The summer season is upon us, which means major motion picture studios are set to release highly anticipated, and potentially lucrative, films and sequels. Marvel Entertainment’s Captain America: Civil War, which opened at the beginning of May, currently tops the domestic box office list for 2016, grossing nearly $398.0 million, according to data published by Box Office Mojo. Upcoming releases include a number of sequels, such as Disney-Pixar’s Finding Dory, 20th Century Fox’s Independence Day: Resurgence and Paramount’s Star Trek Beyond. Movie theaters, threatened by lower attendance and the rise of streaming media, will attempt to woo Americans to the silver screen over the next couple of months, while retailers and merchandisers partner with studios and film franchises to generate product-related revenue.
The Movie Theater industry is highly seasonal and generates a significant portion of revenue during the summer and holiday seasons. In 2016, IBISWorld expects the Movie Theater industry to post about $15.0 billion in revenue, largely due to higher ticket prices and concession sales. The long-term trend in box office sales indicates a plateauing of theater attendance, as the media environment evolves with the adoption of new technology. Streaming sites, such as Netflix and Amazon Prime, continue to add subscribers, while studios experiment with alternative release strategies. Theater operators, facing mounting pressure from all sides, have responded by focusing on enhancing the movie-going experience and raising ticket prices. Consumers who attend the theaters this summer may notice a couple of changes; operators are expanding concession offerings (in certain cases offering full dinner options and alcoholic beverages), investing in luxury seating and concierge services and offering a variety of promotion and partnership programs. However, these efforts will continue to depend on the popularity and buzz of certain films and the success of the summer season.
Other industries will take advantage of the release of popular movies, particularly among younger demographics. This summer, a number of talking animal movies, including Finding Dory, Teenage Mutant Ninja Turtles: Out of the Shadows and The Secret Life of Pets, are hitting the big screen. These kid-friendly flicks are expected to bring in millions in revenue, not only for movie theatres, but also the $18.5-billion Pet Stores industry. For example, after the 2003 release of Finding Nemo, pet stores reported a dramatic boost not only in tropical fish sales, but also in sales of tanks, filters and other aquarium accessories. Pet stores experienced a similar spike in demand for turtles and turtle care products in 2014 following the summer release of Teenage Mutant Ninja Turtles. This year, these animal movie releases are expected to boost pet store revenue 4.5%.
Operators in the Toy and Hobby Stores industry are also cashing in on this summer’s flicks. With numerous films based on already popular stories or characters, such as X-Men: Apocalypse, Star Trek Beyond and Ghostbusters, coming out, toy stores are expected to experience a boost in sales of video games, action figures and licensed apparel. Although the vast majority of toy sales are made during the holiday season, summer movie releases provide an opportunity for retailers to boost sales in the slower months. In 2015, for example, dinosaur-related toys and games became immensely popular following the release of Jurassic World. With industry revenue expected to rise only 0.2% this year, promoting merchandise from popular summer blockbusters will be crucial.