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Summer boxoffice sales slump to 15-year low

Summer boxoffice sales slump to 15-year low

Summer is supposed to be the time of year when Hollywood rolls out its blockbuster films and rings up big sales at the box office.

That hasn’t been the storyline so far this year, at least not in North America.

Box-office sales in North America dropped to their lowest level in 15 years for a July 4 weekend and were down about 44 per cent compared to last year, according to media measurement company Rentrak Corp.

Box Office Mojo, says overall receipts in North America are down 17 per cent since the start of May.

In Canada, sales are down about 7 per cent in the April-June period according to National Bank Financial analyst Adam Shine, using data from the Movie Theatre Association of Canada.

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“There’s no denying that the movie slate materially under performed expectations,” Shine says in a recent note.

There are a number of theories about what’s keeping people away from the theatres – everything from the World Cup stealing captive audiences to binge-watching Netflix subscribers who can’t get off the couch.

Others say Hollywood just isn’t cranking out the hits like it used to – at least not ones that resonate with North American audiences.

“Transformers: Age of Extinction,” touted as the biggest film of the summer, appears to be lagging in North America but is a huge hit in China, where the overall box office is reportedly soaring by more than 20 per cent. The “Transformers” movie alone has generated US$134.5 million in China in its first five days, compared $121 million in the U.S., according to Bloomberg.

Chinese consumers are clearly becoming more influential in today’s global economy, but experts say the sluggish North American sales could also be due in part to movie studios testing new release strategies at home, which is skewing the numbers.

For example, some studios are moving away from traditional release dates such as the summer holidays and long weekends.

“While a slate that didn’t resonate strongly with the public is mostly to blame [for a drop in box office sales], so too perhaps is the movement of titles to traditionally quieter periods,” Shine says.

Paul Dergarabedian, a senior analyst at Rentrak, says cyclicality is “the nature of the beast” in the movie business, calling the overall 2014 season “normal.”

“The summer of 2014 was never expected to rival the blockbuster record-breaking summer of 2013 which had a massive start,” he says, citing hit films such as "Iron Man 3," “Star Trek Into Darkness" and "World War Z."

“The ups and downs of the box office have been going on for decades and in the face of ever broadening entertainment options and platforms the theatrical experience still holds its own,” says Dergarabedian.

While some movies haven’t lived up to their expectations so far this summer, he says there were similar results with some films last year.

“But the hits outweighed the misses.”

In fact, he’s forecasting that films yet to open in theatres, such as “Dawn of the Planet of the Apes," "Guardians of the Galaxy," "The Purge: Anarchy” and “Lucy” could help Hollywood recover from its box office drought so far this summer.