Last year was a historically bad one for the movie industry, according to a report from Despite individual blockbusters such as “Star Wars: The Last Jedi,” “Beauty and the Beast,” and “Wonder Woman,” sales at the box office fell to their lowest point in 25 years.

Naturally, this has caused the investment community to spurn equity shares of movie-theater operators. I can’t blame them. The financials for direct players within the movie industry are generally poor, and increasingly unstable free cash flow (FCF) trends worry those with a conservative outlook.

Furthermore, mainstream expectations for growth at the box office has declined in line with the current situation. Not only is the movie industry impacted with the cord-cutting phenomenon as people eschew traditional media for streaming content, fewer people traffic major shopping malls that are home to the big cineplex operators.

But the worst part is of course market performance. Just a brief look at the technical charts for publicly-traded cinema companies is enough to have you running for the exits. Even contrarians aren’t feeling the love as share prices have generally been volatile.

I’m not attempting to take away from the bearish aspect of the movie industry; clearly, the box office has suffered big losses and no easy solutions exist. That said, I don’t think this sector is as bad as you might think it is.

I’ve discussed this in prior works for Crush The Street: the movie industry is eschewing content diversity and focusing purely on what resonates with the audience. That’s why I think the Disney deal to buy out Fox’s entertainment assets was huge. Films that are wildly profitable are almost invariably franchise titles that revolve around famous comic books or science-fiction fare.

Moving forward, Hollywood producers will simply churn out the hits, and few, if any of the misses. Yes, that stinks for film aficionados, but it’s music to the ears for investors.

Another important factor to note is demographics. According to a Variety article, whites are the least likely to watch movies at the box office relative to their population. Those who are high-capita moviegoers are Hispanics, followed almost neck-to-neck with Asians.

The latter demographic is an interesting case because currently, most of the world’s population is Asian. Furthermore, Hollywood desperately needs China’s box office sales to remain both profitable and relevant.

But at a certain point, China isn’t going to be content playing second fiddle to the white man, so to speak. They have the numbers and the robust sales figures as leverage, so why not use it? Over time, Hollywood producers must incorporate better, more meaningful roles for Asian actors.

We’re already seeing that trend play out, and it’s only going to increase in later years.

In many ways, the movie industry is a demographic play. Western societies are on the decline, and competing demographics are jockeying for control. But with China’s massive population size, along with a surging Asian economy in general, it’s unlikely that any other demographic stands a chance, to put it bluntly.

While it doesn’t look like it right now, eventually, movie stocks could turn out to be no-brainer investments.