It's been a largely forgettable two years for the multiplex industry, but we finally hit a new high-water mark in ticket sales over the holiday weekend. Disney's (DIS 0.85%) Shang-Chi and the Legend of the Ten Rings rang up an estimated $90 million in box-office receipts over the extended Labor Day weekend, a new record for U.S. exhibitors in that particular four-day holiday.
Despite being one of the more obscure Marvel franchises to helm a film, blowout reviews -- a 92% critics approval rating on Rotten Tomatoes with an even more potent 98% audience score -- have a way of drawing audiences. A multiplex-friendly distribution plan is also benefiting AMC Entertainment Holdings (AMC) and its younger rivals.
Savoring the season
All the talk about multiplex chains never returning to their heyday was dubbed into a silent film this past weekend. The new Labor Day weekend records of $90 million for Shang-Chi and the estimated $117.7 million haul for all movies are huge. You have to go all the way back to 2014 to find the last time that domestic box office receipts clocked in sporting nine figures for all of this weekend's flicks, and that was when another Marvel sleeper hit -- Guardians of the Galaxy -- was in the third week of its run as a late-summer release.
It's fair to point out that this was a bit of a perfect storm. The Labor Day holiday is typically an afterthought for movie studios. They're putting out their biggest potential blockbusters earlier in the summer to make the most of the season with kids out of school and families looking for things to do. Labor Day weekend in 2019 was the worst weekend of that particular summer run in terms of ticket sales.
However, a record is still a record. Another big part of this story is that Shang-Chi and the Legend of the Ten Rings is one of the few films to hit theaters without also being available as a premium on-demand digital screening or part of an existing streaming service.
Disney didn't exactly map it out this way. Shang-Chi -- like Free Guy last month -- was part of the Twenty-First Century Fox catalog that the House of Mouse acquired two years ago. Those films have existing terms that include theatrical exclusivity for the first 45 days. However, the inability for consumers to legally stream the new film from home had to play a starring role in the film's strong box-office debut.
AMC can use the strong showing. The telltale summer season was starting to be more fizzle than sizzle. Ticket sales had declined sequentially in five of the seven previous weekends. Box-office receipts for the previous weekend were 43% below where the industry was two years ago. We have also seen some high-profile films have their release dates bumped out again, as Hollywood frets about the late-summer surge in COVID-19 cases.
The record showing of Shang-Chi -- even if it's riddled with asterisks about the irrelevancy of Labor Day weekend for the industry -- could still reshape the narrative here. Studios don't have to fear the current health climate if the product is good enough. AMC's volatility aside, it's probably not a bad time to see if movie theater stocks are finally ready for their close-up.