Time to Panic: Inside the Movie Business’ Summer of Hell

Summer Box Office Hell Flops
Illustration: Variety

Adam Aron sounded exhausted.

The AMC Entertainment CEO had suffered a bruising week, watching the exhibition company he leads lose 27% of its value in a matter of hours after alerting analysts that its upcoming quarterly earnings would be worse than anticipated. On Aug. 4, having unveiled a calamitous report that saw the country’s largest theater chain drown in losses amid an industry-wide box office plunge, he was blunt.

“To say we were disappointed would be an understatement,” Aron said. “The quarter was simply a bust.”


Male Action Stars vs Wonder Woman

As ‘Wonder Woman’ Soars, Movies Starring Men Fail to Connect at Box Office

AMC isn’t the only company hurting. All along the movie business food chain — from the studios that make the films to the companies that bring them to consumers — it’s been a summer of hell. Flops such as “King Arthur: Legend of the Sword” and “Baywatch” are dragging down the box office. Ticket sales are down 10.8% so far this summer and are off nearly 3% year to date. Theatrical revenues are expected to fall through the next two months. Over the weekend, the top-grossing new release, “The Dark Tower,” opened to less than $20 million. During the same weekend a year ago, “Suicide Squad” kicked off to $134 million. Summer’s supposed to be the most profitable time of the year for studios — in 2017, they can’t wait to put their swim trunks in mothballs.

Analyst Jeff Bock attributes the poor box office performance to one factor — “and that’s the over-reliance on sequels catching up to Hollywood,” he said. “Every one save for ‘Guardians of the Galaxy Vol. 2’ disappointed.”

The threat of digital streaming has also grown, catching up to studios, Bock argues. In the battle for viewership in a fragmented media landscape, studios are losing.

“The talk of last summer was [Netflix’s] ‘Stranger Things,’ and the talk this summer is [HBO’s] ‘Game of Thrones,’” said Bock. “It used to be ‘What’s playing this summer in theaters?’”

Nicole Rifkin for Variety

That, in turn, is triggering an intense selloff of exhibition stocks. Since the beginning of August, the top four theater chains in North America lost $1.3 billion in value. The bleeding may continue as the box office slide accelerates. If the second quarter was bad, just wait until the next one — estimates are that ticket sales could fall 15% year over year.

The major studios may be the ones being punished for raiding the franchise larder too many times, but it’s been a downright brutal few weeks for independent players. EuropaCorp stands to lose tens of millions on “Valerian and the City of a Thousand Planets,” a $180 million passion project from founder and director Luc Besson that will be lucky to hit $60 million at the domestic box office. Broad Green, the independent studio behind “A Walk in the Woods,” announced it was shuttering its production division and laying off 20% of its staff after years of flops.

The uncertainty is also inspiring consolidation in the indie space. Open Road, which backed 2016’s Oscar winner “Spotlight,” sold to Tang Media on Aug. 7 for an undisclosed sum, while Hasbro nearly snagged Lionsgate last week before talks broke down.

New independent distributor Annapurna scored a critical hit with its first release, Kathryn Bigelow’s “Detroit,” but the $30 million-budgeted drama about the 1967 riots will struggle to break even despite a major marketing push.

It would be easy to pin the blame for Hollywood’s hard times purely on the movies. But the issues go beyond mere quality control. One thing that the industry has been particularly skilled at in recent years has been unearthing new sources of funding; from Germany to China to Texas, studio suits have scoured the globe using the soft power of red carpet invites and selfies with movie stars to separate wealthy investors from their cash. But the dumb money has smartened up. Tired of losing its shirt on would-be winners like the “Ghostbusters” reboot and “The Brothers Grimsby,” Lone Star Capital pulled the plug on its slate financing deal with Sony in July. The studio spin is that the deal wasn’t a good one and that it doesn’t need the funding. That’s good, because according to one executive who met with Sony about taking over the Lone Star pact, financiers aren’t interested and weren’t impressed with the studio’s upcoming releases.

Then there are the China headaches, a series of countrywide contractions that are endangering the movie business’s most promising source of growth. This week, Viacom executives will travel to the Middle Kingdom to try to rescue $500 million in financing from Huahua after the media company missed a June payment to Paramount. Their trip comes as Dalian Wanda, the conglomerate that helped kick off the Sino spending splurge in Hollywood with its purchase of Legendary and AMC, is selling off some $9 billion in tourism assets to service its debt.

