Good day, and welcome to the Cineplex Inc. First Quarter Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Pat Marshall, Vice President of Communications and Investor Relations.
Please go ahead, Ms. Marshall.
Good morning. Before beginning the call, we would like to remind you that certain statements being made are forward looking and subject to various risks and uncertainties. Such forward looking statements are based on management's beliefs and assumptions regarding the information currently available. Actual results could differ materially from those expressed in the forward looking statements. Factors that could cause results to vary include, among other things, adverse factors generally encountered in the film exhibition industry risks associated with national and world events discovery of undisclosed material liabilities and general economic conditions.
I'll now turn the call over to our President and CEO, Alex Jacob. Thank you, Pat. Good morning, and
welcome to Cineplex Inc. Twenty sixteen first quarter conference call. We are pleased you could join us today. I will begin by providing a brief overview of our first quarter results as well as a summary of our key accomplishments during the period. Then we will take a look at some of the most anticipated films of the summer film slate.
At the conclusion of my remarks, our Chief Financial Officer, Gord Nelson, will provide an overview of our financials, and then we will follow-up with our question and answer period. I am very pleased to report that Cineplex achieved record first quarter results for 2016. Total revenue increased 30.8% to $378,900,000 and adjusted EBITDA increased 42% to $57,100,000 both first quarter records. Additional first quarter records were established for box office revenue, food service revenue, BPP and CPP, and we established an all time quarterly attendance record of 20,600,000 theater guests. The strong performance of the film slate of success in food service as well as the additional revenue derived from the consolidation of Cineplex Starbursting following our acquisition last year contributed to the record first quarter.
Media revenue continued to grow this quarter, largely due to revenue from Cineplex Digital Media. Gord will share the balance of our record setting first quarter results with you in a few moments. Now I will take time to highlight some of our key accomplishments during the first quarter. The Force Awakens continued to perform well in January, becoming the highest grossing film of all time in North America. Other top performing films during the quarter included Deadpool, Zootopia, The Revenant and Batman ever Dawn of Justice, which recorded the highest grossing March opening weekend of all time.
These successes reinforce the message that theater guests want great movies for all demographics year round and will come up in large record breaking numbers to support them. In March, we opened Cineplex Cinemas Marine Gateway and VIP in Vancouver, British Columbia. It is a two story 11 screen theater with seven traditional auditoriums and one ultra AVX auditorium with D BOX Motion seats on the First Floor. The Second Level is home to Downtown Vancouver's first VIP cinemas with three licensed auditorium and a licensed lounge. Later this year, we will open our eight screen Cineplex Cinemas North Barrie and 11 screen Cineplex Cinemas Kitchener and VIP, both in Ontario.
We continue to enhance and expand our premium offerings and recently announced plans to significantly expand our existing T Box footprint of 44 auditoriums by an additional 23 auditoriums. Subsequent to the quarter end, we also announced a new partnership to add 4Dx immersive theater technology to Cineplex Cinema's Young Dungass and VIP in Toronto this summer. The 4Dx auditorium features specially designed motion chairs and add special environmental effects like wind, mist, and scent, all working together with the action on the big screen. This is a first in Canada, and we are pleased to provide another exciting entertainment choice for our theater guests. Moving on to Media.
This area of the business comprised of Cineplex Media and Cineplex Digital Media continued to experience growth during the quarter. Cineplex Media revenue increases were driven by growth in the automotive category as well as our new media initiatives, including world gaming and increased revenues from our digital poster cases, web mobile and interactive media zones. Cineplex Digital Media also experienced increased revenues year over year as their client base continued to expand, resulted in increased project installations and advertising revenue. And as previously announced, Cineplex Digital Media expanded its client base by becoming American Dairy Queen Corporation's endorsed provider for in store digital merchandising solutions for Canada and The U. S.
Looking at amusement, gaming and leisure, we continue to move forward with the launch of The Rec Room, Canada's premier social entertainment destination and announced our first Toronto location at the historical John Street Roundhouse across the street from the CN Tower. Plans are already underway for a 2017 opening. Our first location to open is our South Edmonton location, which is under construction and set to open later this summer. During the quarter, Cineplex Starbursting acquired the remaining 20% of Brady's Starburst Limited that it did not previously own. Brady's Starburst is one of the largest distributors of amusement and vending equipment in The US.
