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TOPIC: SUMMER 2012

SUMMER 2012 07 Sep 2012 16:35 #39134

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Movie Theaters Struggle Despite Summer's Super Blockbusters

By Rick Aristotle Munarriz, The Motley Fool
Posted 6:00AM 09/07/12
Posted under: Company News, Media, Walt Disney, Entertainment
After a hot start this year, your local multiplex is emptying out again.

Hollywood.com statistics show that attendance during the telltale summer season tallied 533 million moviegoers in North America, nearly 4% fewer than last summer. You have to go all the way back to 1993 to find the last time fewer tickets were sold.

Last year was the first year since 1995 that domestic theaters failed to sell at least 1.3 billion movie tickets. Are we in for another repeat performance?

Strong Start, Weak Finish

Summer matters. Studios tend to put out their biggest blockbusters during the hot months, when a long break from school makes an air-conditioned movie theater an ideal escape.

Studios may save their more artsy critic-pleasing releases for the end of the year to lobby for Oscar nominations, but summertime is all about big action, big stars, and big ticket sales.

The season got off on the right foot.

Disney's (DIS) The Avengers took in a super-heroic $207.4 million in North American ticket sales during its opening weekend, obliterating the record established by Harry Potter and the Deathly Hallows: Part 2 a year earlier.

The Dark Knight Rises and The Amazing Spider-Man followed with strong ticket sales in July.

August is when things began to fall apart. Despite healthy marketing for The Expendables 2, the politically timely The Campaign, and the Total Recall remake, there wasn't a single August release that topped $100 million in North American ticket sales.

The Problem of Empty Seats

Movie studios obviously don't want to see folks shying away from the multiplex, especially if it becomes a longer-lasting trend.

Exhibitors and publicly traded companies including IMAX (IMAX) and 3-D outfitter RealD (RLD) also are hoping that this late fizzle to the once-sizzling summer season is just a fluke. Their entire business models revolve around drawing crowds to screenings.

Ways Hollywood Can Save the Local Multiplex
A few factors are at play here. High-def TVs -- and even HD sets with 3-D capability -- are getting cheaper. Movie studios are narrowing the release window between a film's theatrical release and its availability for rent or purchase. There's also the digital revolution, giving homebodies more programming alternatives without having to head out to the closest movie theater.

Sure, there's still the allure of freshly popped popcorn, even though concession prices now border on the ridiculous. A date night at the movies is still an iconic outing, even though renting a movie has never been easier.

Hollywood had better make sure that it comes back strong next summer. Three straight declines during the industry's most potent season would be an ugly trend that no studio can ignore.

Longtime Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of IMAX and Walt Disney. Motley Fool newsletter services have recommended buying shares of IMAX and Walt Disney.
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