One of the very first articles I ever wrote for Fool was about how companies like Netflix would make movie theatre companies like Cineplex Inc. (TSX:CGX) pretty obsolete. And I stand by that article because why pay $15 for a movie ticket and then buy stale popcorn and a giant cup of carbonated sugar water?

But when you dive deeper into Cineplex, what you find is that the company itself realizes that movie theatres are not a long-term plan for success. Looking at Q1 earnings, we see that revenue per person at the box office dropped by 1.5%. The writing is on the wall.

What Cineplex is looking to achieve, though, is true diversification. It doesn’t want to be known as a movie theatre company, but as a multimedia entertainment company. According to the company, one of its primary goals is to get 25-50% of EBITDA to come from sources other than its movie theatres. By doing that, even if the movie-theatre business suffers, the company will still be able to generate significant cash flow.

One of the plans that the company has to reach this goal is to launch what it is calling the Rec Room. These are large multipurpose venues that are meant to provide fun and excitement for the whole family. Does Dad want to watch sports and drink beer? Done. Do the kids want to play arcade games? Done. Rather than just catering to the movie audience, the Rec Room initiative makes it so that the company can generate income from all demographics. Over the next few years, the company will be launching anywhere from 10-15 of these venues.

Taking the future Rec Rooms out of the conversation, we can already see that the company is moving towards its goal. When comparing revenue year over year, digital media rose 40.8%, gaming revenue rose 8.4%, and “other” revenue increased 17.3%. I expect that these categories will continue to experience significant growth, especially as future initiatives are launched.

But what about the dividends?

I am glad you asked. When I think of dividends, I think of the railroads, the telecommunication companies, and before the oil glut, the big producers. However, Cineplex is actually a very lucrative dividend investment for those that need entertainment in their portfolio.

The company pays a 3.27% yield, which rivals many of those big dividend giants that I alluded to above. Each month it pays its investors $0.13, which comes out to $1.53 a year in earned dividends.

To top it off, for the past five years, the company has increased its dividend, giving people a raise for their investment. Just like with my job, I like to get raises. I see no reason why the company can’t expect even more raises to the dividend, especially as it diversifies the business into higher revenue-generating multimedia centres.

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Fool contributor Jacob Donnelly has no position in any stocks mentioned. David Gardner owns shares of Netflix. The Motley Fool owns shares of Netflix.