DOOMSDAY LOOPS — THEY’RE NOT JUST FOR SAN FRANCISCO ANYMORE! Hollywood’s Theatrical Business At Risk Of Entering “Negative Feedback Loop”, Wall Street Analyst Warns.
Hollywood is at risk of entering a “negative feedback loop” with fewer wide movie releases and a shrinking theater footprint combining to squeeze box office revenue, a veteran media analyst says.
In his annual assessment of the theatrical sector, billed as a “memo to Hollywood,” TD Cowen analyst Doug Creutz notes that he has taken a “bearish stance” on the theatrical window for some time. Results from 2024, with total grosses slipping 4% from 2023 to $8.57 billion, the number of wide releases down 6% from pre-Covid levels, and other factors have only reinforced his view.
“We have said for several years now that the outlook for a sustained recovery looks questionable, and that we don’t think the existing global theatrical footprint can be supported solely by a handful of blockbusters,” Creutz wrote in the 20-page report.
The number of screens in the U.S. has declined to about 35,000 from 41,000 before Covid struck in 2020, with exhibition also facing big challenges in 2023 and 2024 due to the strikes. That smaller footprint might help theater owners in the near term, but it could end up hastening the decline of the overall business, Creutz believes. Downsizing “risks having more films skipping theatrical and going direct to streaming services…and now you have all the ingredients for a negative feedback loop.”
Creutz emphasizes that he is “not calling for a complete collapse of the theatrical window, but we think box office is more likely to decline than rise over the next few years, particularly as major studios continue to cut back on the number of films they make in favor of concentrating their box office efforts in fewer, bigger, established IP films.”
Found via Michael Walsh who adds, “The Industry must wean itself from its green-eyeshade addiction to comic books and wokism if it is to have any chance of salvaging the theatrical model — which thanks to streaming, it probably doesn’t.“