If you’re a movie lover, you now paying more cash to see your favorite flicks. Effective last weekend, many theater operators will charge up to 26% more per ticket to see the latest film releases. The rate hike isn’t just relegated to one theater operator or one major city. The ticket price increases will take effect in markets across the country in theatres owned by Cinemark Holdings (CNK), Regal Entertainment Group (RGC) and privately-held AMC Entertainment.
It should come as no surprise that theater operators now think it is safe to raise ticket prices. The move makes perfect sense, simply because of strong consumer demand. The success of 3-D mega hits like Avatar and Alice in Wonderland have basically given theaters the green light to charge a few dollars more per ticket. The strong movie going demand has by some estimates pushed 2010 box office receipts up nearly 10% year-to-date.
Now, if you’re a frequent moviegoer, your first reaction to the ticket price increase may be anger. After all, a ticket to see a 3-D film already cost about $11.50 depending on where you live. With the new price hike, that ticket now is going to cost you $14.50. But rather than getting mad at the ticket price hike, why not take advantage of it by buying the stocks set to benefit from the boom at the box office?
Two of the logical winners here are the aforementioned Cinemark Holdings and Regal Entertainment. Another theater operator also likely to see a nice revenue surge from the boom at the box office is Carmike Cinemas (CKEC). But theater operators aren’t the only winners in the box office bonanza.
The company that makes the technology that produces these popular 3-D films also are poised to profit. Thanks in large part to the success of Avatar, IMAX Corporation (IMAX) recently posted fourth-quarter revenues that increased by an astounding 98% to $54.2 million.
Finally, there are the studios churning out those mega-hit 3-D movies, including DreamWorks Animation SKG (DWA) and its new 3-D release, How to Train Your Dragon, Disney (DIS) and its 3-D hit, Alice in Wonderland and of course, News Corporation (NWS) and the quintessential 3-D blockbuster, Avatar.
So, rather than being angry at how much more you have to pay for a movie ticket this weekend, why not just sit back, enjoy the flick — and take advantage of the box office boom with the these blockbuster stocks.
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