The movie theater industry is in trouble. Box office bombs and the changing manner in which people consume their entertainment have sent their stocks plummeting. From the Los Angeles Times on Tuesday:
“AMC Entertainment Holdings, the world’s largest movie theater owner, took a big hit on Wall Street after it reported worse-than-expected earnings amid an unusually weak box office.”
Continuing, the Times reported that AMC’s stock fell more than 25 percent for the quarter ending June 30, which amounts to about a $178 million loss. AMC’s report falls in line with second-quarter reports from other theater chains like Regal Entertainment and IMAX.
After noting on Thursday that, all told, the value of stock in the top four theater operators in North America has dropped $1.3 billion since August 1 alone, Bloomberg pointed out the obvious — namely, that a theater can’t sell tickets if no one wants to see the movies:
“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.”
Bloomberg observes that the “tried-and-true formula of churning out big-budget sequels and cinematic universes populated with superbeings seems to be wearing on filmgoers,” pointing out that “once-reliable draws Jack Sparrow, the Transformers and the Mummy did poorly in the U.S.”
Aside from Hollywood pumping out duds, streaming services have emerged as a formidable competitor in the entertainment field, as Bloomberg notes:
“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.”
In reporting on AMC’s market crash on Tuesday, CNN Money agreed that “part of the problem could be that more people are choosing to stay home and wait for movies to come out on Netflix, Amazon and other services.”
Meanwhile, Bloomberg explained how AMC will, at least in part, be tackling the profit loss problem:
“The company will also pursue ‘strategic pricing’ — possibly selectively charging more for hot tickets or offering discounts to fill seats — and cut back on investments in improvements to its theaters, such as reclining seats.”
This post originally appeared at Anti-Media.