There are many factors that could be contributing to the global decline in box office revenue and Cineplex’s recent struggles. For instance, the film industry as a whole is still reeling from the 2023 Writers Guild of America Strike. As Vulture reported, many films that were slated to come out in 2024 were delayed or pushed back to 2025 due to the strikes, including Captain America: Brave New World, Thunderbolts, and Disney’s Snow White. Considering that three Marvel Studios films (Avengers: Endgame, Spider-Man: Far from Home, & Captain Marvel) and two Disney live-action remakes (The Lion King & Aladdin) each made over $1B USD globally in 2019, these delayed films could have been huge sources of revenue for cinemas this year had they released on schedule. In general, the current gap in the superhero film genre has left a lot of revenue on the table. Marvel Studios and DC Studios each released only one film this year, as both studios took some time to revamp their future film lineups, presumably due to poor performance and fear of “superhero fatigue.” Sony Studios is still set to release Kraven the Hunter and Venom: The Last Dance, which could prove to bump up 2024’s overall box office. Streaming is also an ever-present threat to cinemas; the decline in box office revenue since 2019 coincides with the rise in subscribers of streaming services such as Disney+, as evident in the graph from Backlinko.

Macroeconomic consumer trends completely unrelated to the film industry could also be at play. According to RBC, while Canada’s economy is not technically in a recession, it shows strong recessionary symptoms. GDP per person has fallen, unemployment has risen, and household purchasing power has deteriorated due to the high interest rates and inflationary levels of the past few years. Any growth in the Canadian economy can mostly be attributed to “a wave of new consumers arriving from abroad,” and this high GDP does not accurately reflect the cost of living crisis that many Canadians are experiencing. Amidst this crisis, it's understandable that going to the movies isn't a priority for most Canadians.

Despite all these contributing factors, however, theatres like Cineplex have done a commendable job fighting to stay relevant in the face of overwhelming odds. Cineplex’s strategic efforts have been key to their survival amidst market downturns and dwindling theatre attendance. For instance, in their aforementioned September press release, Cineplex attributed Alien: Romulus’s success to the significant number of guests who “opted to watch it in premium experience formats like VIP, Ultra AVX and IMAX.” Cineplex also emphasized their greater focus on international programming when compared to their competitors, “with 9.4% of the August 2024 box office coming from international titles, compared to [their] North American peers at 2.45%.” Promotions also helped attract price-sensitive consumers. Back in February, Cineplex offered movie tickets and a small bag of popcorn for $5 each every Tuesday of the month. In their press release announcing this promotion, Cineplex’s EVP and Chief Marketing Officer Sara Moore touched on consumers’ nostalgia for simpler times, and harkened back to the days of the “‘late nineties when Canadians were running to see iconic movies like Star Wars: Episode 1 - The Phantom Menace … and The Matrix.’”

From a broader management perspective, Cineplex has also made some key developments in 2024. In their aforementioned Q2 2024 Press Release, Cineplex announced a normal course issuer bid to acquire 6,318,346 common shares of Cineplex, which they believe “would be in the best interests of the Company and its shareholders and would represent an attractive and appropriate use of available funds.” This normal course issuer bid follows the “comprehensive refinancing” that Cineplex completed and announced last March, which included redeeming notes and repaying credit, amongst other activities. Cineplex have also made significant investments in the non-film sectors of their business, with plans to open two new Rec Room locations and one new Playdium location during the fourth quarter of 2024.

Even smaller players in the Canadian cinema industry have taken steps to bring audiences back into the theatres. My favourite local Toronto theatre, Imagine Cinemas at Carlton Court, uses throwback films, special showings, and discounts to get people in seats. Last week they wrapped up their 8-week Harry Potter movie marathon, which transported audiences back to Hogwarts every week for just $5 a ticket.

What lies ahead for Cineplex and the film industry as a whole? Despite recent flops and low viewership, I expect theatres and the film industry to survive the long haul. With that being said, both sectors undoubtedly need to continue adapting to changing times. For starters, film studios might need to desaturate the market and trim their yearly releases. Marvel Studios have seemingly already caught onto this trend based on their reduced 2024 film slate. Furthermore, as the North American economy continues to recover from the aftereffects of COVID-19 and buying power is restored to consumers, discretionary spending should slowly return to pre-pandemic levels. Genre experimentation could also be a potential route for filmmakers to attract new audiences. Last July, actor Glen Powell spoke to The Telegraph about this very topic, highlighting how studios underestimated his recent films Hit Man and Anyone But You due to their unpopular and seemingly less profitable genres: “‘One of the things that I’ve realised recently is that when studios say a genre is dead, all it means is that there’s a huge opportunity, because a market is not being served. The business stopped making romantic comedies, apparently, because romantic comedies weren’t making any money in theatres. But my belief is there’s no problem facing Hollywood that can’t be solved by a really good movie.’”

I agree with Powell. Despite the difficulties facing the film industry, well-made movies will always have an audience to exploit. And there’s a slew of anticipated films set to release in the remaining months of 2024 that may yet surprise us with their success, including Moana 2, Sonic the Hedgehog 3, Gladiator 2, Mufasa: Lion King, and Red One, among others listed by IMDB.

As for cinemas like Cineplex, I believe that they must weather this current storm and continue to innovate in the face of declining theatre attendance. Their current strategy of focusing on delivering a comprehensive, recreational experience through premium theatre formats such as VIP and investment in play centres such as Playdium is a wise one. Against the low-cost alternative of streaming services, Cineplex is positioning itself to consumers as a unique, comprehensive, luxury, and non-imitable experience that is worth the high price tag. If their promotions can continue to generate interest, and attractive films come down the pipeline, Cineplex is poised to succeed in the latter half of the decade.