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THE MULTIPLEX HANGOVER: WHY HOLLYWOOD'S BOX OFFICE RECOVERY IS STILL ELUSIVE

For investors in theater chains like AMC Entertainment AMC.N and Cinemark CNK.N, 2025 delivered a sobering reality check. For an industry that has spent years insisting it just needs more movies, North American box office receipts inched up to $8.65 billion last year, still see-sawing well below expectations and offering little evidence of a clean recovery.

According to analysts at J.P.Morgan, the problem is no longer simply how many films reach theaters, but how long audiences bother to stick around after opening weekend.

In its recent note, JPM argues that rising release counts masked a deeper strain on theatrical economics. While the number of wide releases moved closer to pre‑pandemic levels, much of the growth came from alternative content such as re‑releases, concert films, faith‑based titles and smaller movies. These releases lifted headline revenue but dragged down average box office per wide release, a key profitability metric for exhibitors.

More worrying for theater stocks is what JPM describes as an erosion in theatrical "multipliers", the amount of money films earn after their debut. Openings largely met expectations in 2025, but sharper second‑ and third‑weekend drop‑offs reflected shorter theatrical windows and faster migration to streaming. That dynamic limits repeat visits and caps concession sales, where margins are highest.

The strain is already visible in share prices, AMC Entertainment shares are down more than 53% over the past year, while Cinemark stock has fallen roughly 16% over the same period.

To compensate, theaters leaned more heavily on premium formats such as IMAX and selective, data‑driven ticket price increases. JPM now frames these tactics as essential, not optional.

Looking ahead, the brokerage forecasts a rebound in 2026 driven by a stronger slate of franchise films. But with more conservative assumptions around post‑opening momentum, the message for cinemas and their investors is clear, recovery may continue, but it will be narrower, riskier and far less predictable than Hollywood once hoped.

(Rashika Singh)

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(Terence Gabriel is a Reuters market analyst. The views expressed are his own)