In a world where movie theaters have seen their stock prices soar, the studios are feeling the pinch.
But as the industry has struggled to keep pace with digital piracy, movie theaters are now having to spend more on advertising.
“The studios are in a tough spot,” says Paul Dergarabedian, an analyst at MoffettNathanson.
“They have to be very careful in how they spend their cash.”
The industry also is facing the specter of an aging population, which may affect ticket sales.
Some movie theaters in major cities, such as Los Angeles and San Francisco, are facing a demographic crisis.
In 2016, the U-Kanew, the nation’s largest movie theater chain, said it was losing more than half its audience, which includes millennials, women and minority audiences.
“We are in the midst of a demographic shift that we haven’t seen in years,” says Richard Thomas, U-konew president and chief executive officer.
“Our audiences are aging.
They are looking to have a better life.
They’re looking for entertainment, and they’re looking to experience it on a wide range of devices.
The question now is whether that’s enough to sustain a business that was once the envy of the world.”