Moving to SCENE. Our SCENE loyalty program continues to grow. During the quarter, we added another 200,000 new SCENE members. This brings our total as of 03/31/2015 to more than 7,500,000 team members. Now let's take a look at some of the films for the summer.
Whether you're after action and adventure, romantic comedy or an animated children's feature, there are movies for everyone. We've kicked off an exciting second quarter with The Jungle Book, which continues to do well in our theaters. On May 6, we relaunched Civil War in three d. On May 20, Angry Birds, the movie that is based on the very popular app, opens. Then we end the month on May 27 with the launch of Apocalypse and Johnny Depp starring in the sequel film, Alice Through the Looking Glass, also in three d.
On June 3, the Teenage Mutant Ninja Turtles are back with Out of the Shadows, followed by the action adventure film, Warcraft. On June 17, the highly anticipated sequel to Finding Nemo hits the big screen with Finding Dory in three d. On June 24, two decades after the first Independence Day film invaded theaters, we have Resurgence in three d. July's film lineup looks strong with the Canada Day launch of Steven Feelberg's The BFG or the Big Friendly Giant. On July 8, I think every pet lover in
the country will want to
see the secret life of pets as it finally shares with us what our pets really do when we leave them on their own. On July 15, we have the return of the cult classic Ghostbusters, this time featuring all female comedic cast. On July 22, Ice Age Collision Post in three d will be sure to please families, and Star Trek Beyond is sure to satisfy the adult and Trekkie fans alike. We end the month of on on July 29 with the launch of the action thriller Jason Bourne with Matt Damon starring. On August 5, Suicide Squad in three d jumps from the streets of Toronto where it was filmed last year to the big screen, and there's lots of good buzz about this movie.
Then on August 12 is the family fantasy adventure film Peach Dragons starring Bryce Dallas Howard and Robert Redford. On August 19, the classic film, Ben Hur, returns to the screen in three d, and we end the month with the animated comedy from Andy Samberg entitled Stalks. As you can see, the summer truly does have something for everyone. Before I turn the call over to Board, who will provide an in-depth overview of our financials, we were pleased to announce a 3.8% increase to our dividend from $1.56 to $1.62 per share on an annual basis. The increase will be effective with the May 2016 dividend and payable in June 2016.
I'm proud to say that Cineplex has increased its dividend every year since the company converted to a corporation in 2011. Finally, I would like to take a moment to congratulate Board Nelson on being named Canada's CFO of the Year for '16. This prestigious award is presented annually to honor senior financial leaders who have made significant contributions to business in Canada while demonstrating quality, insight and integrity. Those attributes and more certainly describe Please join me in congratulating Gord for this well deserved recognition. With that, I'll turn the call over to Gord, Canada's CFO of The Year.
Thanks, Ellis. I am pleased to present the first quarter financial results for Cineplex Inc. For your further reference, our financial statements and MD and A have been filed on SEDAR this morning and are also available on our Investor Relations website at cineplex.com. As Ellis mentioned, Cineplex reported first quarter records for all revenue categories as well as for BPP, CPP and adjusted EBITDA. Attendance was an all time quarterly record And total revenue increased 30.8% to $378,900,000 and adjusted EBITDA increased 42% to $57,100,000 Cineplex's first quarter box office revenue increased 23.5% to $192,600,000 as compared to $156,000,000 in the prior year as a result of an attendance increase of 17.4% and a VPP increase of 5.2% to $9.36 a first quarter record from $8.9 in 2015.
Our premium product percentage in the first quarter increased to 40.4% of box office revenue in 2016 from 25.3% in 2015. The impact of premium priced product on the average ticket price was 1 point dollars 0 for this quarter as compared to $0.57 in the prior year, primarily due to the success of three d product, with three of the top five films in 2016 being released in three d as compared to none in the prior year. Foodservice revenue increased 23.4% to $112,000,000 as a result of the higher attendance and a 5% increase in concession revenue per patron to $5.44 a first quarter record. The CPP growth was primarily a result of higher average transaction values as a result of expanded offerings, including those from Cineplex's VIP cinemas. Total Media revenue increased $4,000,000 or 13.7% to $33,100,000 for the quarter.
