Canadian Financial Company Warns Cineplex Could Go Out Of Business Within The Next Decade

As video streaming becomes more popular, many people are finding less of a reason to head out to theatres. With major companies like Amazon, Apple and now even Walt Disney Co. starting to develop their own original content, movies could end up going "straight to stream" in the future and "[skip] the theatrical release altogether."

The Motley Fool, a multimedia financial services company, predicts that Cineplex could see its demise amid the intensifying streaming competition.

"Right now, Cineplex is slated to become a casualty of a content war between many behemoths," says Joey Frenette, a staff member of The Motley Fool. "Over the next decade, things won’t end up well for Cineplex, unless it’s able to successfully adapt to a general entertainment company which can produce its own premium content."

Frenette explains that Cineplex has a great deal of growth to do, especially as the entertainment landscape continues to change. It needs to diversify beyond its "box office and concession segments" and start focusing on what's relevant now — not eSports, TimePlay or hockey events, but original content.

"With the rise of straight-to-stream movies and the potential for AR or VR video-viewing experiences, I think the secular decline of Cineplex’s theatre business will accelerate at a quicker rate over the next five years."

Cineplex could relieve some of the growing pressures with a subscription-based membership where customers can pay a monthly fee to watch as many movies as they like at the theatres, however Frenette thinks this is far from a solution as box office margins will still suffer.

He says the company's acquisition of other entertainment firms like Playdium and Topgolf is "a step in the right direction," but that Cineplex will eventually need to consider joining the original content revolution if it wants to survive.

Read The Motley Fool's full article here.