Commentary

Big Movie Biz Is Back - Or Just Back To Historical Declines?

The movie theater business seems to be flying high at the moment. But competitive turmoil and financial issues still remain -- including any lingering upcoming winter season issues from you-know-what.

The "flying high" relates to the recent opening of Paramount Pictures wide-release movie “A Quiet Place Part II,” which pulled in a healthy $58 million for its opening Memorial Day weekend.

Some more good news: Due to the pandemic, there is a surfeit of major theatrical franchise movies backed up from a year ago. The supply-and-demand situation looks to be jammed as movie theaters continue to fully open their cinemas this summer.

Estimates are that over 70% of all U.S. movie theaters are open.

The iffy news: AMC Entertainment the biggest U.S. theater chain’s stock keeps rising -- but not because of financial fundamentals, just on small investor speculation. The counter-argument is AMC is a “meme” stock -- fueled by social-media activity, which disregards, in large part, financial data, according to numerous analysts.

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But at the same time, other big U.S. theater chains, Cinemark and IMAX, have been downgraded by Goldman Sachs.

Now add those major connected TV, home-based premium streamers to the picture.

We are still digesting the results of new business gains from consumers willing to watch all kinds of premium entertainment in their living rooms -- in particular highly sought after “theatrical” movies intended for cinemas.

Significant subscription dollars are ramping up Netflix, Disney+ and HBO Max, Peacock and others. And it’s coming from someplace -- not just traditional pay TV providers.

All to say, you have to believe some piece of the theatrical movie audience won’t be coming back. Perhaps 10%, maybe 5%?

Let’s look at a longer key movie theater business trend where some of these metrics reside. Movie theater attendance has been steadily going down -- even before the pandemic -- as movie ticket pricing keeps climbing. In 2019, U.S. movie attendance fell 5% to 1.24 billion over 2018, according to the Motion Picture Association.

Before we all get too crazy, also consider what typically happens when the fall and winter season rolls around: People can get a bit under the weather. No, not generally Covid. But with the other common winter season affliction, the flu -- a regular historical occurrence for decades.

How many people will be spooked into just staying at home -- even a little bit -- to see “The Matrix 4”, “Downton Abbey 2” or “Spider-Man: No Way Home”? Being at home will be one answer. Then think about consumer memories the year after that.

1 comment about "Big Movie Biz Is Back - Or Just Back To Historical Declines?".
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  1. Ben B from Retired, June 4, 2021 at 7:13 p.m.

    I like going to the movie theater and seeing the movie on the big screen been to many movies this year. I'll always go and see a movie at the theater.

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