Cineplex Media revenue, which is primarily theatre based, increased 5.4%. Cineplex Digital Media revenue increased 32% with increased project revenue for recently announced new clients, including A and W and American Dairy Queen, in addition to growth in existing and new business opportunities, including advertising revenue from the Tim's TV network deployment and the Oxford Properties Group digital installations. With the acquisition of the remaining 50% of the equity of Cineplex Starburst Inc. On October 2135, we began consolidating their results during the 2015. Other revenue includes $23,300,000 of gaming revenue arising as a result of the consolidation of CSI's results.
During the first quarter, CSI acquired a 20% interest in its indirect subsidiary, Brady Starburst, Inc, which it did not already own for $400,000 Turning briefly to our key expense line items. Film costs for the quarter came in at 55.7% of box office revenue as compared to 51.4 reported in the prior year. The increase in the film cost percentage is a result of a significant increase in box office revenue and the concentration of the box office revenue from the top five films in the current period. These five titles accounted for 49.3 percent of box office revenue as compared to the top five Q1 twenty fifteen titles, which represented 34.2% of box office revenue. The top four films in the 2006 each outgrossed the top title in 2015.
These top films tend to have higher settlement rates than the other films in the slate during the strong performance. Cost of food service for Q1 twenty fifteen was 22.6% as compared to 21.4% in the prior year as a result of the mix of food offerings, including VIP offerings. Other costs of $189,400,000 increased $38,500,000 or 25.5%. Other costs include theater occupancy expenses, other operating expenses and general and administrative expenses. Theater occupancy expenses were CAD52.7 million for the quarter versus a prior year actual of CAD51.1 million.
Other operating expenses were CAD117.6 million for the quarter versus a prior year actual of CAD80.9 million, an increase of CAD36.7 million. Major reasons for the increase include the increased record business volume and the consolidation of CSI and specifically include an increase of $20,100,000 due to the consolidation of CSI, an increase of $1,700,000 due to the impact of new and acquired theaters net of disposed theaters, higher same store payroll of $4,400,000 due to higher business volumes as well as minimum wage increases in certain provinces higher amusement, gaming and leisure costs, excluding CSI, of CAD3 million due in part to the addition of World Gaming Network acquired in the 2015 higher three d royalty fees of CAD0.7 million due to higher three d attendance during the quarter higher credit card fees of $500,000 due to increased online ticket sales and general operating cost increases due to higher business volumes. G and A expenses were $19,100,000 for the quarter, which were $200,000 higher than the prior year. Interest expense of $4,800,000 was $900,000 lower than the prior year amount of $5,700,000 Contributing to the decrease was a $1,000,000 decrease in non cash interest, mainly as a result of the full accretion of the EK3 earn out in 2015.
The company recorded tax expense of $5,500,000 during the 2016, comprised substantially of current tax expense. Our blended federal and provincial statutory tax rate currently is 26.8. Net CapEx for the first quarter was $28,700,000 as compared to $26,200,000 in the prior year. We continue to estimate that net CapEx will be approximately $100,000,000 for 2016. Subsequent to the quarter and taking advantage of the favorable credit and interest rate environment, we entered into an amended and restated credit agreement, increasing our borrowing capacity to $550,000,000 of which $400,000,000 is a revolving facility.
Record first quarter revenue contributed to our strong Q1 results.
We continue to remain comfortable with
where Cineplex Inc. Is positioned today. Our strong balance sheet and low leverage ratio allows us to continue to invest in future growth opportunities for the company and benefit from future strong film product. As Ellis mentioned, we are pleased to announce the 3.8 increase in the annualized dividend to $1.62 effective with the May dividend to be paid in June 2016. That concludes our remarks for this morning.
And we'd now like to turn the call over to the conference operator.
Thank you. Ladies and gentlemen, the Q and A session is now open. Please queue up for questions. Our first question comes from the line of Paul Steep at Scotia Capital.
Gordon, maybe you could talk just a little bit about the trending you've seen in Western Canada, Alberta, in particular, just around CPP and how that's sort of played out over the last few months.
