As Hollywood wraps up the all-important summer box-office season this Labor Day weekend, a sobering reality has gripped the industry.

The number of tickets sold in the United States and Canada this summer is projected to fall to the lowest level in a quarter-century.

The results have put the squeeze on the nation’s top theater chains, whose stocks have taken a drubbing. AMC Theatres Chief Executive Adam Aron this month called his company’s most recent quarter “simply a bust.”

Such blunt language reflects some worrisome trends. Domestic box-office revenue is expected to total $3.78 billion for the first weekend of May through Labor Day — a key period that generates about 40% of domestic ticket sales — down nearly 16% from the same period last year, according to comScore. That’s an even worse decline than the 10% drop some studio executives predicted before the summer began.


And the number of actual tickets sold this summer paints a bleaker picture, with total admissions likely to clock in at about 425 million, the lowest level since 1992, according to industry estimates.

No one can fully explain why. Studio executives, movie theater operators and analysts cited the usual explanations for the summer slump. There are the obvious reasons: Too many bad movies, including sequels, reboots and aging franchises that no one wanted to see. Some point to rising ticket prices, which hit a record high in the second quarter, according to the National Assn. of Theatre Owners. Then there are long-term challenges, including competition from streaming services such as Netflix and the influence of the movie review site Rotten Tomatoes. How about all of the above?

What is clear: This summer was marred with multiple high-profile films that flopped stateside, including “The Mummy,” “Baywatch,” “The Dark Tower” and “King Arthur: Legend of the Sword.” Sequels in the “Alien,” “Transformers” and “Pirates of the Caribbean” franchises also disappointed. (International ticket sales are helping to ease some of the pain.)


× Justin Chang reviews ‘Transformers: The Last Knight’, directed by Michael Bay, starring Mark Wahlberg, Isabela Moner, Josh Duhamel, Anthony Hopkins, Stanley Tucci, Laura Haddock, Tyrese Gibson, John Turturro. Video by Jason H. Neubert.

The business is also reckoning with broader, longer-term threats that have kept Americans from flocking to theaters the way they used to. People now have more entertainment options than ever, and cinemas have struggled to keep up, despite efforts to adapt with improved technology and services, industry analysts say. The problem is exacerbated by an unforgiving social media environment in which bad movies are immediately punished by online word of mouth.

Some worry that summer movies have simply lost their place as the top entertainment touchstones American consumers are talking about, as acclaimed shows such as “Game of Thrones” on HBO and “The Handmaid’s Tale” on Hulu dominate the cultural conversation.

“The floor beneath the entertainment market is not as stable as it was 10 years ago,” said Jeff Bock, box-office analyst with tracking firm Exhibitor Relations. “There’s a lot of different things that monopolize people’s discussions, and most of them are not movies. The product is just not worth talking about.”


The long-term challenges are pushing studios to adapt. They’re discussing ways to make movies available for streaming earlier after their theatrical releases through iTunes and video-on-demand services, despite resistance from theater chains. MoviePass, a New York-based company that sells subscriptions to let people see a virtually unlimited number of movies, became a topic of heated debate when it recently lowered its monthly fee to $9.95.

Overall, the industry has been too slow to embrace changing viewer habits, some analysts say.

“The rest of the entertainment industry has evolved, and movies haven’t,” said Doug Creutz, media analyst at Cowen & Co. “People are only going to see movies they think they have to see in theaters, and there aren’t that many of them.”

People are only going to see movies they think they have to see in theaters, and there aren’t that many of them. Doug Creutz, media analyst at Cowen & Co.


To be sure, the summer wasn’t all bad. The movies that succeeded did so by achieving critical acclaim, satisfying the desires of underserved audiences, and offering something fresh and original. Warner Bros.’ DC Comics film “Wonder Woman,” the summer’s top movie, grossed more than $400 million domestically by finally bringing a female superhero to the big screen. “Spider-Man: Homecoming,” Sony’s Marvel collaboration, was also a hit. Raunchy comedy “Girls Trip,” from Universal Pictures, collected $108 million by targeting black women. Christopher Nolan’s “Dunkirk” and Sony’s “Baby Driver” proved that original concepts can still draw big crowds to the theaters.