Stan Rosen, a longtime Chinese politics and society expert at USC, said that the country’s newly enacted restrictions on foreign investments abroad will usher in more selective investment in industries beneficial to China. “They’re going to look very carefully at any investment,” he said. “The message is clear that just because you can sign a deal with some foreign company doesn’t mean it’s going to be approved.”

Aynne Kokas, a University of Virginia professor and author of “Hollywood Made in China,” said the pullback in foreign investment is contributing to the film industry’s anxiety about China. The country is in the midst of a political transition, choosing new leadership for the Chinese Communist Party. Studios are also negotiating a new yearly film quota with Chinese officials, with the added tension of an audit that could show fraudulent box office reporting by Chinese distributors.

Because China’s film industry hasn’t grown as quickly as expected, American studios may have leverage. Kokas predicts the quota will be raised but warns that until that happens, there will be “continued uncertainty.”

Both Kokas and Rosen believe that the restrictions on foreign investment will be lifted, but the slowdown is leading to panic across studio lots. It’s also true that things could improve by next summer, when studios will try to lure moviegoers back to theaters with “The Incredibles 2,” “Jurassic World: Fallen Kingdom” and the Han Solo “Star Wars” spinoff. The theory seems to be that audiences still like sequels … to the right franchises.

Eric Wold, senior analyst at B. Riley & Co., is not convinced that 2017’s poor summer box office is cause for alarm. “People tend to overreact a little bit when you get a short-term period of box office weakness,” Wold said. “The first reaction is some kind of systemic problem with the industry.”

Barring some tectonic shake-up in consumer tastes, the box office will likely rebound. But in a world of digital giants and communications titans, movie companies are looking downright diminished. Take AT&T’s $85 billion purchase of Time Warner (a deal that is still waiting for a government rubber stamp). The telephone conglomerate is shelling out big money for the company behind HBO and Warner Bros. Yet even with all that cinematic and small-screen firepower, Time Warner will contribute less than 20% of its revenues. Are we moving toward a time when blockbuster movies and watercooler shows are something that gets thrown in with a more expensive phone plan?

Someday, and that day may be fast approaching, content won’t be king. It will be additive.

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  1. Sylvia Ortez says:

    I boycotted them for the attacks on the American people who voted Trump. They are actors not politicians. Very few have education. Most are left side brain & they had the nerve to threaten Americans with their talent. I have no use for Hollywood & their sick mentality!

  2. The Whore says:

    You guys boycotted Star Wars last year and it was the biggest hit of the year LOLOLOL

  3. Many Republicans are boycotting Hollywood. We have had it with their offensive Stalinism, slander and libel. Star Wars is already a flop and DOA, they just don’t know it yet. Note all of the foreign movies from Europe and Israel on NETFLIX and Amazon, they are catering to more demand from Trump supporters. We a done with Hollywood. Go look in the mirror and smear yourselves. Pay yourselves too!

  4. gloribeago@gmail.com says:

    As a conservative I made it a point NOT to go to any movies. As long as Hollywood remains political I will stay home. It is hard to have any respect for an actor that runs at the mouth. Also, quit teaming up 20 year old girls with 50+ year old men like with The Mummy. It is disgusting and makes all women cringe. Who wants to see that or think of it? Only 50+ year old men I would guess. So grow up Hollywood quit using 40 Yr old women for the mothers of 25 year old actors, no one believes it. Quit using blue eyed children who grow up to be brown eyed adults, it is not believable. Quit politicking. Quit using actors who are political.

  5. Leda says:

    You know what I’d like to see a remake of? Triumph of the Will.

  6. Kris says:

    Always have loved going to the movies, still do. I didn’t go to very many films this summer, but that’s for one simple reason. Most of the movies sucked.

  7. Keith Glass says:

    Like the Recording industry and the Publishing Industry. . . . movies don’t NEED a venue anymore. My chairs are more comfortable, the sound system is superior, the snacks are better, I can pause to hit the bathroom, and roll back over a scene on the fly.

    The lack of people on their phones, shrieking children, and people talking is a bonus. . .