Sure. You know, as we've said over, you know, the course of the last, like, seven, eight years or so in times of economic, struggles, people still go out to move either their black box office has increased in the last nine recessionary periods. So as expected, at box office, the results are still very strong out in Alberta. We do see some minor softening in the spending at the concession stand, but I wouldn't say characterized as significant at this point.
Okay. And on CDM, maybe just talk a little bit more about the pipeline there. It was nice to see the Dairy Queen deal locked down. How does The U. S.
Pipeline look, guys?
Yes. So as we said,
we opened an office in The U. S. About one years point ago. We were very encouraged about the prospects and the opportunities and the processes that we're involved in The U. S.
We were happy to announce the Dairy Queen agreement in the first quarter and our outlook on additional new business going forward is still very strong.
Great. I guess just one last one, and I'll pass the line. There was a lot of noise in the last month at CinemaCon in particular around the premium windowing strategy. Maybe you could give us your thoughts, Ellis, as to how you'd view that or if it's any different than the last couple times we've been down this path?
Yes, Paul. It's a good question. And as you know, we always are faced with different challenges in the exhibition business, but we can't forget that this is a $38,000,000,000 worldwide and an $11,000,000,000 North American business. And, you know, Canada is close to a billion dollars of that. And the studios themselves are not going to be walking away from these businesses.
And as we heard from, you know, some of the biggest filmmakers there like James Cameron and Christopher Nolan that the best place to see a movie when it's first released is in a movie theater. And I don't think, you know, that is gonna change as the market outside of North America continues to grow significantly and the desire for Hollywood movies continues to evolve in other parts of the world. So to basically cut short the answer, we at Cineplex are committed to protecting the theatrical window, but we are always looking at different ways of working together with our distribution partners.
Great. Thanks, guys.
Our next question comes from the line of Drew McReynolds at RBC Capital Markets. Please go ahead.
Starting with you, Ellis. Just in terms of the big picture trend towards greater box office concentration, just would love to get your updated thoughts on whether you believe that is a firm trend that's underway across the industry and ultimately, how you think that impacts your business?
That's a great question. As we saw in the first quarter, we had a significant amount of the box office coming out of the big five movies that were released, which is great news in the fact that there's a real strong desire for people to come and have the experience in the theaters. And we continue to raise the bar as it comes to Ultra AVX premium large format, our three d, D box, IMAX, four d x, three IPs. We've got a lot of different choices for people. The key thing is, I think, what you're seeing is basically, the studios and our suppliers looking for the bigger, films to deliver the process.
But what's interesting is that CinemaCon, we saw basically presentations from newer studios like SPX, which is committed to delivering the middle range movies. And we even saw Amazon that's now also looking at delivering movies and keeping within the required theatrical window. So as these studios move in one direction, I think you're going to see a number of these others come up with movies that will service the, you know, the smaller budgets and box office in the 50 to a $100,000,000 range.
Okay. That's that's interesting. Thanks for that. And also just following up on the the tournament that finished up in March on the esports side. Just wondering, you know, having gone through it now, just some of your kind of key takeaways, positive or negative from that experience?
And then what the road map looks like for the rest of the year? And then final question, maybe for you, Gord, just in terms of the ramp up and installations within CDM, can you help us for modeling purposes model that perhaps for the rest of the year, least kind of in the next couple of quarters? Thank you.
So, Gord handed out the big check, so he's going to tell me that.
Yeah. I mean, look. We're creating something that's, sort of unique globally in in terms of creating national tournaments, which consists of both online play, and then location based play culminating in the final. So it's very exciting from our perspective to launch Call of Duty as our first tournament. The response was remarkable.
The media interest, the sponsor interest was very strong. The participant interest, was also strong. So the title went went extremely well from a logistical perspective. We are now offering our second title right now, which is Street Fighter five, which semifinals occurred on Sunday. And so we will look to launch what we'll call sort of national tournaments on a quarterly basis.
