Premium ticket prices boosts profitability at Cineplex
The Canadian exhibition giant reports its conversion to digital projection is "substantially complete."
Canadian exhibitor Cineplex Entertainment continues to exploit premium 3D ticket prices to higher earnings.
Screening Hollywood blockbusters like The Avengers helped Cineplex post second quarter profits of $21 million, up from earnings of $13.4 million in 2011, on revenue up 2% to $263.6 million.
Cineplex has been investing heavily in 3D, UltraAVX, Imax and VIP cinemas to secure premium ticket prices as Canadians flock to the local multiplex to see Hollywood franchise films.
The irony is North American box office receipts have been weak, not least as consumers rein back their discretionary spending amid economic uncertainty.
But next-generation digital projection technology is enabling Cineplex, rival Empire Theatres and other North American exhibitors to wrest more revenue from cinema patrons, especially at the concession counter.
Cineplex installed 210 digital projectors and 80 RealD 3D systems during the second quarter of 2012, bringing the chain to 1,320 digital projectors and 492 RealD 3D systems in 125 theatres.
As of June 30, 2012, Cineplex reported its conversion to digital projection was “substantially complete.”