Palace in talks with potential partner on movie distribution pact
Moviegoers in 2018 may get another chance to see recently released Hollywood films that are taken out of rotation at the three cinemas run by Palace Amusement, but the cinema company was cautious in divulging details due to ongoing negotiations.
Executive Chairman Douglas Graham hinted this week that Palace plans to partner with an unnamed business to provide the service on a platform that he also declined to identify, saying the movies would be available roughly two months after completing their run in Palace theatres.
The timing would, importantly, beat the content's release on cable TV.
"We are examining the real possibility of partnering with other entities that will release pictures, not 90 or 100 days after our release, but maybe 50," said Graham.
Palace operates a short release window or schedule - the typical film runs for a week; an extraordinary film may run for three weeks; and an extraordinary film runs for six weeks.
Graham avoided revealing more information about the negotiations. He indicated that Palace would likely make an announcement on the planned partnership in the new year.
The deal that Palace is attempting to negotiate is an acknowledgment of another type of threat to the business outside of piracy: that of other content platforms. Graham mentioned only one platform by name - cable TV. But, increasingly, persons are avoiding cable in favour of TV streaming on platforms like Netflix, Hulu, Amazon, Disney and YouTube.
These platforms are creating their own compelling content shown exclusively on their platforms, attracting millions of subscribers. Additionally the content allows viewers, at times, to watch in 4K ultra-high-definition mode, which creates added realism. It has resulted in the traditional Hollywood distribution companies considering releasing content via these platforms, in addition to the traditional theatres.
"There is a great effort being made to reduce the release window. That is the band between our release and release on competitive platforms like cable TV," Graham told Palace shareholders at the company's annual general meeting in Kingston on Tuesday.
"The film companies are toying with the idea of releasing on all platforms at the same time. We argue that (that) would destroy the cinema. And the cinema is not their only source of income, but it is by far their most significant source of income, especially with the recent addition of China. And so it's not something that will happen readily, but it is something knocking at the door. So there is a degree of uncertainty," he added.
Palace Amusement - a listed company controlled by Douglas and his wife Melanie - doubled its annual profit for year ending June 2017, from $16 million to $33 million. Revenues rose from $909 million to $990 million in the same period.
For the first quarter ending September 2017, the cinema company made $9 million net profit on revenues of $260 million. Quarterly profit increased 246 per cent year-on-year.
"I would like to say that the future of the industry is as bright as Christmas, but I must refrain and take one step at a time, and one year at a time," said Graham. "We have had a successful year and we expect another successful year," he told shareholders.
The company is planning to show the latest instalment of the Star Wars franchise, set for release in the Christmas season.
"The whole industry is looking forward to it being a number one seller for the next 12 months, as was the last one," Graham said of the planned release of Star Wars: The Last Jedi.
"But one good film a good summer does not make. It is going to require a whole basketfull of other films to fill in February, March and April," the cinema operator said.