Flat Movie Attendance=Regal Entertainment Toast?

Box office receipts grew 4% in 2007, driven by big three-quels to successful franchises like "Spider-Man 3," "Shrek the Third" and "The Bourne Ultimatim" as well as small-budget hits like Sony's "Superbad." That seems like good news for the theater chains, except when you consider that attendance was actually flat in '07, meaning box office gains were achieved through increased ticket prices. Moviegoers bought 1.42 billion tickets, flat with 2006 and down from the decade high-water mark of 1.61 billion tickets in 2002. Average ticket prices grew 4% to $6.82, according to an estimate of the first three quarters by the National Association of Theater Owners.

Also worrying for exhibitors: Spider-Man, Shrek and Bourne, nearly exhausted franchises, were replaced with only one sure-fire new one with three-quel potential, Paramount's "Transformers."

Investors seem concerned: shares in Regal Entertainment (RGC) hit a 52-week low Thursday morning, dropping 3% to $17.56 before recovering slightly. The stock is off 24% from its previous high of $23.14 in June.

In addition to the exhibitors, this is obviously a problem for Hollywood, which is watching its main cash-cow--DVD sales--dwindle. DVD sales were down again in 2007, and as noted here before, the hoped-for replacement-cycle driven by HD DVD and BluRay disks hasn't materialized.