CNK
#Yes, I think your assessment is exactly correct.
Last year there was ---+ it was a top tough comp last year.
There was a lot of product that played really well to the market place.
Again, Star Wars, while big in Latin America, the sci-fi type films don't translate as well across LatAm as do more action and family-oriented films, particularly animation.
In the fourth quarter, our attendance per screen was down, but really when you look on the whole of the year, attendance per screen was up a little over 4%.
It was very content-driven.
When you look at what we're already seeing the beginning of this year in January and February in Brazil, the box office has been booming, and it's largely again been content-driven.
They've had phenomenal success with DeadPool, and they had a local film called the 10 Commandments which has been I think the second-highest box office ever in Brazil, or second-highest attended film ever in the history of Brazil since tracking.
It's a long-winded answer.
The short answer is yes, it's what you said, it's been content-oriented.
I'm not necessarily saying that.
I was just saying that it is content-driven.
For the full year last year, attendance per screen was up 4.4%.
That's on top of 2014, when attendance per screen was up 4% year over year.
First quarter to date has been terrific in Brazil from an industry standpoint, just with the strength of some of the content that's been out there.
We'll see how the full quarter plays out international relative to domestic, but so far things look really good.
I would say it's not necessarily our cautiousness.
We are very diligent in regards to how we evaluate each and every investment.
But the developer, the development pipeline in Brazil specifically has slowed down a little bit.
It doesn't mean it's not going to continue into the future.
I think that's probably the single-most important factor as we look of why we're looking at 6% instead of 7%.
I think it's really important to note that doing 70 or 75 additional screens in 2016 in Latin America is a very positive move forward, considering the head winds that have taken place in that market place.
I would read this ---+ I would read the continued growth we're having there in a very positive light, considering the negative feedback that's been in the media back here in the US.
It was one of the reasons that <UNK> and I wanted to go down there and see and meet with developers, as well as visiting all our theaters and our offices.
I think that's fair.
Obviously we don't know the exact pipeline of what our competitors are doing, but we do know what potential projects are out there.
We're continuing to get our fair share, and in some cases more than our fair share of the products that we want.
Sometimes there's projects out there that quite frankly we choose not to do, because we they don't meet our hurdle rate.
We're happy to say no thank you in those cases.
I appreciate the question, <UNK>.
I would take hesitance with the word permanently.
Really, truly it's product flow.
It just depends on what kind of movies work as well today.
Who would've called DeadPool, a movie which quite frankly I think the reported production costs on that from Universal was about $58 million, was going to come out and likely do north of $350 million in the domestic box office.
It doesn't have to be a big, expensive movie, it just has to be a movie that works.
You wouldn't have been calling that a big tent pole movie with a production cost of $58 million.
The good thing about the 2016 lineup is we do think there will be a more equal related movies in the various buckets of performance.
We're likely not to have the mega blockbusters of $500-million and $600-million performers, but we are going to have more movies in that $150-million to $250-million range, which helps two things.
One it spreads the audience out; it creates more successful movies for our suppliers; and three, it releases the pressure a little bit on film rental, because you're not hitting the highest tiers on the scales.
I would just add to that briefly.
I think a lot of what the big studios have done, you've seen that.
It's a dynamic of what they've been choosing to produce, because the larger-type films tend to feed well from a brand building into the rest of their ecosystem, whether it's theme parks or consumer products or elsewhere.
At the same time now, I think there's other studios out there that have recognized there's an opportunity in that mid-tier space.
You have other companies like STX and some former heads of studios who are coming in and developing product in that area, which we're optimistic will help bring back a lot of the content that may have been in lesser volume over the last couple of years.
I would say nothing ---+ no change, because we very much are on the outlook for potential M&A, both domestically and internationally.
The deals that are to be looked at, we absolutely usually get a very good early look at them.
But we're, we're pretty disciplined in our approach.
I think it has paid off well for our stockholders, and we're going to continue to.
Nothing on the specific horizon, but very much on our radar.
There wasn't a egg effect on the box office in Brazil before, with the World Cup.
Relative to the Olympics, the studios and the distributors tend to want to line their product up in situations to where it's not going to be directly competitive.
We don't think it's going to have either an adverse or a positive effect, necessarily, on the box office.
We haven't seen any significant M&A increase in Latin America, based on the economic situation.
It's because the business is still a very healthy growing business.
Admissions are up in Latin America.
We haven't seen any spikes in that area.
