two or three episodes in a chunk that you could first go see in a movie theater and have that immersive experience and then see the rest continuing, obviously, on your own streaming platform, I think we’ll see more of those partnering opportunities and new innovations. But right now, what we’re really focused on is, hopefully, the Q4 slate really continues to build that recovery.
RACHELLE AKUFFO: And John, Rachelle here. In terms of demographics that you’re still hoping to reach back into, where are you looking?
JOHN PARTILA: Well, we’ve been very fortunate in the moviegoing business, which is what people really seek particularly advertisers, is that youthful and diverse and hard-to-reach or elusive audience. And so for us, the moviegoing business has always been one that’s represented by youth, right? One out of two tickets are really purchased by those that are 20– age 25 and below. And they tend to be a very diverse audience. One out of two tickets generally are purchased by non-white moviegoers.
And so for us, we want to continue to see that audience and represent that audience to Madison Avenue, because it’s really a critical audience that advertisers are seeking.
ALEXANDRA CANAL: And I’m curious what you’re hearing from theater partners when it comes to where we’re at in the theatrical recovery. Obviously, theaters hit hard by COVID. Now there’s supply chain headwinds. There’s pipeline backlogs. What are you hearing from those partners when it comes to where we’re at today and what we still need to get to where we were pre-pandemic?
JOHN PARTILA: Well, it’s been a business that has demonstrated great resilience over many, many decades. And I think that this has been challenging for lots of businesses, particularly the moviegoing sector, these last two-plus years. But what we’re finding that is people have done a good job, I think, of managing their cash flows on the movie theater basis, including our own company by the way, which focuses on the ad sales around the movie experience.
People have worked hard to strengthen the loyalty and the dialogue they have with their own frequent moviegoing audience, and they’re continuing to work on those kinds of innovations that make getting off your couch and the moviegoing experience very worthwhile. So continuing, you’ll see strong investments in the recliners, you know, the sound systems, the screen experience, the concessions. In some cases, bars and mini-restaurants are popping around the theatrical moviegoing experience.
So I think we’ll continue to see the exhibitors innovate, experiment and adapt, which has served them so well.
– John Partilla, always great to get your perspective. Thanks for joining us today. CEO of Screenvision Media, and our thanks to Allie Canal as well.