It’s Mission Unprofitable For Movie Theaters These Days

It’s Mission Unprofitable For Movie Theaters These Days
Daniel Johnston

7 months ago2 mins

Mentioned in story

What’s going on here?

It might be a blockbuster summer for movies, but theaters’ prospects don’t look so great these days.

What does this mean?

With Tom Cruise back in action and the much-anticipated "Barbenheimer" weekend upon us, you’d think movie theaters would be on a “Barbie Dreamhouse” kind of high right now. But Mission Impossible’s premiere actually fell short of projections, casting an Oppenheimer-style shadow over the box office instead of Barbie’s bubbly brightness. Add in the first Hollywood strikes of both writers and actors in six decades – which have already halted several movie productions and shaken the silver-screen pipeline – and it’s no wonder Bloomberg analysts have trimmed their forecasts for the theater industry’s takings this year. Wall Street analysts, meanwhile, see the strikes keeping theater stocks in the doldrums, even if the box office takings outperform expectations.

Theater stocks

Why should I care?

Zooming in: Reel problems.

The Hollywood strikes are a drama in their own right, with two main plotlines. First, there’s the issue of pay. Not every actor in Tinseltown is cashing Tom Cruise-level paychecks – most are just making ends meet, and the rise of streaming has only tightened their purse strings. Then there’s the specter of AI: writers are worried about machines churning out scripts, while actors fear studios could use the tech to mimic their performances. After all, if profit-hungry studios can get away with not paying a heap of extra salaries, then you can bet your bottom dollar they’ll try to.

For markets: Paying with plastic.

Despite the drama, there’s a Hollywood ending for some: the brands that feature in blockbuster movies. See, according to investment platform eToro, a company’s share price gets an 8% bump on average in the three-month prelude to a brand-centric film release. And Mattel, the company behind Barbie, can vouch for that: the firm’s stock price strutted up a whole 24% ahead of Barbie’s big-screen catwalk.

Mattel stock
Source: Google Finance
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG