This Christmas season has seen the best of news and worst of news for Vista Group - the NZX-listed, Auckland-based company that dominates the global market for software for managing movie theatres, and marketing their wares.
First came the news that the first wave of vaccines, from Pfizer, Moderna and AstraZeneca, are effective and just weeks away.
But then came Warner Bros' announcement that it would offer every new movie on its 2021 slate for streaming at the same time it hit theatres, regardless of how vaccine distribution plays.
The US studio giant is wary that it will take months, at best, for widespread vaccine distribution. But it will also have had an eye on Disney's runaway success with its $9.99/month direct-to-the-consumer Disney+ service, which now has some 70 million subscribers streaming its content worldwide.
In August, Disney announced that its live-action Mulan remake, which had been set for theatrical release, would be available through Disney+ only from September 4 to December 4, with punters paying $39.99 extra to see it (it's now covered by the basic $9.99 subscription).
On a fourth-quarter earnings call in mid-November, Disney chief executive Bob Chapek refused to put a number on Mulan downloads.
The company would have needed some 33 million Disney+ users to stream Mulan to equal the US$1 billion that the studio can reasonably expect from its average cinema blockbuster (remembering that unlike cinemas, who around 50 per cent of a ticket, Disney's streaming service sees almost the entire box office go straight into its back pocket).
But there was also potential for its streaming-only jape to draw more sign-ups to Disney+, and all the ongoing revenue that entails.
And there's definitely been a surge on that front. Analysts have noted that the number of Disney+ members increased from around 57m from the time of the Mulan announcement to a recent 70m - and Disney's shares have surged from US$85 in April to a recent US$154.
So will vaccines eventually see a return to the same levels of cinema-going as before the pandemic? Vista chairman Kirk Senior said earlier this year that, ultimately, people are social creatures and will want to return to the communal, big-screen experience of a multiplex. Or will it be permanently crimped as studios, and punters, become acclimatised to the cheaper, more convenient streaming experience?
That's the $64,000 question (or the billion-dollar question, to give it Vista's 2019 market cap).
Investors are beginning to accentuate the positive.
While still a long way from their $5.84 pre-Covid high, Vista's shares recovered from their 96c trough to $1.49 in November ahead of the vaccine news - and have since pepped up to a recent $1.79.
An October 21 market update also helped. Vista said, "At the end of September 2020, between 70 per cent and 75 per cent of cinemas globally were open" and that NZ's September box office was up 50 per cent over August.
However, Vista conceded that some cinemas were operating on reduced hours amid thin content, or were subject to capacity restrictions. No attendance figures were given - although it noted China had recently enjoyed its second-highest box-office day on record, only slightly down from its record, set in 2019. Chief executive Kimbal Riley said, at the time, "While it remains hard to predict when the global cinema industry will 'return to normal', the rebound of moviegoing in countries where cinemas have reopened supports our belief that the industry will bounce back well during 2021."
Vista quickly battened down the hatches for a year or more of empty theatres as the coronavirus hit, slashing costs and raising $65m in April.
This past week, it's taken perhaps its first front-foot step since then, buying the 50 per cent of Cinema Intelligence it did not already own, for an undisclosed sum. Cinema Intelligence uses "artificial Intelligence-powered solution for forecasting, distributor negotiation, automated scheduling, and business analysis."
Vista chief executive Kimbal Riley says it will help cinema chains with forecasting, which is "More relevant than ever given the impact of the pandemic on the industry."
That's in keeping with one of the Vista' bosses key themes - that pandemic times require much closer management than willy-nilly boom times. Beyond Cinema Intelligence, Vista is offering new management features such as socially-distanced seating and kerbside popcorn collection.
Vista has been cautious in its outlook throughout and, like most tech companies, not offering any guidance.
This week, Riley also urged patience. Investors should not jump to any conclusions about how Warner's online push and other streaming services would play out.
He certainly wasn't.
From his insider's view of the audience, he could see a pent-up tidal wave of titles from the big Hollywood studios, which have been holding back new releases. But when they'll hit screens (or, who knows, streams) he can't say.
"I don't think my crystal ball extends to predicting audience trends for 2021 and beyond," he told the Herald.
"The availability is fantastic news. It will put a spring in the step of the industry in 2021 – in particular with content availability," the Vista boss said.
"[But] in terms of how content gets to consumers - each of the players in the industry – studios and exhibitors – is working through how to navigate their way through 2021, a year we suspect will be some kind of transition to a more settled 2022."
Vista tries its hand at streaming
Vista hasn't sat on its hands in terms of streaming. It's developed its own platform, ScreenPlus, in partnership with local developer Shift72 - whose directors include South Pacific Pictures founder John Barnett.
The idea is that cinemas can use ScreenPlus to stream movies to punters who are in lockdown - or simply prefer to view a title at home.
Vista's latest report only devotes one sentence to ScreenPlus and Riley did not want to go into further details this week, but ScreenPlus is up-and-running, if still in its very early days.
Early customers include three art-house operators in NZ: Academy Cinemas and Bridgeway in Auckland, and Deluxe in Christchurch - plus a Polish chain. Each puts their own badging on Vista's product.
The Herald signed up for Academy Cinema's streaming service and paid $4.99 to stream the under-appreciated local effort Dark Horse. The stream was smooth and stable, and it was a user-friendly experience - if relatively no-frills compared to the big streaming services. It was HD only rather than 4K (or ultra high definition a la Netflix, Amazon and Disney+, for example, and there was no Apple TV or Smart TV or other platform support - although content can be streamed from a phone, laptop or tablet to a big-screen TV via Google Chromecast).
There's a blizzard of online competition, of course, but on the local ScreenPlus-backed services you'll find some arthouse and local gems that might not be available elsewhere - or, even if they are, you might prefer to spend the money with a local operator than a multinational.
ScreenPlus has more to offer exhibitors, with its support for transaction-on-demand technology (or paying as you go for movies rather than the usual all-you-can-eat for a monthly fee approach favoured for most streaming), and its focus on anti-piracy and anti-password sharing measures (there are watermark options, and a focus on restricting on one account streaming concurrently to many devices, for example). Still, it enters a market where there's no shortage of white-label options for anyone who wants to host their own on-demand service.
The death of cinema - again
In May, with Vista's shares still wallowing near the $1 mark as the world laid low, Craigs Investment Partners' analyst Stephen Ridgewell upgraded the stock to over-weight.
Today, Ridgewell told the Herald he still had his overweight rating - although with its recent runup, Vista is now nudging his 12-month price target of $1.90.
Yesterday, in an update to clients, Craigs noted the tension between the "vaccine rally" and Warner tilt toward streaming all new releases immediately in 2021.
"A narrowing of the (pre-Covid) 12-week cinema window seems inevitable to us," the wealth manager said.
"However, talk of the demise of the significant cinema industry seems highly unrealistic," it added, referencing a New York Times article (published on Herald Premium) that went through a greatest hits of developments that were supported to kill off theatres, from the rise of television to home video rentals to streaming.
It quotes Hollywood director JJ Abrams, who says, "I think going to a theater is like going to church and watching a movie at home is like praying at home. It's not that you can't do it. But the experience is wholly different."
Vista is banking on him being right.