And we're going to look to do some one off type titles and one off tournaments also throughout the year. And as we look at this platform, as I described, it's kind of unique in that we're combining online and physical based play. Is we're looking to extend that into other geographies through relationships with some of our other partners and peers throughout the world. With respect to your question on CDM and the rollouts, you know, as we've described before, certain clients look to roll out throughout their installation base very quickly, and other clients will take a number of years to roll that over their base. So I would say once you get involved in sort of franchise type operations, you're probably talking about something that's a little bit of a slower rollout program than something that might be a corporate owned entity or something like a financial institution.
Our next question comes from the line of Derek Lessard at TD Securities. You
did talk about just to go back to the world gaming. You did say that it did contribute to the digital media uplift Just wondering if you're able to add some color to the materiality of that?
So it was in the it was
actually in the media, so more traditional. The tournament was based in the theaters. So it's in the media line as opposed to the digital media line, just so you know. And it was enough to warrant a discussion in the MD and A. We're not quantifying the math at this point in time.
Okay. Fair enough. And the 1.2% increase in the concession cost percentage in the quarter, just wondering if that's something you guys are typically able to pass on? Yeah. I mean, we always monitor kind of cost.
And first and foremost, you you need to remember that a portion of that increase is related to, increased VIP sales. So and sorry. Concession sales in the VIP auditoriums. So those are typically higher priced items at lower margins. So so you've got a bit of a a mix shift going on contributing to that higher cost.
So that's, in in that case, that's not something you would look to that's not a cost to be passed on to the consumer. Now there is a small element of food cost pressure that we're just seeing and and everyone has seen related to The U. S. And the Canadian dollar. So that could be an item that we may look to in the future passing on to consumers.
Okay. Thanks for that. And just maybe just one final modeling question. In terms of the new credit agreement, I'm just wondering in terms of the what should we be modeling for the effective interest rates going forward? Yeah.
I mean, look at this. We have an existing swap in place, which, goes till 02/2018, and so that's noted in the MD and A. But, yeah, the all in cost will be approximately around 2.5%.
Our next question comes from the line of Rob Goff at Echelon Wealth Partners. Thank you very much, and good morning. My question would go back to the esports again, just trying to dive a little bit deeper into that business model. If you could talk to how you are seeing the the sponsorships. I know Sony is there and Asus is there.
Are there other opportunities? Could you also talk to the extent that it's becoming more of an online business as opposed to in theater, how that balances? Or you made a reference to other geographies. Is there anything else you could provide on that? Thank you.
Yeah. So first on the sponsors, you know, in addition to the ones that you noted, Plantronics was the sponsor as well as EV games during the first event. And, you know, I think the one sort of key thing about sponsorship and and in this space is we just held our first event. And a lot of sponsors, you know, wanna see a little bit of a track record and wanna see what these events are are all about, before they commit to their sponsorship dollars. So we were extremely encouraged by, you know, the high level of interest by the the sponsors that we've named to get in there off on on the, you know, on the first event.
And so we just continue to see peak interest going forward, so we expect that to grow, with future events. With respect to the question of online versus the Canadian Championship Series, which is a combination of both online and location based play, It's with the press and the media surrounding the Canadian Championship Series, we've also seen the traffic grow on purely the online aspects of the site. So that's very encouraging, too. And then lastly, your question on extending into other geographies, is as an exhibitor and looking for alternative uses for our auditoriums and for potentially non peak periods, esports was high on our radar just as it is on other exhibitors globally. So we now have a platform and a process in place that we could potentially share and partner with other exhibitors.
So that's where we see an opportunity to potentially grow globally.
Our next question comes from the line of Adam Shine at National Bank Financial.
Ellis, when I look to the MD and A and I see the evolving revenue mix, maybe you can speak to any particular target objectives and I'll give you a bit more context. I mean, we've seen media and other as a share revenues move over the last four years from about 9% to about 20%. Obviously, there are a number of other initiatives on the way, in particular, The Rec Room as well as some of the other media initiatives you're pursuing. Can you speak to maybe an objective over the next five years or perhaps a longer term target goal for some of these other initiatives?
That's a great question, Adam. And our focus, as we said prior calls, is to continue to diversify our business model and the less reliance on Hollywood, where we have the peaks and valleys depending on the product that's out there. And media is one area that we are focused in and we'll continue to grow both on the conventional media and on the digital media side, both in Canada and The U. S. And move beyond that as we develop the skills, expertise, the client base.
