For context, if you think about our Q2 per cap, that benefited from the film mix in the quarter with the film slate that not only drove an audience mix that skewed younger and tends to purchase more on the concession side, but it also provided more opportunities for us to sell films merchandise. Conversely, as we think about the second half of the year, we are expecting our year-over-year concession per cap growth to moderate. And that’s, again, driven by upcoming film slate. And we’ve already seen that play out in our per cap in July with a more adult skewing film slate that drove an audience mix. That’s just typically less inclined to indulge on the concession side.
Operator: Our next questions come from the line of David Karnovsky with JPMorgan.
David Karnovsky: Maybe to follow up on the pricing loans. Maybe in Q2, can you unpack a bit what strategic pricing versus PLS, what the offset was from the mix? And then Chan, I don’t know if there’s any detail you could provide with the strategic pricing. You’ve noted it for a few quarters now. What’s sort of resonating there? Any incremental color on that would be great.
Melissa Thomas: Yes. So on the average ticket pricing, if we look at domestic ATPs, we’re up about 6% in the quarter. About 5 points of that strategic pricing, a point of that is format mix, so premium format mix and then offset by ticket type mix.
Sean Gamble: And just in terms of reference to strategic pricing, I think it’s one of the areas that we have viewed as an area of opportunity for a while in terms of strengthening our use of data and analytics around pricing. We’ve for a long, long while, had varied pricing throughout the day, throughout the week, that’s tailored to high-level demand patterns that we’ve seen over time. And we just continue to drive that down further to more discrete levels on a by theater basis, but with the use of data. So it ranges in terms of just tailoring levels of price on a more active basis to varied levels of demand both for for movie going in terms of our tickets as well as our food and beverage prices. So with that, we found success in capturing upside both from price and certain circumstances, but importantly, just in terms of frequency and consumption and really getting that equation right to maximize box office, maximize attendance and maximize overall concession revenues.
David Karnovsky: Okay. And then, Sean, you noted the 3 films in APRA earlier. Just wondering, do you have a sense yet for Apple or Amazon, what run rate fleets might look like not in the next 6 months, but in the next couple of years, right? What could this maybe contribute to overall box office in terms of volume or revenue?
Sean Gamble: Sure. Well, Amazon has — they’ve publicly expressed an intention to release up to about 8 to 12 films per year. So when you look at the volume of that, and clearly, we — while I haven’t said this, our expectation is those would probably range in size from small to mid-tier to more significant films, more blockbuster tent-pole type films. So that level of volume is commensurate with a major studio. And Apple has — have they kind of given indications of a similar amount, maybe not quite that number, but there have been indications out there of each spending somewhere around $1 billion annually. So to the extent that flows through, again, those are sizable levels. So there’s the potential for us to see almost 2 incremental major studios entering the marketplace, which would obviously provide a huge tailwind in terms of overall volume over time.
Operator: Our next questions come from the line of Stephen Laschet [ph] with Goldman Sachs.
Unidentified Analyst: Maybe for Sean, with the actors and other influencers unable to promote movies like it typically would given the strikes. I was curious if you see the need or maybe the opportunity for studios and perhaps the theater operators and partnership to invest more in advertising in the back half of the year. Just curious if you think that there’s added return opportunities on this type of spend.
Melissa Thomas: Stephen, I’ll take this one. Regarding our marketing spend, we do not expect any meaningful changes in our spend on account of the strikes. Our spend does vary quarter-to-quarter based on our expected attendance and ROI. But for the full year, we’re still expecting marketing expense as a percent of revenue to remain largely in line with 2022 levels.
Unidentified Analyst: Got it. And then, maybe just a higher-level question on merchandising. We saw a series of merchandising initiatives around the Barbie movie last month, I think Cinemark or token that with some collectible items. I’m just curious how you think about the merchandising opportunity going forward. Just something you think you might want to get bigger into maybe as it seems the content becomes more linked to consumer IP, if that’s something to win deeper into.
Sean Gamble: Sure. Well, we do. I mean we think there’s incremental opportunity there. A lot of that often depends on the types of films that are in the marketplace. So in terms of getting boost here and there. So obviously, the — I think Melissa commented the first half was particularly strong with regard to the types of films and the number of opportunities they provided for merch sales, while the second half might be a little bit lighter. But on the whole, we see there’s opportunity, and it’s — when we look at just what consumers are doing, we see the level of consumption there has been really strong, if not growing. We are actually, in addition to expanding what we offer within our theaters, it’s something that we started to ramp up to from an e-commerce standpoint.
