Hollywood Might Not Bounce Back From Theaters’ $1.3 Billion Stock Collapse
By Anousha Sakoui and Emma Orr
August 3, 2017
‘King Arthur,’ ‘Valerian’ among flops hurting theater chains
Poster child AMC dragged down by Wanda’s troubles in China
…..After several months of flops like Warner Bros.’ “King Arthur” and EuropaCorp’s “Valerian,” movie studios and theaters are beginning to acknowledge that their streak of record-setting ticket sales may be coming to an end.
…That announcement dragged down shares of theater stocks, wiping out $1.3 billion from the value of the top four cinema operators in North America since Aug. 1.
…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.
…The big shadow hanging over the industry is whether studios will push to shorten the time between theater and home release of their movies, from the standard three months to within weeks after theater attendance has dropped off. The concern is that such a premium video-on-demand offering would give consumers less incentive to go see a movie in theaters, knowing they could watch it at home within weeks.
The studios are negotiating with cinema operators over the matter, pushing for an agreement as soon as the end of this year. Reaching a deal may be tricky.