The good news for Disney (DIS -1.62%) is that Onward -- the media giant's latest theatrical release -- was the top draw at the box office for the second consecutive week. The bad news for Disney is that the film has also set a new low-water mark for the second week in a row.

The $39.1 million in domestic ticket sales that it delivered in its opening weekend was the lowest tally for a Pixar release in more than a decade. This time around, it saw its ticket sales plummet a colossal 73% since the prior week, and the gross receipts of the top 10 films is the movie industry's lowest sum for this weekend in 25 years. 

These are unusual times given the coronavirus outbreak and the measures necessary to contain COVID-19, but the industry was reeling well before the threat of a major pandemic. AMC Entertainment (AMC -1.93%), Regal parent Cineworld (CINE) (CNWGY), and Cinemark (CNK -0.79%) have experienced sharp stock declines over the past year, but things are about to get worse. It's just a matter of time before they shut down their projectors, and not all of them may come back when the coast is clear. 

A pair of reclining seats at an empty theater

Image source: AMC Entertainment.

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AMC is the top dog in this industry, but earlier this month, it slashed its once bountiful dividend following another rough quarter. The stock has plummeted nearly 80% over the past year, and analysts see nothing but near-term losses for the exhibitor. Given its debt-heavy balance sheet, AMC is on borrowed time at this point. 

The chain is trying to respond to the coronavirus challenge. It announced on Friday that it will beef up its cleaning protocols. AMC will also limit its capacity to no more than 50% of a screen's available seats. In some of its largest theaters, with more than 500 seats, it will cap the occupancy at 250 patrons. AMC is reacting to the cries for social distancing, but that's easy to do when most of your showings are playing to largely empty audiences.  

As bad as things seems now, they are about to get worse. Disney announced that it's pulling its live-action Mulan release. There are now no notable theatrical releases slated until at least April. Unless exhibitors start to get creative with their content, you can expect Onward to continue topping the box office receipts despite going backwards. 

Theater chains are being squeezed by both supply and demand. The public outcry will also grow louder, even if multiplexes offer a necessary means for escapism during dark times.

AMC, Cineworld, and Cinemark aren't feature attractions anymore. Too many people are spending time on streaming services at home that cost less than a single movie ticket for an entire month of content. AMC is trying to cash in on the trend with its own on-demand platform, but odds are strong that you probably didn't even know AMC Entertainment had a digital service. Its AMC Stubs A-List program raised the bar on multiplex subscription plans two years ago, but it's too little, too late for an entertainment provider. With the near-term prospects thinning and the prospects for a recession widening, it's just a matter of time before COVID-19 goes PG-13, shutting down the industry and shaking out some of the weaker players in the process.