It’s turning out to be a record year for the domestic box office with total ticket sales amounting to $8.3 billion through the first eight months. And clearly, The Walt Disney Company DIS is once again leading the race. The U.S. box office seems to be rebounding, having recording one of the best summers in the past few years.
Although ticket prices have gone up, Americans aren’t shying away from shelling out a few extra bucks for a movie-watching experience in theatres. It goes without saying that despite the growing dominance of streaming giants like Netflix, Inc. NFLX and Amazon.com, Inc.’s AMZN Amazon Prime, movie theatres have not lost their appeal.
Record Domestic Ticket Sales
The domestic box office has sold more than 881 million tickets this year through Aug 26, surpassing 832 million in the year-ago period. Total ticket sales through the first eight months of the year amount to $8.3 billion. Footfall at theatres has been declining over the past few years. After a dismal 2017, analysts had predicted that this year too won’t be any different.
However, the success of a spate of big films has been helping the domestic box office, which according to Leo Kulp, analyst at RBC Capital Markets, is expected to garner $11.65 billion in 2018, scoring a new record. According to ComScore, ticket prices have risen around 4% this year, which is further adding to the revenues of studios.
Interestingly, the rebound in the domestic box office comes at a time when many have predicted a gradual death of movie theatres in the hands of streaming giants like Netflix and Amazon. Amazon has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Disney Leads the Race
The domestic box office rebound can largely be attributed to the success of big-budget films from some of the biggest studios. Disney once again is leading the race, accounting for 33% of total domestic ticket sales from Jan 1 through Aug 31. This year’s three top-grossing films — Black Panther, Avengers: Infinity War and Incredibles 2 — have come from Disney.
Black Panther alone has raked in $700 million in domestic sales, surpassing Titanic, to become the third-highest grossing film in the United States. Avengers: Infinity War comes in second, having made $678 million, while Incredibles 2 became the only animated film to cross $600 million in the domestic box office over the Labor Day weekend.
Disney’s command over the market is only going to strengthen in the days to come given that it will now own the studio and television assets of Twenty-First Century Fox, Inc. FOXA. This will give Disney access to a range of franchises like the X-Men and Avatar. Together, Disney and Fox account for 42% of the total domestic box office.
Other Studios Follow Disney
Universal Studios, owned by Comcast Corporation CMCSA, finished second, accounting for 13.1% of total ticket sales, with Jurassic World: Fallen Kingdom grossing $415 million. Its second-highest grossing film has been Mamma Mia! Here We Go Again, which as of Sep 3 has made $118 million.
AT&T, Inc.’s T Warner Bros. has a share of 11.9%, followed by a 9.6% share by Sony Pictures Entertainment, a division of Sony Corporation of America SNE. Fox accounts for 9% of the market share. Interestingly, the four of the top five films so far this year have been sequels. Understandably, franchise power has been helping the studios, and with an impressive line of films in the coming months, 2018 could well be turnaround year for the domestic box office.
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