Axios Pro: Media Deals

April 10, 2024

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Good morning, Media Deals readers!

😬 Situational awareness: AI startup Anthropic says its language models have steadily and rapidly improved in their "persuasiveness," Axios AI+ co-author Ryan Heath writes.

1 big thing: Movie theaters face cash crunch

NATO CEO Michael O'Leary speaks on stage during CinemaCon in Las Vegas. Photo: Jerod Harris/Getty Images for CinemaCon.

CinemaCon kicked off its weeklong pep rally for the movie theater industry with a sobering message yesterday: Theaters need more money.

Why it matters: Peak audience demand is clashing with budgets still weighed down by pandemic-era closures and a labor strike, Tim writes.

State of play: Many theaters are in need of refurbishment and system upgrades, says Michael O'Leary, CEO of D.C.-based industry trade group National Association of Theater Owners.

  • "We're clearly going through a phase where, in order to meet consumer demand, we need to be more experiential, and there are costs associated with that," O'Leary told Tim during a press conference that followed his state of the industry address.
  • Theaters are also working to upgrade from digital projectors to laser.

Catch up quick: The two largest theater chains have been in financial turmoil ever since the pandemic hit.

  • Regal Cinemas owner Cineworld emerged from Chapter 11 bankruptcy last year as a private company with a smaller footprint.
  • AMC, the world's largest movie chain, faces continuing cash flow issues and bankruptcy fears stemming from its $4.5 billion debt load, despite raising tons of money during its memestock era.

Zoom out: The state of the box office continues to make life challenging for movie theaters.

  • Despite the Barbenheimer phenomenon, last year's box office was still kneecapped by the dual Hollywood strikes that resulted in numerous filming delays that are affecting the 2024 slate as well.
  • This year's box office is expected to reach $32.3 billion globally, according to film industry analytics firm Gower Street. That would be a 5% decline from last year, ending three straight years of gains.

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