Looking back, 2011 was a terrible year for Hollywood -- the industry sold the lowest number of tickets since 1995.
Due to a disappointing theater turnout, box office revenues reached $10.2 billion, down 3.5% from last year.
According to CNNMoney, analysts are saying the disappointing results are from a combination of a weak economy and expanding home entertainment options, such as Netflix.
A weak economy and rising unemployment does not bode well with spiking ticket prices. They are up over 80% since 1995, and have jumped from an average of $6.88 to $7.96 in the past four years alone.
"Consumers are still trying to repair their balance sheets," Miller Tabak analyst David Joyce told CNNMoney. "It's not so much the titles."
The year of sequels
New York Times' Michael Cieply reports, "So far the top seven pictures at the domestic box office have been sequels, an alignment that appears unmatched in movie history... If 'Sherlock Holmes: A Game of Shadows' or 'Alvin and the Chipmunks: Chipwrecked' gain traction, the year's entire Top 10 may turn out to have been sequels."
Next year doesn't seem to be much different. "In 2012, much like this year, the major studios will offer about 10 sequels or reboots ... featuring the return of proven draws like Spider-Man and the Bourne spy cycle, this time with Jeremy Renner as a new hero."
But is this a bad thing for theaters? It actually seems gravitation toward familiarity has helped Hollywood stay afloat.
"There may be pleasure to be found in something new and different, but there's also the risk of being disoriented or disappointed," says Martin Kaplan, the Norman Lear professor of entertainment. "Sequels are a kind of comfort food."
Indeed, Cieply notes with a heavy sigh, "One after another the more original studio films in a variety of genres failed to draw a really large number of viewers this year."
Business section: Investing ideas
Interested in following the cinematic trends? Take a look at the following movie production/theater stocks trading on the U.S. exchange.
Will 2012 be a good year for these names? List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)
1. Cinemark Holdings
2. REGAL ENTERTAINMENT GROUP
3. DreamWorks Animation
4. Lions Gate Entertainment
6. Rentrak: Provides content measurement and analytical services to companies in the entertainment industry. Market cap of $150.26M. The stock is a short squeeze candidate, with a short float at 6.38% (equivalent to 12.54 days of average volume). The stock has lost 54.45% over the last year.
7. Carmike Cinemas: Operates as a motion picture exhibitors in the United States. Market cap of $88.71M. This is a risky stock that is significantly more volatile than the overall market (beta = 2.63). The stock is a short squeeze candidate, with a short float at 6.54% (equivalent to 8.82 days of average volume). The stock has lost 10.82% over the last year.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Data sourced from Finviz.
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