A happier ending
Movie theatre finances in 2022
By Rob Roach, ATB Economics 5 October 2023 1 min read
Statistics Canada has just released data on the revenues and expenditures of movie theatres in 2022 and the results are positive.
After a disastrous 2020 when the pandemic pushed the operating revenue of movie theatres in Alberta down by 72% compared to 2018 (the data are available every two years starting in 2014), earnings grew by 176% in 2022.
The revenue rebound was not, however, enough to return revenues to their pre-pandemic level with earnings down by 23% compared to 2018.
The unfinished nature of the recovery is also evident in the industry’s profit margins.*
In 2014, 2016 and 2018, the profit margin for Alberta movie theatre industry was about 25%. It fell to negative 43% in 2020 before returning to positive territory at just under 8% last year.
It is a similar story nationally, with revenues bouncing back in 2022 but still falling short of pre-pandemic levels and the sector’s profit margin going from -43% in 2020 to +6.5% in 2022.
In terms of what’s next for the industry, Statistics Canada provided the following observations:
“The end of the restrictions and the pent-up demand from prior closures and delays in theatrical pandemic releases are expected to be a significant boon to the industry. However, some challenges lie ahead.
American-run film and television productions, including the ones filmed in Canada, were halted after members of the Writers Guild of America, the Screen Actors Guild and the American Federation of Television and Radio Artists went on strike. This delayed the release of several films and reduced the supply to theatres. Continued competition from streaming services and a resurgence in piracy of films are other challenges faced by the industry. The biennial survey on motion picture theatres will provide information on the financial impacts of these post-pandemic trends.”
*Profit margin = operating revenue minus operating expenses, expressed as a percentage of operating revenue.
Answer to the previous trivia question: Canada's first pizzeria opened in 1948 in Montreal.
Today’s trivia question: Which movie had the highest worldwide box office gross in 2022?