Hollywood may be enjoying a stronger summer at the box office, but the numbers do not tell the whole story. Ticket sales have improved from the pandemic era, yet movie studios, streaming companies, and theater chains are still struggling to match the profitability they had before 2020.
At the same time, viewers are spending more of their screen time on online video.
U.S. and Canadian theaters generated about $4.4 billion in ticket sales from May through August 23, according to Rentrak. That figure is roughly 6% higher than the same period in 2019. If the current pace continues, annual ticket revenue could pass $10 billion for the first time since COVID-19 forced theaters to close.
However, ticket revenue does not equal strong attendance. Just five movies accounted for about half of the summer’s box-office earnings. Through the first 30 weeks of 2026, the number of tickets sold was about one-third lower than it was seven years ago.
Higher ticket prices have helped theaters produce more revenue despite fewer admissions. That difference points to a larger concern: audiences are watching, but they are not necessarily choosing traditional movie theaters as often as they once did.
Profits Remain Under Pressure
The financial picture is less encouraging. Visible Alpha forecasts that median operating profit margins for nine major U.S.-listed studios, streaming companies, and cinema chains will be more than two percentage points below 2019 levels in 2026.
The gap becomes even wider when Netflix is removed from the group. Only IMAX and Netflix have delivered meaningful gains for investors tied to the movie business.
California is also watching the industry’s consolidation closely. Attorney General Rob Bonta canceled a Monday meeting with Paramount Skydance (PSKY.O) while his office continues its lawsuit seeking to block the company’s proposed acquisition of Warner Bros Discovery (WBD.O).
The dispute includes concerns about California’s film industry and the future independence of Warner Bros. California had been expected to push for Paramount to keep the Warner Bros. studio independent as part of a possible settlement.
Viewers Are Moving Online
The biggest challenge may not be consolidation at all. It is where audiences spend their time.
YouTube, owned by Alphabet (GOOGL.O), accounted for about 14% of U.S. streaming and television usage in June, according to Nielsen. Its share has nearly doubled in three years. Even major movies such as “Backrooms” and “Obsession” have connections to videos originally uploaded to YouTube.
Studios are also looking to artificial intelligence as a possible way to reduce production costs. Yet the same technology is available to competitors and independent creators. As more videos enter the market, attracting and keeping viewers becomes harder.
McKinsey estimates that another 5% shift in TV and movie viewing toward open-video services could remove about $13 billion in distribution sales.
The summer box office shows continued interest in movies, but Hollywood faces financial pressure from lower attendance, shrinking margins, and growing competition from online video. Higher ticket prices have helped support revenue, yet they have not solved the industry’s broader challenges.
Studios now need to adapt to changing viewing habits while finding sustainable ways to produce and distribute content profitably.
