In a move that surprised many in the movie industry, luxury cinema chain iPic filed for Chapter 11 bankruptcy this morning and announced it is pursuing either a financial reorganization or a possible sale of the circuit.
iPic indicated in the filing that “the financial restructuring will allow the company to further improve and enhance its theaters and dining experiences, continue to provide an unparalleled guest experience that is evidenced by the over 2 million iPic Access loyalty members, and continue with its expansion plans.”
The circuit currently operates 16 locations in nine states and has expansion plans for several more in the coming years. CEO Hamid Hashemi, who previously founded the Muvico Theatres chain, began iPic in 2007 and has grown the chain from its infancy, purchasing the Village Roadshow chain and transforming it into the circuit at the forefront of the luxury cinema experience.
While the company avowed it would explore restructuring options, what is especially intriguing about the filing is its proclamation that it is actively exploring the sale of the chain. The court filing indicated that several entities have been granted access to the circuit’s financial data.
It would not be surprising to discover that one of those companies might be Netflix. When Landmark Theatres was put up for sale last year, both Amazon and Netflix actively kicked the tires on a possible purchase, striving to secure a theatrical footprint through which it could release its films. At the time, I mentioned in a Forbes article that it was a curious approach as Landmark already played most Netflix films, such as this past December’s multiple-Oscar winner Roma. Why they would want to buy a chain that was already exhibiting Netflix content was baffling.
So far this morning, the name Netflix is the one on most industry observers’ lips, and if the Landmark purchase was head-scratching, then the purchase of a circuit chain that has even fewer locations would be even more peculiar. Perhaps the fact that Netflix already has a marketing partnership with iPic is the genesis of these rumors. For example, if you drive past the iPic Westwood, you’ll see an enormous vertical billboard on the side of the theater not for a current or upcoming film but for Netflix content.
To me, what would make more sense is if an entity such as Amazon or Apple might dip their toe into the exhibition waters. Amazon has hinted that their existing release strategy of adhering to the 80-to-90-day release window might be up for debate. Having their own exhibitor in which to feature their content, especially around awards season, might be extremely beneficial. The same goes for Apple.
But it would behoove any company interested in the circuit to do their due financial diligence. iPic was launched as a luxury cinema brand that would appeal primarily to adults 21 and over. However, with Disney garnering a larger and larger market share the industry can expect more films that appeal to the under-18 crowd for whom iPic has little interest. Five of the top ten films so far for 2019 are films geared toward children, including the aforementioned Lion King, Toy Story 4, and Aladdin, along with the latest installments of the How to Train Your Dragon and The Secret Life of Pets franchises. In both 2017 and 2018, only two of the top ten films for the year were family offerings.
With this shift toward family fare, it’s essential to note that tickets for children at some iPic locations can reach $18-23. That ticket price may be acceptable for a couple on an evening out, but a parent taking their two kids to see Lion King could drop close to $100 before even entering the auditorium. The Korean band BTS has a special event cinema showing this coming Wednesday of their Bring The Soul: The Movie film. The AMC Century City, just down the street from the iPic in Westwood, is showing the film at a ticket price of $15. At the iPic, the cost is $32. It’s not difficult to figure out which theater a parent will take the BTS fan in their family to.
Get the popcorn ready because things are about to get interesting in the movie business.