Box office take slumps this year
Increased competition from Netflix and several flops leave sales down 2% for 2017
Hope is fading for a feel-good ending at the U.S. box office.
After several months of flops like Warner Bros.’ King Arthur and EuropaCorp’s Valerian, movie studios and theatres are beginning to acknowledge that their streak of record-setting ticket sales may be coming to an end.
AMC Entertainment Holdings Inc., the world’s biggest cinema chain, laid out a worse-than-projected outlook for the North American box office this week.
That announcement dragged down shares of theatre stocks, wiping out $1.3 billion (U.S.) from the value of the top four cinema operators in North America since Aug. 1. Even with a new Star Wars, a Marvel su- perhero movie and the sequel to Blade Runner on the docket for the holiday season, the box office is unlikely to make up for a “severe hit” in the third quarter, according to Bloomberg Intelligence. To date, receipts are down 2 per cent in 2017, and AMC is projecting a 1.5-per-cent decline for the full year.
The concern is that the slump isn’t just a run of bad luck. Cinema operators have managed for years to keep increasing sales by raising ticket prices amid stagnant attendance, but a sharp drop in filmgoing would make that harder to sustain. And the tried-and-true formula of churning out big-budget sequels and cinematic universes populated with superbeings seems to be wearing on filmgoers. Movies featuring once-reliable draws Jack Sparrow, the Transformers and the Mummy did poorly in the U.S
Meanwhile, competition is heating up. Netflix Inc. and other digital distributors are creating more original movies, and consumers have more demands on their attention than ever, from Snapchat to YouTube. Further exacerbating the trend, studios are expected to push for a new premium video-on-demand window this year.
It’s possible that Hollywood could reverse the trend next year, when a new movie about Han Solo, an Avengers film, and sequels to Deadpool and Jurassic World are scheduled.
“This is very typical of the movie business,” said Paul Sweeney, an ana- lyst at Bloomberg Intelligence. “You could make the argument that the slate for next year looks really good, which should grow the market next year in North America. That part’s a cyclical thing, and it’s likely to come back.”