BoxOffice® Pro - April 2014

“Downtown Burbank” are words that may elicit
smiles from viewers of the 1960s variety show
Rowan & Martin’s Laugh-In. They make executives
halfway around the world at China’s Dalian Wanda
Group smile, too.
by Michael White
n On any given weekend, 30 Burbank auditoriums operated by Wanda’s AMC Theatres are
so jammed with moviegoers that they rank among the 345-theater chain’s top performers.
Wanda’s Burbank real estate, a short drive from Warner Bros., the Walt Disney Company,
Universal Pictures, and DreamWorks Animation, also serves as a reminder to Hollywood
that exhibition has become an international business.
Wanda’s acquisition of AMC, the second-largest U.S. chain, for $2.6 billion in 2012 remains
the most glamorous example of exhibition’s international flavor. But Wanda isn’t the
only chain on the move. Cinemark Holdings Inc., the third-largest U.S. chain, plans to add
100 or more screens in Central and South America this year. Mexico’s CinEepolis also is
growing throughout Latin America. In a bolder move, the company has grabbed a foothold
in India and is adding to its chain of luxury cinemas in the United States. CJ CGV, South
Korea’s largest chain, is moving into China, the world’s fastest-growing market.
Common to each company’s game plan is the goal of becoming a leader in its targeted
markets, a necessary step to negotiate the best deals with movie distributors and concession
suppliers, says Matt Harrigan, an analyst with Wunderlich Securities in Denver. He expects
those who already have an international presence to keep expanding.
“At the very least you’re going to have a lot more consolidation on a national scale,” Harrigan
says. “In some instances in the past, international hasn’t been that big a deal because
companies have taken a fractured approach. But increasingly, you’re getting companies with
a lot of scale. Cinemark has a lot of scale, and when you look at Wanda in China, they have
a vision of a global company.”
With the exception of Wanda, the global dynamics that are driving exhibitors’ expansion
track closely with the growth of international box office receipts. Like studios, adventuresome
cinema operators are looking for a bigger share of revenue in the world’s fastest-growing
markets. Films now routinely take in twice as much revenue from international
territories than from so-called domestic cinemas in the United States and Canada. Iron Man
3, last year’s top-grossing film, did just that, generating $806.4 million abroad and $409
domestically.
(continued on page 78)
76 BoxOffice ® Pro The Business of Movies APRIL 2014