At least one analyst is forecasting that U.S. box-office sales will fall 12% in the fourth quarter, mainly due to lower-than-expected attendance for 3-D movies like Gulliver's Travels.
Higher ticket prices for 3-D films -- which cost an average of $10.25, or $3.25 more than a conventional $7 movie ticket -- likely dissuaded many potential moviegoers, BTIG analyst Richard Greenfield wrote in a note to clients Monday. The 3-D glasses, which can be a nuisance for families with young children and give some people headaches, also hurt attendance, notes Greenfield, who added that recent results merely extend a yearlong trend.
And for the most part, the quality of the 3-D movies that came out this quarter failed to wow audiences as well. "While the horror and gross-out comedy genres may benefit from 3-D (think Saw 3-D or Jackass 3-D), the vast majority of 3-D movies this year have been disappointing at best (the exceptions being Alice in Wonderland, Toy Story 3 and Despicable Me)," Greenfield writes.
High Hopes Dashed
After the late 2009 release of Avatar, cinemas had hoped that 3-D movies would boost box-office figures this year. Fox's Avatar set all-time box-office records, both domestically and globally, with $2.78 billion in revenue worldwide and $760 million in the U.S., according to BoxOfficeMojo.com. About 80% of Avatar's U.S. box-office sales came from 3-D showings, according to trade group National Association of Theatre Owners (NATO).
But that high demand failed to carry over to most other 3-D movie titles this year, and the lack of interest has spread to the living room as well. Makers of 3-D televisions have cut prices by more than 40% on some models during the holiday season. Meanwhile, research firm DisplaySearch in October lowered its 3-D TV shipment projections to 1.6 million in North America for this year from its previous forecast of more than 2 million in the summer.
Such lackluster sales have been a huge disappointment for the industry, which rolled out a plethora of 3-D sets at the Consumer Electronics Show earlier this year.
With theater attendance down, Greenfield cut his fourth-quarter earnings forecast for movie-theater company Regal Entertainment Group (RGC) by about 40% and maintained his "sell" rating on the stock.
Regal shares fell 1.6% to close at $11.95 in New York Stock Exchange trading on Monday.