It was a dreadful weekend for exhibitors. The top 12 movies grossed $49.8 million in domestic ticket sales, the first time that multiplex operators haven't topped $50 million since the fall of 2001.
It's been a cruel summer for movie theater chains. We're wrapping up what will be the fourth month in a row of year-over-year declines in ticket sales, and investors are also feeling the pain. Leading theater operator AMC Entertainment (NYSE:AMC) has shed 61% of its value this year.
We're clearly in a rut. There's no shortage of reasons to blame for the slowdown in moviegoers, but some of the more popular excuses don't hold up under further scrutiny. Let's take a closer look at three scapegoats that don't deserve credit for the industry's slide that resulted in the industry's worst weekend in more than 15 years.
1. Mayweather-McGregor duke it out
It's easy to lay the blame for this particular weekend's shortfall on Saturday night's match between boxer Floyd Mayweather Jr. and mixed martial arts fighter Conor McGregor. A lot of people saw Mayweather remain unbeaten in the boxing world, but it's not a fair reason to write off the empty movie house seats.
For starters, the weekend's box office receipts include $2.6 million for the 532 theaters that simulcast the fight through Fathom. The fight actually clocked in eighth on the list of weekend ticket sales.
The Mayweather-McGregor match also began pretty late on Saturday, giving folks plenty of time to hit the corner multiplex over the weekend if they wanted to. Some may argue that folks saving up big bucks to catch the fight didn't have a lot of disposable income left for a night at the movies, but who are we kidding? The vast majority of people caught the fight for free through streaming and social media sites.
2. Hollywood quality isn't what it used to be
A popular knock on the state of decaying turnout is that the product isn't any good. There's a lot of garbage that makes it out to the silver screen, but that's necessarily the deal breaker this time. Half of the 10 highest-grossing films over the weekend have Rotten Tomatoes score of 85 or better, meaning that at least 85% of the movie critics recommend the titles.
Content quality is up to snuff according to professional critics, and the internet makes it easy to check out opinions before paying up for a trip to the theater.
3. MoviePass is disrupting the value proposition
It's been nearly two weeks since MoviePass announced that it would be dropping the price of its plan that allows members to watch a movie a day at most theaters to $9.95 a month. It's a move that AMC Entertainment has been vocal in denouncing, fearing that it will destroy the value proposition of a night at the movies.
Blaming MoviePass for the worst multiplex weekend since 2001 isn't fair. For starters, MoviePass is paying theaters face value for the tickets, so in the short run, AMC Entertainment and its peers should be benefiting from an uptick in viewing activity as MoviePass members dive into the smorgasbord.
However, it's also important to remember that folks hopping on MoviePass after its announcement still had to wait about two weeks to receive the MoviePass card that works as a debit card to square away reservations. In short, a lot of new members may still be waiting for their cards to arrive. The value proposition may sting in the long run, but it doesn't explain why so many of us stayed away from the local multiplex this weekend.