  8. I want to be entertained. The constant negative comments coming from the entertainment industry about politics diminishes the value of my dollars. Not going to feed the monster that grinds away at my quality of life. A social rule in my life limits what I share about my political views. I will not provide my support for any industry that does not respect the choices and beliefs of the patrons they need to be profitable.

  9. Roger Berning says:

    Well maybe the $17 for a nacho’s and a drink for one person also has something to do with it,

  10. Strange. This writer seems to be blaming the (soon-to-be-formerly) easy money flowing into studios and (soon-to-be-nonexistent) indies? That doesn’t explain why these suits were making movies people didn’t want to see.

  11. JJ says:

    Only idiots blame politics for a poor performing movie, no one in Dunkirk is a fan of Trump.
    If all the stars of the next Star Wars cone out and bash Trump, that movie will still break records.
    Too many movies this summer are made poorly, bad plot for The Mummy, poor marketing for Baywatch. Just overall unfortunate acting and plot for Valerian. King Arthur was never going to sell, the story has been done way too many times.

  12. Jeff says:

    Not much mention of politics affecting who is going to movies. I personally know many people who used to go to movies all the time, but see very few now due to what actors have been saying about President Trump. I would say this is the most significant factor in domestic box office sales. Wonder Woman and Guardians were both very non-pc. Many actually saw WW because it was seen as anti-pc, especially in light of WW losing her status as an honorary UN ambassador for the empowerment of women and girls.

    • Cheryl Holt says:

      Almost overnight, Hollywood actors are turning many off with their fist in the air — snarky, bitchy, accusing, now-it-all, elitist attitude. Acting so superior. Assuming authority they do not have. Lecturing the rest of us. Making threats. Comedy has turned vicious and black. Proving how out of step they are. Ignorant. Hollow. Clueless.

  13. Joanne Ransing says:

    I loved the movies as a child. Later I took my own kids and now my grandchildren, Sadly, I will probably never see another one, As long as Hollywood insists on being a mouthpiece for extreme left hatred, I cannot morally or financially support them.

  14. David says:

    been sayomg this-nobody tals about films anymore beyobd small pockets like NY & LA. stranger things last year, you name it this year-the heat has moved to tv/streaming.
    the theater experience is a mess too-overpriced with idiots on their phones, who needs it.
    I used to do 40 films in the theater a year, now only something like Dunkirk will get me there.
    time to rethink the domestic offerings Hwood, hlobal receipts can only get you so far…

  15. mark christensen says:

    I hate the movie industry in America due to lack of ideas and the constant remaking and putting out crap that stinks. i have my own big screen and big sound and subwoofers to entertain me at home for watching movies. why go the theater anymore and spend money on stuff that just isn’t worth my time? Dbox and other gimmicks to draw people in is a joke. you can’t sugar coat a turd. my daughter would rather watch stuff on her cellphone which says alot for that generation from the late 90’s and on.

  16. kern says:

    It has been apparent for quite some time that with the unprecedented plethora of viewing entertainments and the concomitant increase of viewing platforms that the theater exhibition business will necessarily have to contract to a major extent (I have cited this in discussions about the futility of the addition of new exhibition sites to replace the disappearing retail stores).

    Demonizing those who do not share Progressives’ views about the world we all live in as ignorant, hate filled, xenophobic, racist and homophobic can only exacerbate the situation. Many are fed up with both parties, the media, and the wealthy permanent powers who own them lock, stock and barrel along with the shameful and dishonest war that they are waging against the President, the police, and the power of the people. Their promotion of racial and class animosity is hateful and, in particular, is causing great harm to the most vulnerable members of the African-American community.

    I am certain that I am not alone in having my buying habits effected by the blind, ignorant hatred of the smug entertainment community. I will not attend the B’way musical War paint because of the despicable Patti LuPone having spat out in a red carpet interview that she would not perform for our President “because he’s a MOTHERFUCKER” I no longer subscribe to Vanity Fair because of its arrogant elitist editor Graydon Carter (so utterly certain that he and his colleagues had totally destroyed Trump’s candidacy) who boasted that he had invited that he had invited Trump (among others) to his elitist parties so that he and his friend’s could laugh at their boorish inferiority, and that they were too dumb to know that they were being laughed at. This is a small fraction of my behavioral changes in response to the unmasking of the hateful elitists who despise and think that they should rule so many Americans.

