High Gasoline Prices Boost Movie Profit, Says CEO
The summer movie season kicks off with Walt Disney’s Pirates of the Caribbean: At World’s End. Disney’s third installment of Pirates comes after box office records were recently set by sequels to DreamWorks Animation SKG's Shrek and Sony's Spider-Man. David Brain, CEO of Entertainment Properties Trust, joined CNBC’s Erin Burnett on “Squawk on the Street” to explain how he’s profiting from the big-screen blockbusters.
Entertainment Properties develops and acquires entertainment properties, including movie theaters. While they did see a pullback due to high gasoline prices last summer, Brain says that this summer, people are more accustomed to the price of gasoline -- so they will spend more money on shorter trips to entertainment destinations, rather than long-distance vacations.
“While discretionary money is more scarce, at the same time people are willing to treat themselves to these types of outings, as opposed to the large income indulgences,” said Brain.
Brain is not worried about video on-demand and simultaneous release, which would allow the viewer to watch a new release from his or her own living room. “The sleeper that no one talks about is the price points are $30 to $50 for those immediate releases, so it makes going to the theater look like a bargain,” said Brain.