Lagging 2017 movie receipts put Hollywood on the defensive for 2018

When we look back on 2017, it may become the most important year for the box office in recent history, according to media analyst Paul Dergarabedian.

This year’s Hollywood box office will likely be about 3% below last year’s record-breaking gross. As of Friday, the overall box office had racked up $10.8 billion, compared with $11.1 billion in 2016 and $10.9 billion in 2015 at the same point. In each of the last two years the box office broke the $11 billion threshold, which had never happened before 2015.

Despite the industry suffering its worst summer box-office performance in more than a decade this year, analysts and studio executives remained upbeat on movie-going. It’s a cyclical business, they said throughout the year. It’s an industry reliant on changing product; the slate of films.

To boot, cinema chains faced constant pressure from continued digital disruption and threats of shrinking theatrical windows, which dictate how long films play exclusively in theaters before being available for home video.

Read: The biggest threat to movie theaters might be around the corner

Also see: Hollywood’s box office failures go beyond Rotten Tomatoes ratings

Studios and filmmakers then started a feud with film critics and Rotten Tomatoes, blaming them for poor box-office performances, and MoviePass HMNY, -8.55% the subscription service allowing moviegoers to see a film a day in theaters, sparked a buzz when it lowered the cost to $10 a month from as much as $50.

“There’s probably no other year where Hollywood has seen all the signs written on the wall at the same time,” Dergarabedian said. “This may be the most important year for the box office because finally all the chickens that have been out there are coming home to roost. We’re seeing that all the major talking points that maybe we thought were outliers are actually happening.”

Check out: How MoviePass plans to make money from its more than 1 million subscribers

In no way is he suggesting the end is nigh for movie-going. However, theater attendance, which has been stagnant since reaching highs in 2002, continued to suffer in 2017 despite cinema chains’s efforts to reel people back.

Shares of AMC Entertainment Holdings Inc. AMC, +1.68% the largest theater operator in the U.S., have dropped nearly 56% in the year to date. Shares of Imax Corp. IMAX, -0.64%  are down close to 26%, Marcus Corp. MCS, +0.55%  shares are down more than 13% and Cinemark Holdings Inc. CNK, +0.40%  shares are down more than 9%.

Regal Entertainment Group RGC, -0.04%  had seen shares drop more than 15% in the year before reports surfaced Nov. 27 that the cinema chain was in talks to be acquired by U.K.-based Cineworld Group PLC. CINE, +0.25%  Since then shares are up more than 17% and have now risen close to 12% in the year.

Where a handful of the year’s big budget and high profile films flopped — “Baywatch,” “Pirates of the Caribbean: Dead Men Tell No Tales” and “Snatch,” to name a few — there were plenty of surprise box-office hits as well.

Universal Pictures’s CMCSA, -0.60%  “Girls Trip” ($139 million), “Get Out” ($254.3 million) and “Split” ($278.3 million) all outperformed expectations., while critical darlings like “Lady Bird,” “The Big Sick” and “The Shape of Water” have helped generate some good will for the industry.

Check out: How Netflix’s ‘Bright’ compares to some of 2017’s biggest theatrical openings

Don’t miss: How Hollywood aims to change its culture of sexual harassment

“I think the industry needs to redefine what a box-office year looks like and what the seasons [for releases] are,” Dergarabedian said. “We focus a lot on the big movies, but we can’t just look at the blockbusters. We have to read between the lines for the smaller movies that can possibly become gems, like a ‘Get Out,’ or ‘Lady Bird.’

“Then again, maybe we’re overthinking it entirely and all these new rules that we’re trying to create to ‘fix things’ won’t matter in 2018.”

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