  17. Job says:

    Ummm, is everyone forgetting the fact that quite a few “stars” and “directors” have alienated at least 50 percent of their audience by trashing their audience’s politic and family choices? Throwing words like deplorabe, homophome and such other nonsense with projectile hatred kinda makes people prefer pirating and Netflix instead of putting money in the pocket of someone like Alec Baldwin, Meryl Streep or Apatow and many others. That is at least a portion of the problem…the hateful infantile insulting of people that don’t think like them and the vile spewed toward a president millions voted for.

    • The Whore says:

      Figuring that only 26% of the country voted for him, that’s not an issue at All

    • HSB says:

      Awesome! Because there are no liberal celebrities on Netflix, as we all know!

    • Tell It says:

      Nonsense. God, you tRumpettes try to politicize everything. Get over it. Has NOTHING to do with a slew of bad movies. PS Your guy lost by 3 million votes and has an approval rating of 34%. So his situation is far worse than that of the movie biz.

    • JR says:

      That has nothing to do with it. Baldwin’s Boss Baby was a hit with families. And one cannot blame them if they say vile things when the White House is currently occupied by the vilest person one can imagine in that office. The liar-in-chief can’t be ignored…he won’t let us.

  18. we all need to stop lying to ourselves its nothing to do with this article, its to do with extortionate prices cinemas charge now. Ok its only £10 per person but when you have 3 kids its £40 just for tickets and about another £20-£30 on popcorn and drinks, the industry is getting ruined by cinema prices. With it being so expensive to go people arent going to pay money unless its a known big film. If prices were slashed at the cinema it would change. I actually buy a yearly pass for £190 which isnt bad but still isnt cheap.

    Next you have a problem with peoples reviews, before anyone has even gone to see a film and judge for themselves they read reviews and basically half these films are trashed before anyone has even seen them. Again what needs to be done is ban reviewers from coming to red carpet events. Make them see it like anyone else the day it comes out officially. This way films cant be run into the ground before they have even been seen.

    • Jeff says:

      I know several people who wanted to see boss baby but couldn’t get past baldwins voice, kinda like how many people can no longer watch finding dory. Both movies were successful at the box office but are widely mocked, boycotted, and banned.

    • tony says:

      silly to try and ban reviewers as that will send out an even more negative message about the film the studio is releasing.

      • Tell It says:

        For sure cost is part of the problem. Very few movies are worth paying a $12 admission for when you can see them 6 months later for $4 in your home – if you watch it at all.

  19. tony says:

    all the real hits seem to come out jan-april and then oct-dec now.

  20. Tanner Graban says:

    People don’t want to see Valerian with it’s shitload of CGI and no name actors. And people don’t want to watch Baywatch when it takes every cliche Hollywood actor and throws in cliche ‘beachlife’ plots. The problem is that studios are not releasing movies that anybody with tact or class wants to see, people only go to movies if they look interesting, and look like they’ll be quality content. None of the big summer blockbusters were that good.

  21. ardenlord says:

    I agree that this summer was terrible for movies, but this article ignores the summer’s biggest success, Wonder Woman. Why not even a mention?

  22. Greg Price says:

    Isn’t this like the 2nd or 3rd time in the last 7-10 years we’ve been here with “worst summer ever” type talk?

  23. Rod Labbe says:

    Maybe it’s just that the studios are producing crap–like another Mummy movie or a redo of a cheesy TV show like Baywatch. Stephen King has NEVER been a winner at the box-office, so expecting The Dark Tower to be a smash is just wishful, stupid thinking. Where are the Jaws, the Star Wars, the innovation that used to mark summer viewing at the cinema? All we get now are sequels or “part twos” or junk. Thank God the Christmas season has better quality films, but only slightly better.

    • feingarten says:

      just curious but I thought King’s films have earned over 1 billion with an average # of screens of over 1,500. Average box office/film is almost $27million domestic ? Perhaps that is paltry and means nothing

      With the release of Dark Tower, I’m sure this will contribute further to his box office total

      Hasn’t the studio behind Star Wars begun releasing these films on a yearly basis and some might argue diminish their ‘excitement’ value. But with these newer Star War films performing exceptionally well, that’s not likely to change.