I would just say a lot of the top circuits down there tend to be owned ---+ that are family-owned ---+ tend to be owned by families that are in the billions of net worth, so they're less impacted by some of the short-term dynamics in the market place.
It becomes other factors that will tend to drive their decisions to bring their circuit to market.
<UNK>, I think we will be able to; but literally as I noted, we just began the roll-out of this.
When I say just began, I mean on February 16 in two markets.
We're at the very early stages of it.
We will roll it out through all of our markets throughout the remainder of this quarter and into the second quarter.
We're way too early to have the ability to determine anything, given that we've just started in two markets with the roll-out coming.
There's no question about that.
We send out 4 million to 5 million e-mails each and every week, and have over 4 million unique users on our Cinemark app.
Significant amount of the promotional material that goes out is definitely tied to concession sales, concession offers.
Yes, we do see a significant redemption in those various offerings, those very offerings.
But relative to the new loyalty program, which we just announced today, it's too early to determine that.
We have ongoing loyalty programs in a number of our Latin America markets.
The re-seatng analysis, we look at obviously very specifically to the specific DMA and the theaters in the market place.
Also we look to do theaters that have a high occupancy, and ---+ excuse me, a high-capacity with not necessarily a high occupancy.
It's a very good way to reposition that theater because, you're going to lose 55% to 60% of the seats.
You want to make sure you don't have a theater that is highly utilized, otherwise you might run out of seats.
Then we look to say in the market place, what do the demographics look like there, and what do we think ---+ what's the competition look like there.
Has anybody else reclined in that market place.
To date, we've been very happy with the results, because they are exceeding our investment hurdle rates.
It really doesn't.
I've been in the movie business one way or another for over 30 years.
You just don't know what's going to take place.
The best example of that is what just happened two weeks ago with DeadPool.
No one in the industry was calling that movie to do what it did.
There were three or four movies like that last year.
We look at the lineup, and we think the lineup is very strong for the remainder of 2016.
The one thing that I really do like about it is it's more balanced, both across studio providers, and more balanced relative to not just two or three mega-megahits.
Then when we look at the 2017 lineup and the 2018 lineup, really truly in my experience we've never had this level of look-forward transparency to what the studios and distributors have announced.
We're optimistic for 2016, and also very optimistic for 2017 and 2018, with what's already on the books.
It's pretty positive.
Then as I noted in the prepared comments, too, there's always that little added bonus with the international market place, because you get those local titles that you don't necessarily always see coming.
The only other quick thing I'll add is we think it's important to look at the business more on a longer-term cycle.
It's hard to always look quarter to quarter, year to year because of the ebbs and flows of the product content.
That was a good line, wasn't it.
What was the first question again.
We don't have any concern there.
Netflix is a great service.
It's a great in-home service.
They've had other movies.
Netflix is very much a television network.
Not unlike what HBO and Showtime have done for years, they have some original product that goes out there.
It's not playing in the theaters, it's playing on Netflix.
We hope they have great success with it, but I don't see it as an issue relative to the theatrical business.
It's not one really that we talk about.
The second question was ---+
Oh yes, 3-D.
Okay, 3-D we feel like we really are the leaders here.
We've put a big emphasis on putting more light in the screen than any other theater chain.
We think 3-D has got a great 2016 coming.
There are a lot of movies coming in 3-D.
Our philosophy is to make sure that the consumer has the ability to choose a 3-D offering or a 2-D offering of that particular movie.
But we continue to be bullish on 3-D, and support the effort very much with highlight levels and quality in our theaters.
I think <UNK> will take the other ---+
I will just say with you last question just about our performance over the years, we attribute that highly to our intense focus on driving attendance, that philosophy that cuts through our pricing focus, our CapEx investment.
We spend more than our peers on maintaining our core circuit, which we believe that's fundamental to keep people coming back.
We also are supplementing our circuit where it makes sense with a lot of these enhanced concepts, repositionings, as we've obviously talking about when it makes sense.
All that becomes additive, but it all stems back to a philosophy on high-quality experience, attendance driven, and maintaining your core circuit, as well as the new builds and organic efforts that you're doing.
You bet.
<UNK>, the short answer to that is that they're very comparable as it relates to a return on investment on EBITDA margin.
That's how we evaluate the investments go-forward.
Yes, very similar.
Thanks.
Thank you very much for joining us this morning.
We look forward to speaking with you again following our first quarter.
Thanks again.
Thanks, everyone.
