Aug 19, 2022 - Economy

Movie theaters suffering from Hollywood’s slow summer

Animated illustration of a theater chair out in the desert with a tumbleweed going by.

Illustration: Aïda Amer/Axios

Hollywood's slower than usual summer is hurting movie theaters.

Why it matters: Audience attendance has rebounded since theater doors have reopened — but the explosion of streaming options coupled with the health crisis has changed moviemaking, and watching, permanently.

Driving the news: Cineworld, the parent company of Regal, is now preparing to file for bankruptcy to restructure its massive debt load, according to a WSJ report Friday. The news sent shares of the London-based company down about 63%.

  • Earlier this month, fellow theater chain AMC reported a second-quarter loss of $121 million while warning there would be a "dearth of new big movie titles being released in August and September. So ... don't expect too much of us for all of [third quarter]."
  • Cinemark echoed those sentiments during its earnings release, with CEO Sean Gamble noting that consumer sentiment and diversity of new films will also be key to keeping box office numbers high.

By the numbers: Only 174 box-office films have been released so far this summer, with only a few weekends left.

  • That's down nearly 60% from 2019 when 403 titles were out, according to Box Office Mojo data.

Be smart: AMC and Regal are the two biggest theater chains in the U.S.

  • But both, while in the same industry and saddled with debt, have very different visions for their future.
  • AMC's success as a meme stock enabled the company to harness the equity and attention of the Reddit crowd to avoid bankruptcy and grow beyond movies.
  • Cineworld, seeing this, caught a case of FOMO last year and toyed with the idea of a U.S. listing to ride the same frenzy.

Our thought bubble, via Axios' Javier E. David: Regal is an outlier in a market that — despite all of the dire prognostications of the pandemic era — has largely rebounded in terms of the number of moviegoers coming back to theaters.

  • This suggests that dithering on the meme stock craze may have caused Cineworld and Regal to miss a golden opportunity.

Yes, but: Movie theaters still need movies and studios are struggling to figure out which flicks to make for which platform.

  • Warner Bros. Discovery shelved "Batgirl" before its HBO Max release, saying it doesn't make sense to produce big-budget films for streaming.
  • Meanwhile, recent hits like "Nope," "Everything Everywhere All At Once," and "Top Gun: Maverick" have delivered success as non-superhero movies.

What to watch: The all-important holiday season.

  • "Black Panther: Wakanda Forever" is expected to be released Nov. 11 and "Avatar: The Way of Water" is out Dec. 16.
  • "We look forward to Q4 of 2022 and we look forward to calendar year 2023 with absolute glee," AMC CEO Adam Aron said on the earnings call.
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