On The Rec Room, the gaming and amusement side, we see a great opportunities there because, again, it's using our infrastructure and what we do best in servicing our guests. And once the first few start to roll out, we will see the benefits of that contribution to our overall EBITDA. So it's hard for me to target a number, but our continued focus is over the next three to five years to deliver, you know, a good chunk of our EBITDA from non Hollywood dependent product. And you're going to see costs related to that as we continue to build this business into the future.
Okay. I'll I'll I'll push you further on that at at a later date in terms of the target. But maybe one quick question, and it might be really just a a timing issue, but just as it relates to The Rec Room in Edmonton being pushed out from the spring into later in the summer as you alluded to in your opening remarks. Anything to highlight there?
No. It's basically one where we had a clean slate and we started from scratch. And it's our first location, and we may have to make sure that it is awesome when it opens. And that's our major focus. I don't think this is a rush to the finish line.
It's a rush to make sure that it's the best.
Super. Thank you very much.
Our next question comes from the line of Aravinda Dellapiti at Canaccord Genuity. Please go ahead. Good morning. Thanks for taking my question. I was wondering, Alice, if you could sort of maybe revisit some of your base pricing plans.
I just wanted to find out if you were at a stage where you're starting to experiment with different pricing models for different periods of time more dynamically around weekends, around sort of the heavier seasons, etcetera. Just wanted an update on that. We continue to look at our pricing models and actually have done some in-depth research on where we stand as it relates to pricing. We do have a lot of pricing options, but those are mainly driven by the experience that we are offering our guests. And that seems to resonate very, very well.
And if you look at our premium large format, Sarvinda, we have some of the best premium large formats in the world today when it comes to the box office grosses on the opening weekend of films. So even though we may represent only, you know, six to 7% of the box office in North America, we have 70% to 80% of the PLFs on whole thing weekends. So for us, it's all about delivering value for our guests and providing them with that experience, whether it's VIP, whether it's PLF, whether it's 4DX and IMAX and three d, all of those areas. As far as the base ticket price and dynamic pricing, we will continue to look and evaluate that whole potential, especially when it comes to the big blockbuster movies. But at this point, we haven't implemented anything in that direction.
Okay. Great. A quick question for Gord. I know we always talk about the other operating expenses item, not surprisingly, loss of inflation given the level of activity. But as we look ahead, I mean, obviously, we have the CSI piece, which is going to be an incremental piece for a few more quarters and the WGN acquisition.
Excluding that, can we, cohort, maybe expect sort of a lower single digit inflation in that line item?
Yes. We indicated we typically indicate the payroll. We segregate the payroll amounts. When we look at the increase there, roughly half in the first quarter was sort of volume and half of some of wage increases. So yes, would say going forward, key driver is is the business volume.
And I mean, there's such a huge increase in business volume in the first quarter on a year over year basis. So I know that made it challenging from your modeling perspective in terms of the overall costs. But yes, you should have kind of marginal inflationary increases in the costs. And then that payroll item, which we segregate, will vary more closely with the business volume changes. Thank you.
Our next question comes from the line of Robert Peters at Credit Suisse. Please go ahead.
Hi, thanks for taking my question. Gord, maybe just on CDN, just for kind of modeling purposes, can you give us an update on how many locations you have now? I believe it was 10,000 at the end of the year.
Yeah. So it's
I'm I'm gonna say about 10,300 or so at the end of the first quarter.
Thank you very much. And when we look at the rec room installation pace, maybe just to build on the question around the first location, are we still on track for the second location in Calgary opening this year? Or I know that the Ontario location is gonna be a twenty seventeen number. How should we kinda think about the install pace going forward?
I think you've got to look at the Calgary and the Toronto location as being a 2,017 early openings.
Perfect. Thank you. And maybe talking on the 4DX, that was an interesting announcement. I was just wondering, terms of kind of setting that up at the location and getting it installed, in terms of the auditorium, is that just a traditional auditorium that's going to be converted? Or how should we kind of think about that in terms of maybe potential other retrofits at other locations?
