Movie Exhibitor Stocks Fall Amid Slumping Box Office

Late on Monday Dec. 19th, 2011 the Hollywood Reporter broke the story that "on the heels of the box office's third weak weekend in a row, Regal Entertainment shares fell 9 percent [in that day's trading]."

This one day's drop wouldn't be news on its own - but Carmike Cinemas stock price also tumbled - almost 5 percent on the day - and Cinemark had a bad day too.

Why all the doom and gloom? Is it just a panicked response to one bad weekend?


With just 13 days left in 2011, year-to-date box office is down around four percent.

And this year-to-year trend of lower box office is the result of an (even more troubling?) drop in attendance (actual butts in the seats) that started in 2006 - Since 2006, the actual number of tickets sold (not the box office gross - which includes significant increases to ticket prices for 3D etc.) has declined every year - except 2009 when Avatar brought people back to the theaters (apparently only temporarily).

So the sudden drop in the value of movie theater chains on Dec. 19th, 2011 was both a response to a long-term trend and a short-term problem with weak holiday film openings. According to the Hollywood Reporter: "The box office has been weak for several weeks, and the most recent weekend was considered the third dud in a row, with Sherlock Holmes: A Game of Shadows and Alvin and the Chipmunks: Chipwrecked underperforming compared to their debuts. All-in-all, the weekend was down 14 percent compared to last year."

No comments:

Randy Finch's Film Blog:

Thoughts from a film producer about making and distributing films.