Adam Aron Says AMC Critics Are Fundamentally Wrong
AMC Entertainment Holdings Inc., (NYSE:AMC) CEO Adam Aron said so-called ‘experts’ thinking streaming dooms movie theatres are so fundamentally incorrect.
“So WRONG. Our problem is major studios released a lot fewer movies in 2021 & 2022 than in pre-pandemic years,” said the CEO.
Wall Street continues to push the short thesis on AMC, failing to acknowledge the fundamental growth of the company over the past two years.
Retail investors say overleveraged short sellers won’t give in even after the company begins to generate positive cash flow.
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AMC Entertainment currently has -$218.88 million in ‘free cash flow’ with at least $2 billion in debt.
The company has been able to reduce its debt with the sale of APE and raise cash through the equity too.
Recently, the company launched its online merchandise store and plans to launch its first credit card and branded popcorn retail business this quarter.
These are just a few of the efforts the company is making to increase its revenue.
Developments Pushing the Movie Industry Forward
Amazon is planning to invest more than $1 billion per year into theatrical distribution releases per Bloomberg news.
Amazon.com Inc. will be investing billions of dollars to produce movies that will release in theatres, according to people familiar with the company’s plans.
This is the largest commitment to the movie theatre industry by an internet company, says Bloomberg.
The world’s largest online retailer aims to make between 12 and 15 movies annually that will get a theatrical release.
Amazon is still sorting out this strategy said people who asked not to be identified.
That number of releases puts Amazon on par with major studios such as Paramount Pictures.
CNBC says this is a positive sign for the movie theatre industry.
“While a $1 billion annual investment for film development is on the lower end of what major Hollywood studios spend each year, it’s a positive sign for the movie theater business, which has struggled in the wake of the pandemic.”
Also Read: Goldman Says Bigger Short Squeezes Coming Since Meme Stock Frenzy
Streaming Didn’t Kill Movie Theatres
On the contrary, streaming platforms are beginning to figure out that they need movie theatres even as popularity in streaming has grown.
As “Avatar: The Way of Water” gets closer to the $2 billion mark at the worldwide box office, James Cameron says it’s a reminder that moviegoers still value the theatrical experience in an era of streaming dominance.
“I’m thinking of it in the terms of we’re going back to theaters around the world. They’re even going back to theaters in China where they’re having this big COVID surge. We’re saying as a society, ‘We need this! We need to go to theaters.’ Enough with the streaming already! I’m tired of sitting on my ass. Source: Variety.
Netflix’s showing of Glass Onion in movie theaters cost the streaming service $200 million for taking it out too early.
The film earned $15 million at the box office but CNBC says the showing could have made $200 million if it had been kept in theatres longer.
Disney’s Bob Igor on Streaming and Movie Theatre Industry
“The streaming business, which I believe is the future and has been growing, is not delivering basically the kind of profitability or bottom line results that the linear business delivered for us over a few decades,” Iger said.
In the interim, Disney hopes to cushion that short fall by continuing to rely on traditional forms of distribution, releasing movies on the big screen, where it recently scored blockbuster successes with “Avatar: The Way of Water” and “Black Panther: Wakanda Forever”.
Related: Naked Shorting: Roger Hamilton Reaches Out to AMC CEO
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