Well, it's the existing auditorium, but it's totally a retro retrofit. And, you know, you take a 300 seat auditorium, and you end up with about 88 seats. And these are basically special seats, which are paused and, you know, the seats move with the movie. And there's also, as I said, wind, rain, and air pocket effects,
and, you know, there's up
to 15 different effects as part of the experience. And we are the third one in North America. There are two others, and this is the first one in Canada.
Perfect. Looking forward to trying it out myself. Thank you very much.
Great. Thank you. We will take our next question from the line of Ben Mogul at Stifel Nicolaus. Please go ahead.
Great. Good morning. Thanks for taking my question. First of all, Gord, congratulations. Very, very well deserved, clearly.
Yeah.
I wanna go back to Paul's question about screening room. So, you know, the demographic that a lot of us on this call are probably in this demographic that they're targeting sort of young families, don't go to movies as often as they'd like to. You guys are part of AMC on other Paramount sort of early window experiments. AMC has clearly, dovetailed a little bit from the other group in terms of going down this path here right now. When you look at the world, do you see a a world where there's a possibility where you can have basically both the ability to have sort of your window preserved, but also sort of participate in some of these digital technologies?
It's kinda curious if you view it sort of as a either or or anything like that.
Look, Ben, we have been in the forefront when it's come to innovation and as it relates to the movie technology, and we were the first one in the world to do super ticket, which basically allows you to download and own the movie and then also watch the movie on the ESP windows. So the critical issue becomes is I don't think the studios that they all want to trade dimes for nickels, and the movie theater is still the engine that, you know, drives the train as far as launching a movie. So, yes, will there be experiments? We will always look at opportunities, but that's not to say that we will go with one model or the other. And we look to our studio partners to work together with them, and we did participate in the Paramount experiment as part of it.
And then all the other sort
of demographics that I know
folks are are focused on a lot, which the millennials, and there's been a lot of stats from the NIPAA on them going a lot less the theater than they did, you know, five, ten years ago. When you look at things like ADAM tickets, sort of group buying tickets, incorporating social media, etcetera, how do
you think those fit in? Well, we are in a different place, Ben, because we spent a lot of time, energy, and money in building up, number one, a very strong loyalty program. We own our own ticketing app, and we have a great relationship with our guests. Not to say that Adam doesn't have, you know, good technology, and we have had discussions with them. But we have to look at Cineplex on the whole website and where we sit and how we process our guest tickets all the way through.
And to be content and data are critical.
Sure. Okay. That's great. Thank you, Alex, for both of that.
Thank you. We'll now take our next question from the line of Kenric Beig at Raymond James. Please go ahead. Thank you and good morning. Ellis, I wanted you to speak to the advertising revenue trends, specifically the sort of the mixed impact with advertisers in a course of the life of what we've just had.
And then maybe to one of the earlier questions, with the increased or more concentrated sort of slate, let's call it, out of the studios, how that is either impacting your advertiser mix or how advertisers are thinking about you as a channel? Well, the advertising you know, continues to be strong from a theatrical perspective and also all the other mediums that we offer all the way from our magazine, is, you know, one of the top read magazines in Canada in addition to our websites, our loyalty programs and our mobile app, which has now been downloaded by more than 14,500,000 Canadians. So when you look at it, in the first quarter, the automotive was a huge part of our, you know, advertising at the theater level, and then we've got others, including financial services, the government, and the the film studios themselves. It's a great medium because you've got a captive audience. And with things like Time Play, we've even added to the interactivity between us, the guest and the movie theater screen.
So some of the demographics actually come to the theater earlier to play Time Play on the big screen. So that part of the business continues to be strong and continues to grow moving moving forward. And just a sorry. Just on a follow-up. Shift from the traditional media to cinema and out of home, which we are seeing on an ongoing basis that, you know, agencies and advertisers move their budgets from, traditional media over to, theater and all of the other assets that we have to offer.
There are no further questions at this time. I'd to turn the call back over to Mr. Jacob. Thank you all for joining us this morning, and we hope to see you all at our annual meeting next Wednesday, May 11 at 10:30AM at Cineplex Cinemas, Young Vandas and VIP. Our 4DX won't be ready, but you can see what's happening.
Thank you. This concludes today's call. Thank you for your participation. You may now disconnect