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Deflation: At a Movie Theater Near You

Originally published by FX Street on June 25, 2018 Read the original article.

Elliott Wave International has been keeping subscribers updated on signs of a developing deflationary trend.

Just focusing on one example, the November 2016 Elliott Wave Financial Forecast noted:

The movie business broke lower, as the autumn box office (September 8 to October 18) fell 16% from record levels a year ago.

Since then, tough times have continued for movie theater chains.

Just look at some of these headlines from the past year:

  • Theaters taking hits from movie viewing at home, weak box office (USA Today, Aug. 2, 2017)
  • Time to Panic: Inside the Movie Business’ Summer of Hell (Variety, Aug. 9, 2017
  • … Struggling Movie Theaters Go Upscale to Survive (WSJ, April 9, 2018)

A June 25 FX Street article titled, “Movie-Theater Deflation” provides analysis. Here’s an excerpt:

Desperate to drum up business, America’s largest theater chain has made a last-ditch offer to moviegoers:  Pay a monthly fee of just $19.95 to see up to three movies per week. This is a variation on MoviePass, which at one point offered four movies a month for under $10 at participating theaters. That may sound unbeatable, but it didn’t stop AMC from trying. …

It is predictable that neither MoviePass nor AMC’s new-and-improved version of it will succeed.  The AMC chain, with more than 8000 screens and not nearly enough ‘product” to fill them, may be able to reduce operating losses and slow its rapid death spiral by selling more popcorn and beverages. But the current owners of MoviePass, Helios & Matheson Analytics [Nasdaq: HMNY], will bathe in red ink until the company goes bankrupt. Their business model was so badly conceived to begin with that investors in the company might have done better drilling for oil in suburban bowling alleys.

You can read the entire article by following the link below:

https://www.fxstreet.com/analysis/movie-theater-deflation-201806250509

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