Why theater owners are worried | Wilnesh News

More integration, more problems – that’s the theater world’s latest worry.

After a month-long negotiation process, Paramount and Skydance have reached a merger agreement. While the proposed union has been touted by those involved as a perfect match, Hollywood’s movie theater operators have their concerns.

In other words, the continued consolidation of the industry will exacerbate production difficulties, resulting in reduced film distribution in recent years.

President and CEO Michael O’Leary said: “Reduced film production resulting from the merger will not only harm consumers and result in lost revenue, but will also negatively impact workers in every sector of this great industry – creative, distribution and exhibition.

Paramount and Skydance have long been production partners, co-financing and distributing film franchises such as “Mission: Impossible,” “Star Wars,” “Terminator” and “Transformers.”

Skydance founder David Ellison announced during an investor call on Monday that Paramount and Skydance have co-produced 30 feature films. He said the deal would “unify key rights to several of Paramount’s most iconic franchises” and “allow us to expand franchise management.”

However, each company has other production partners, and it’s unclear how the merger will affect future production.

“The industry as a whole will be watching closely to see how Skydance and Paramount’s distribution plans develop over the next few years,” said Shawn Robbins, founder and owner of Box Office Theory. “I think it’s fair to say that there is cautious optimism. . This is different from the situation where another major studio steps in to acquire Paramount, which is more likely to cannibalize the output of theatrical content to a large extent.

Fears of mergers follow those of organizations such as NATO. disney Back in 2019, there was 20th Century Fox and 20th Century Fox. Since 2021, the combined studio has released only about a dozen movies per year.

Moreover, by 2024, the two studios have only released three games.

“Consolidation phobia is the result of theater owners fearing the impact of fewer movies in the market on their bottom line,” said Paul Dergarabedian, senior media analyst at Comscore. “It’s all about product, and a strong lineup of big-screen products keeps the industry humming. Developing and ensuring momentum is key to cinema’s success.”

The theater industry as a whole is grappling with a slowing influx of films. Pandemic-induced shutdowns have severely crippled production, and a subsequent double strike in Hollywood has also disrupted production of new films. While box office analysts expect an increase in movie numbers in 2025 and 2026, there is still uncertainty over whether production will return to pre-pandemic levels.

“However, despite being a sales-driven business, it is more about the quality of releases and their appeal to audiences than sheer quantity,” Dergarabedian said. “If there are fewer movies chasing the same box office, that’s not necessarily a bad thing. If there are fewer movies but the average revenue per movie is higher than in a more crowded movie market, then that’s a leaner and more average and ultimately more sustainable business. Sustaining business in the long run.

One immediate highlight is the merger of Paramount and Skydance that will bring Skydance Animation and Nickelodeon together. Former NBCUniversal CEO Jeff Shell, who will become Paramount’s next president after the deal closes, told investors on Monday, “We will immediately become a leader in animation.”

“Animation is very important from a theatrical perspective, and Paramount’s partnership with Nickelodeon is very strong,” he said on an investor call.

Animated movies have been strong at the box office this summer. Disney and Pixar’s “Inside Out 2” Global box office receipts over the past month were $1.2 billion, the fifth-highest total in the history of an animated film. Its domestic box office revenue was $533.8 million, the third highest among animated films.