Wednesday, August 13, 2008

Carmike 2Q08 Results: 3D Kicks Ass

Well of course! Jim here. Take a look at Carmike Cinema's second quarter results for this year here. The theater chain had wonderful things to say about 3D and in particular these nuggets:

"Moving briefly to our third quarter box office, through our digital 3D cinema platform, we were able to show Journey to the Center of the Earth 3D on 327 screens and generate a combined box office concession revenue of approximately $6.5 million. We are pleased with the results from this 3D presentation, which generated fives times the per screen revenue compared to our 2D average screen performance. This allowed us to enjoy nearly a 100% increase in our normal share of the industry domestic market.

Additionally, we experienced no customer push-back from our $2 3D surcharge.

With the success of Hannah Montana during our first quarter, followed by Journey to the Center of the Earth 3D, we remain optimistic regarding the upcoming 3D release of Fly Me to the Moon in August, a re-release of Nightmare Before Christmas in October, and Bolt in November. We see this 3D technology as a key component in supporting our box office performance during the upcoming years. The schedule for 3D release in 2009 is My Bloody Valentine in January, [Cora Line] and Disney’s Jonas Brothers in Concert, both in February, Monsters Versus Aliens in March, Ice Age in July, Toy Story 3D in October, A Christmas Story in November, and of course, Avatar in December"

(Emphasis and color are mine).

And further...

"Looking forward, we are currently evaluating our option to install our final 100 3D units. The current units have the newest technology, allowing us to offer the 3D experience in our largest auditoriums an ability we could not offer at the time we rolled out our 3D program in the last two years.

This new installation will completely cover our entire circuit’s need and allow us to meet any attendance demands for future 3D tent-pole pictures such as Monster Versus Aliens and Avatar.

You have obviously heard of the major success of Dark Knight and its passing the $400 million mark recently. We have shared in this success as well as the 3D movie, Journey to the Center of the Earth, where we increased our national circuit market share by almost 100%. We also experienced a five-to-one ratio box office sales at our 3D locations compared to our 2D locations. I think it is interesting to point out that we played Journey 3D in 187 locations and only had 12 locations playing the movie in 2D, a clear indication of how saturated we have the 3D system throughout our circuit.

As of August the 15th, there are 23 3D films on the schedule through 2010, representing nine different national film distributors which clearly demonstrates this industry’s commitment for 3D"

Here is an interesting question and answer exchange:

David Miller - Caris & Company

"Okay, wonderful. And then the $2 up-charge for Journey to the Center of the Earth, can you guys just give me your overall sort of 100,000 foot view as to what kind of elasticity in pricing that might carry going forward? I mean, Jeff Katzenberg, we cover DreamWorks Animation, you know, he’s been talking rhetorically about a $5 up-charge for some of his films. A lot of the guys at DCIP were talking about maybe a $3 up-charge as being standard. It looks like you charged $2 for Journey. Could you just comment as to any wiggle room in the future with that up-charge? Thanks"

Fred W. Van Noy

"When we played Meet the Robinsons, we had 10 locations that we pushed that $2 to $2.50, kind of just to test the waters. With Journey, we had 17% of our play dates at the $2.50 level. I think that of course we’ll continue to push this. We had absolutely no push back with the 17%. They were of course our larger markets but as we get to Bolt, I think Bolt will be the movie that we will be able to really escalate this price up a little bit higher.

And as far as a $5 threshold or a $3 threshold, we are just going to keep testing the market and see where it will take us."

It doesn't take much to see where 3D is going: A better experience for audiences and a better bottom-line for the industry - win/win. I don't know about you, but I find it very fulfilling to watch the various movie site naysayers jump on the 3D bandwagon more and more as time goes by. Glad they are joining us! It's about time... :-)

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Jim Dorey
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