An Old Industry In New Era

People Don't Like Going To The Movies Any More! This article written about five years ago in 2005 summarized the disastrous situation the 100+ year old movie industry was in.  No it was not the bad economy because the Financial Tsunami did not take place until 3 years later.  On the contrary it was at height of the real estate bubble and people are enjoying the excess cash generating from the rapid rising home equities.  And was people simply stopped watching movies?  Not likely with mega hits in that year including Star War III, Naria, Harry Potter, War of the Worlds and King Kong.  


So what happened?  The blame goes to digital revolution - the same thing that shoot down Blockbuster and the brick-and-mortar video rental industry.  Although some people still go to movie theater to enjoy the giant screen and surrounding sound experience, more and more people choose to wait a little bit for DVDs or digital downloads or streaming as they found no particular interest to go to the cinemas.


Fast forward 4 years after in 2009 and the entire stock markets were in the middle of the one of the greatest financial storm and the public listed cinema operators such as Carmike Cinemas (CKEC), Regal Entertainment Group (RGC), Cinemark Holdings (CNK) were trading at multi-year low of $1.3, $9.4 and $7.12 respectively.  The year saw the recovery of the stock market and also one of the most anticipated movies of all time - Avatar.  The James Cameron mega hit not only achieved huge success at the box office, the movie introduced new technology to the movie industry that would spark new interest for people to go to the movie theater - just as sound and color did in the early 20th century.  


Since then 3D becomes the main weapon for Hollywood to bring audience back to movie theater with subsequent 3D movies such as Shrek Forever After, Toy Stroy 3 and most recently Resident Evil: Afterlife 3D.  And how about the stock price of the movie theater operators?  As of today, CKEC is trading at $7.43, CNK at $15.91 and RGC at $12.29.  So you can count on these public traded cinema operator to keep bringing more upside.  Plus the recent insider buying of CKEC probably also prove the potential uptrend.