But those hits didn’t make up for the big misses. The explanations for the movies that didn’t work run the gamut and often contradict each other.

Some said audiences have tired of seeing the same old characters. Indeed, Universal’s “The Mummy” failed to deliver, and 20th Century Fox’s “Alien: Covenant” and “War for the Planet of the Apes” did significantly worse than their predecessors.

But so-called sequel fatigue doesn’t explain the success of “Guardians of the Galaxy Vol. 2” and “Despicable Me 3,” which were both big moneymakers.


R-rated comedies, usually a reliable source of studio profits, also fell on hard times this summer. Four out of the five major releases disappointed: Fox’s “Snatched,” Sony’s “Rough Night,” Paramount’s “Baywatch” and Warner Bros.’ “The House.” “Girls Trip” was the one exception, notably, after earning critical acclaim.

“It’s not the genre itself that wasn’t working,” said Nick Carpou, domestic distribution president for Comcast Corp.’s Universal Pictures. “People respond to good movies.”

To that point, some studio executives and filmmakers have blamed Rotten Tomatoes’ aggregated review scores for sinking certain movies before they even hit theaters. But how does that jibe with the success of Sony’s “The Emoji Movie,” which scored $77 million despite an overwhelming drubbing from critics (7% on Rotten Tomatoes)?

Many studio executives still chalked up the abysmal summer to the feast-or-famine nature of the box office, cautioning people not to overreact to short-term fluctuations that can be caused by a single flop or a weak month. August was unusually bereft of big studio films, with the exception of New Line’s “Conjuring” spinoff “Annabelle: Creation,” clocking in at $79 million so far. August ticket sales plummeted 35% from the same month last year.


“It’s tough to say if there’s a trend,” said Adrian Smith, president of domestic distribution at Sony Pictures. “There are a lot of movies on the horizon that audiences are going to respond to.”

The summer slump wiped out gains posted earlier in the year, when successes including “Get Out” and “Beauty and the Beast” propelled grosses. Since Jan. 1, 2017, films have done $7.5 billion in ticket sales from the United States and Canada, down 6% from a year earlier. That makes it unlikely this year will surpass the record $11.4-billion industrywide haul of 2016, even with a new “Star Wars” movie due in December. A much-needed winner could come Sept. 8, when Warner Bros. and New Line release their much-anticipated Stephen King adaptation, “It.” There are also high hopes for “Pitch Perfect 3” and “Justice League.”

× “The Last Jedi” continues the episodic story of Rey (Daisy Ridley), Poe Dameron (Oscar Isaac), Finn (John Boyega) and a few original characters, including Luke Skywalker (Mark Hamill).

Global film revenue — which hit a record $38.6 billion last year — continues to be a silver lining. Certain films have made up ground by doing well overseas after underperforming at home, particularly in China, the second-largest box-office market.


Still, the overseas grosses haven’t been able to completely offset weakness in the United States. The most recent “Transformers” movie grossed $228 million in China, nearly 30% less than the prior installment in the franchise. Disney/Pixar’s recently released “Cars 3” had a weak debut in the country, where overall ticket sales have cooled.

To Cowen & Co.’s Creutz, it’s a sign that Hollywood can’t rely on international sales to buttress its business forever.

“That’s pretty much run its course, too,” he said. “The trends we’re seeing here are also true in the rest of the world.”

To read the article in Spanish, click here


ryan.faughnder@latimes.com

Twitter: @rfaughnder

ALSO:

How Rotten Tomatoes became Hollywood’s most influential — and feared — website


When did August become Sundance month in theaters (and maybe it shouldn’t be)?

China spurns Hollywood movies in favor of the hyper-patriotic ‘Wolf Warrior 2'