Sean Gamble: As far as the diversity of content goes, I do think that our studio partners recognize that. Clearly, there is a focus by those studios on some of the larger tent-pole films in franchises, one, because of the significant financial value they can provide but also just from the overall risk equation. Once you get a hit, you can kind of ride that out for a while. So those are great brand drivers for many of these companies. They extend further into their company with other parts of the business that can contribute value. But at the same time, we’ve generally seen them sustain their diverse offerings. And as we continue to see a lot of those types of films work, we think it’s just going to continue to encourage them to put more of that out.
I would also say the evolution of a more flexible window I think has also improved the risk management of those types of titles. As the studios know now that, hey, in success, those films can run really long. If it doesn’t work and doesn’t connect with audiences, there’s a way to offset some of the downside and get into the home faster. That flexing actually can also lead to them being willing to take more chances in some areas where the risk model had become a bit more challenged prior to the pandemic. As far as any genres or segments in terms of content that may be lagging, it’s a tough one because — tough one to say. In some cases, we’ve seen films that resonate better with audiences run a little bit longer post pandemic and some of the ones that haven’t resonated as well fall a bit faster.
But we’ve seen that dynamic across all categories of titles. So it’s hard to necessarily pick out one area. If anything, there may be fewer, I’d say, specialty films in that category that have been released post pandemic. And one thing we find, we’ve seen that recently, as you get more of that volume on a steady basis, then consumers tend to come out more because that momentum just sustains volume. When you have less of that content, it’s just harder to kind of get that to reboot that excitement. So hopefully, we’ll just see a greater amount of that content coming as we go forward. That’s been one area of volume that has lagged a bit. As far as the question on day and date goes, look, I don’t think we or the industry has really changed point of view on day and date.
It’s not something that we favor by any stretch. It’s not something that we look to. It’s clearly something that has been tested. And quite frankly, it didn’t work. I think our studio partners recognize that. They’ve tried it. They’ve seen that the best way to drive value for — drive and maximize value for their financial assets and maximize promotional impact is with a theatrical window. And there’s no real indication of moving back in that direction. In fact, the 89 wide releases that have taken place this year, Five Nights at Freddy’s was the only one thus far that has been day and date. So there’s really no movement in that direction. It’s somewhat of a unique circumstance, I’d say, probably on that title. Nobody thought this was going to become the Gen Z phenomenon that it became and be as big as it was, and I believe it was kind of originally conceived as a streaming day and date type film.
So I’m not — all that doesn’t mean that we won’t see an occasional day and date release. There could be some smaller niche films with limited audience breath or content that was originally conceived for streaming that shows some promise which studios may elect to put out that way. But we don’t see that becoming things shifting back in that direction, again, because all the indicators, all the data points to the best way to drive value of those assets is with a theatrical release, with an exclusive theatrical release.
Michael Nathanson: Thanks, Sean. I appreciate it.
Sean Gamble: Thanks, Michael.
Operator: Thank you. The next question is coming from Ben Swinburne of Morgan Stanley. Please go ahead.
Ben Swinburne: Thank you. Good morning, guys. Hope everyone’s well. A couple of questions. Sean, normally there’s sort of a calendar and timing thing with the slate. As we get closer to the next year, the dates sort of fill in. And this is sort of a prediction within a prediction. But what do you think happens once the strikes are over and production resumes? Like do you think we see a slower cadence of the calendar being popular, maybe a faster cadence because there’s movies that are like 90% finished but haven’t been dated yet? Just wondering since you have probably more conversations with all the studios and we do if you had a view on that? And then I had a couple of follow ups?
Sean Gamble: I’m just thinking about that question. I’m not sure it will necessarily be slower or faster. I do know just based on conversations, there’s going to be a period, perhaps a month or so once things are resolved where all the shuffling is going to take place of sorting out the production schedule. So everything needs to be refigured out, how they’re going to kind of put all those pieces together? I think once they get a better line of sight through that as to when things will get completed, then things will start getting dated. There’s generally a desire by the studios to plant their stakes in the ground on dates sooner versus later to kind of claim that spot. So there’s clearly motivation to get that information out there.
But they’ll be in some regards hesitant to do that until they have a clear sense for where that’s going to be. So I’m not sure it will be accelerated or slower than normal. It will just be a matter of having line of sight to how everything’s shaking out once things get a little bit further along.
Ben Swinburne: Got it, okay. Yes, fair enough. And then alternative content is something that you guys have talked about. I don’t think investors focus that much on it, but it does seem just to keep the Taylor Swift momentum going that that is becoming a real part of your business. Do you think that grows in total dollars for you, either next year or just generally over the next couple of years because it’s becoming a not insignificant part of the business? And then I’ll just finish up moving back to capital allocation to push you guys a little bit. Understand the strikes create uncertainty, but you guys have done over $2 a share of free cash flow year-to-date, you’ll generate free cash flow in the fourth quarter. The conservatism around capital allocation, does that apply to everything?
So will you be thinking about CapEx next year more conservatively? Is that specific to the dividend? And would you be willing to help us figure out when the dividend decision might get revisited if we assume these labor strikes are done here in the next couple of weeks? Thanks.
