A Slow Start To 2016 For New Theatrical Hits Is A Trend That Bears Watching

New theatrical releases drive the home entertainment market.   Period.

Sure, this category only accounts for 4.8 percent of all DVD releases and 25.9 percent of all Blu-ray product offerings (a significantly higher percentage since many popular DVD release categories — Special Interest, Fitness, Kidvid, etc. — don’t translate well to the HD market place), but this category disproportionately generates revenues well beyond the respective SKU release shares.

With this said, the opening stanza of 2016 has been nothing short of a disaster for new theatrical release trends.   Yes, it is early.   And yes, the East Coast did get hammered with a major blizzard that disrupted commerce over one of the four weekends during the month of January.   So things could change; things could improve.

If last year (2015) was bad with just 94 films grossing in excess of $25 million, then 2016 is going to blow that away with potentially the worst crop of box office hits in the past 20 years.  That is, if trends hold.

Using the past five years as a baseline, roughly 7.5 percent of all theatrical releases for the year have already made their way to theatres.   If you compare the results for 2016, the market is currently pointing to 100 fewer films being released overall and only 82 of the combined number having the potential of grossing in excess of $25 million during their theatrical runs (industry average, for a point of reference, is about 102 per year).

It is all but certain that these numbers will improve.   They have to … there’s no way that “Hollywood” would only generate a crop of 82 films in one year with a box office take in excess of $25 million.   

It can’t happen, it just can’t happen, but if it did happen, there would be blood in the streets.   There would be a massive meltdown of the entertainment industry’s social and economic order.   We’re talking about a zombie apocalypse!

It is still early, we can keep telling ourselves that.   New theatrical releases drive all downstream revenue pools — VOD, home entertainment, cable, etc. — so the industry can’t live with that sort of pending disaster.   The numbers will improve as the weeks roll by and order will be restored … until then, a close watch on this unsettling trend bears close scrunity.