  24. Mr.Mike says:

    In a way, the movie studios are doing the right thing, betting big with spectacles in order to get attention away from more mediocre internet entertainment content. They couldn’t achieve that with dime-a-dozen dramas and actioners. The other side of the coin is that the failures are more visible and more costly.

  25. Bob Murdoch says:

    To commandeer an old phrase…. It’s the Movies, stupid. People won’t spend $100 for the family to go watch a movie with a 10-40% on Rotten Tomatoes anymore when it will be on Netflix in 5 months. Ditto for movies like Detroit that doesn’t really benefit from the big screen. Guardians and Wonder Woman showed they will show up en masse when the quality is decent. Should be a much better fall with Thor, Justice League, and Star Wars coming back, and next year should be a monster with better content already wowing them at ComicCon. Was going to see Valerian, but reviews scared me off. I’ll wait for it to hit PayTV.

    • RatBasterd says:

      I’d like to coin a new phrase….

      It’s the marketing, dummies.

      Opening weekends belong solely on the shoulders of marketing and no one’s coming up with the angles that will sell the releases, especially Detroit.

      Creed proved people will come out for a drama. La La Land proved people will come out for a drama. And don’t throw the musical angle at me because no one thought a musical would make $100M at the box office either, including whoever is gonna say otherwise. Split and Get Out also proved people will come out, but those were marketed extremely well.

  26. GhostofRogerAiles says:

    Comment asking for more storytellers like Spielberg…couldn’t make it through the trailer for “Ready Player One”. Adult dramas are now told better on TV and streaming services…theatres left with spectacle , which audiences are tiring of.

  27. many people who used to go to the movies weekly just aren’t going often anymore. that includes my wife and friends and i (who are outside the 18-30 age range target).

    why? i think, a combination of “the wrong people” (ie, people with poor taste) choosing what films to greenlight and then distribute, on one hand, and film critics with declining attention spans, agendas, conflicts, whatever, who simply can’t reliably advise audiences what to see. their reviews infect audience responses, as well (actually, variety is not, comparatively, as guilty of this problem).

    the best and most timely movie i’ve seen so far this year is one the critics, not including variety, really attacked: the tom hanks/emma watson film, “the circle”, which although elliptical and ambiguous was a good, entertaining film, despite the reviews. i read that “the circle” has been doing better overseas, with a 35 mill box office, double its production costs.

    there are other examples, as well. maybe there are just too many inexperienced critics, or they’re under pressure to write reviews for too many films, but it would be helpful if we thought we could rely on their reviews. another wonderful film we saw in a theater recently, “maudie”, with sally hawkins and ethan hawke, has been comparatively ignored by the critics and the distributors. so it’s become easier to wait for the dvd/vod releases and get what usually is a more reliable discussion of the merits of a larger group of films.

    finally, at the heart of the problem also are the “promoters”–it was once said that the studio’s decision to greenlight was based on the judgement of the promotional people. but that doesn’t work as well, anymore. studios need to hire “creative types” to take the forefront of the greenlighting decision–not to produce low interest indies but instead to, in some sense, return us to the eras of really good film-making. is it that hard to come up with a contemporary equal of, say, “raiders of the lost ark”?

  28. Emilio says:

    Solution: Make entertaining movies. I saw “Kidnap” over the weekend…no “Citizen Kane”…just an enjoyable ride with Halle Berry at the wheel. No extras. No CGI. Just a solid B movie.

  29. Nick says:

    The next big movie bomb, Bladerunner 2049, budgeted something around $200 million and then add marketing costs, for a sequel 35 years after the original, that was also a commercial failure. As much as I like the original, this was a terrible idea for a movie.

    There will be deep red ink on this one.

    • Deepdust says:

      You are going to look silly posting that in a few months, BR will not disappoint with DV in director’s chair.

      • Nick says:

        I am not addressing the artistic merit of the movie, in fact I never said anything about the movie being good or bad, In fact it could well be brilliant. But brilliant and $200 production cost + marketing for R rated movie based on a failed movie from 1982 spells commercial failure.

      • RatBasterd says:

        BR will go the way of Ghost In The Shell

  30. Jackson says:

    The Winter 2017 movies are where it’s at this year.

