Exhibitor Stocks Tumble Following Lackluster Box Office Weekend

Top domestic movie theaters closed down Sept. 21 at the end of Wall Street trading following a disappointing weekend box office. Shares of AMC Entertainment, Cineworld (which owns Regal Cinemas) and Cinemark fell 6%, 7.8% and 3.7%, respectively. Imax dipped 4.8%, while National CineMedia dropped 15.1%, and Marcus and Reading International each fell 5.1%. Studio parents AT&T (which owns Warner Bros.) and The Walt Disney Co. closed down 1% and 2.5%, respectively.

The culprit: Warner’s Tenet, which continues to underwhelm in the U.S., while thriving internationally. The Christopher Nolan-directed thriller was supposed to jumpstart domestic screens, and instead saw ticket sales plummet 30% to $4.7 million following the previous weekend’s $6.7 million. The movie has generated $36.1 million over three weekends, compared with $203 million internationally.

Meanwhile, Disney’s The New Mutants sold $1.6 million in tickets at 2,518 theaters through Sept. 20 to bring its total box office to $17.7 million in the U.S., $35 million worldwide.

With the coronavirus pandemic still a major concern for indoor venues such as movie theaters, exhibitors are finding consumers unwilling to take the risk.

New data from Morning Consult found just 18% of 2,200 responses from a survey conducted Sept. 10-13 felt comfortable going to a movie theater.

“It seems that people want to see changes in the news with cases and policies,” Alyssa Meyers, brand and marketing reporter at Morning Consult, said in a statement. “It’s not enough for places to just be reopening.”

Wedbush Securities media analyst Michael Pachter remains bearish on the movie theater business, arguing exhibitors’ aggressive plans to re-open screens during a lull in the coronavirus pandemic is wishful thinking.

“People may be eager to visit the theaters once they feel safe doing so, but we think it is unlikely crowds will return to any semblance of normal before a vaccine is widely distributed, particularly in urban and suburban markets,” Pachter wrote in a recent note.

WarnerMedia Clarifies Theatrical Commitment

After AT&T COO John Stankey said he doubted movie theaters could rebound quickly under the shadow of the coronavirus, subsidiary WarnerMedia Entertainment went into damage control clarifying the executive’s comments during the telecom’s April 22 fiscal call.

WarnerMedia properties include Warner Bros., HBO and Turner.

Stankey said the virus and resulting theater closures would change consumer behaviors and expectations regarding how they access filmed entertainment.

“We’re evaluating our product distribution strategy, re-looking at volumes and the required support levels we need in a down economy,” he said. “We’re rethinking our theatrical model and looking for ways to accelerate efforts that are consistent with the rapid changes in consumer behavior from the pandemic.”

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Re-thinking the theatrical model is often alarmist code for doing away with the traditional 90-day exclusive box office window and expediting retail channel distribution, including home entertainment.

Indeed, Warner is rushing animated release Scoob! to retail channels on May 15 — its original theatrical release date.

“Now our focus is on defining and leveraging the new normal across all of our operations,” Stankey said.

Those comments prompted Ann Sarnoff, CEO of Warner Bros., to reiterate to the media the studio’s support for traditional theatrical releases, including holding back tentpole movies such as Tenet and Wonder Woman 1984 for future box office distribution.

“We remain supportive of the theatrical experience and our exhibition partners, and are confident that our tentpole titles … are exactly the type of films that will have people eager to return to theaters,” Sarnoff told The Hollywood Reporter.