  31. Admiral Obvious says:

    First and last movies are just not good and the premium prices being charged are killing the industry. There’s very few up and coming decent actors just male and female models turned into actors. 99.99% of the screenwriters couldn’t pass Lit 201 at a decent state university (assuming it’s not been hectored by SJW’s and snowflakes into just giving participation grades) and that goes for the directors too. To quote someone’s favorite crazy Uncle…the chickens have come home to roost!

  32. Brian Weiner says:

    Great plot + Great performance + Great directing = interesting film. Hollywood went through such an escalation in costs, with Above the Line talent requesting ridiculous fees, how could the model continue? It lead to the Lowest Common Denominator films being made with zero plot (because clearly everyone in all other countries can’t follow a plot according to common ignorance) and all action and visual effects. Let’s face it, since the release of Avatar, what was the last visual effect movie that was so riveting that you had to see it for the effects??? NONE.

    Wonder Woman worked because the plot was good, the acting was good, the direction was good, and audiences discussed it. As long as Hollywood plays to the Chinese box office, domestic films are going to slump in most cases…. they are boring! Bring back filmmaking styles like Capra, Wilder, Coppola, Scorsese, Spielberg… and the hundreds of directors/writers who understand that a movie can be AMAZING without all the effects, just a great story, actors and a director who knows what to do with it.

    That’s just my opinion. I could be wrong.

  33. millerfilm says:

    Bad Movies = Bad Box Office. No tears for you useless Hollywood execs.

    • Sean G says:

      This an uninformed statement. Detroit… War for the Planet of the Apes… these aren’t “bad” movies, by any standard.

      • tony says:

        i think ‘war’ lacked the number of human characters that were contrast to caesar and co in ‘rise’ and ‘dawn’.
        woody harrelson wasn’t enough.

      • RatBasterd says:

        No. They were just poorly marketed.

  34. rocky-o says:

    two of the major issues in hollywood today are competence and competence…

    one… most screenwriters these days couldn’t write a good episode of ‘f troop’ no less write a movie that anyone would want to pay good money for…and those that are subjected to reboot upon sequel upon reboot upon sequel are probably as tired of it as we are…difference is…they get paid to make it and we have to pay to see it…

    two…casting directors are focused on young actors to try and draw in a younger crowd…problem is…these young actors can’t act…they wouldn’t even get an audition for a bad episode of ‘f troop’ no less should they be starring in a major motion picture…i don’t know if it’s a generational thing, but hollywood needs to use what’s left of the acting generation that’s still around and actually knows how to act…

  35. Mike says:

    Content is king, big screen movie content has been bad for several years, this year, it’s really bad. I have ventured to the theater 8 or 9 times this summer and have been disappointed almost every time, save Wonderwomen and Spider-man (I was convinced Spider-man would be bad, I mean how many times do I have to see Uncle Ben die, but it was done well and somehow Ben was already dead?). I was embarrassed after taking a date to Dunkirk (I accept some of the blame). I really enjoy seeing movies in a theater and they don’t have to be that good. This year the scripts are just terrible, action sequences are more unreal than a video game, laughs are lacking, and prices are out of control. For the price of a movie and extras I can pay my Netflix, Hulu, AmazonPrime and HBO subscriptions for a month. I will not be going to any more movies this summer, but I am happy Game of Thrones is back on.

    P.S. If Jurassic World: Fallen Kingdom is not a post apocalyptic world overtaken by dinosaurs, it’s going to lose money.

  36. Audiences showed up–when movie was something people wanted to see. My view is audiences are getting more and more sophisticated, especially as learn rapidly from social media and web. Gimmicks that could get you through a weekend in the US before, won’t last past Thursday night screenings. Executives need to execute, plan properly, deliver quality entertainment, or find new jobs. It’s that simple.

    Welcome to the new world of entertainment as what is happening the US? Is a bellwether for the world.

    Entertainment industry simply has to get better and that’s NOT just the movies either, by the way. Is a great thing!!! Am just wishing were moving faster actually.

  37. heyitsron says:

    Insanity is doing the same thing and expecting different results. You’ve got tried and true shows. And you recast them not using original characters but pluck others from the maddening crowd. Others who have succeeded before in other movies but not in the show that was the viewing audience’s favorite. Bring ’em back. Let them get back in shape. They’re chomping at the bit. Most of ’em. And raring to go.

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