As a lifelong cinephile and someone who has witnessed the evolution of the film industry over several decades, I find the current state of the box office both intriguing and challenging. The rise and fall of superhero franchises, the importance of social media buzz, and the emergence of new genres are all factors that have reshaped the landscape of cinema today.
Mark O’Meara, a Virginia-based movie theater owner, wonders and worries constantly about what exactly his customers will buy tickets to see on any given weekend. It’s not that people have fallen out of love with the big screen, he says, they’ve just gotten out of practice. In fact, in the 30-plus years O’Meara has worked in the business, he’s had a front-row seat as the audiences who habitually went to the movies turned to streaming services instead.
At the grocery store, people often tell O’Meara, who manages two venues in Fairfax County, ‘There’s nothing here we’re interested in.’ On certain weekends, he understands this response. ‘They’re choosing comfort over coming out,’ he acknowledges. The issue isn’t that people don’t consume content; they certainly do. What we’re up against is the ease of staying home. Great films sell regardless of circumstances. However, we need more of them to thrive.
This year’s worldwide revenue projections suggest a drop of over 10% compared to 2023, which was approximately 20% lower than pre-pandemic levels. Domestic ticket sales, a more accurate reflection of the movie theater industry’s impact on society, are projected to reach around 800 million. Prior to COVID-19 affecting the film industry, cinemas typically saw about 1.3 billion ticket sales annually.
Eric Handler, managing director at Roth Capital Partners, notes that a significant portion of the increased box office earnings can be attributed to higher ticket costs. He suggests that movie theaters should focus more on marketing and enhancing the cinematic experience to encourage audience return.
For several years now, the film industry has faced one challenge after another. Initially, COVID forced cinemas to close for extended periods, leading to a flurry of release date postponements and production halts on significant films. When filming resumed, it came with expensive new health protocols that significantly boosted budgets. Then, in 2023, there were unprecedented writers’ and actors’ strikes that halted productions yet again, causing another multi-month work pause as new movies had their premiere dates pushed back. This situation has left movie theaters with limited options for screenings, a factor some experts attribute to the decrease in year-on-year earnings.
According to Eric Wold, an analyst from B. Riley Securities, we’re currently in a phase where we’re regaining strength after the pandemic. It’s taking some time for people to go back to cinemas and for the film industry to offer a wide variety of movies.
It turns out that sequels and action-packed movies were the big hits at the box office in 2024. Family-oriented films saw a significant resurgence as well. Interestingly, nine out of the top ten highest-grossing worldwide releases were franchise installments (“Inside Out 2”, “Deadpool & Wolverine”, “Despicable Me 4”, “Moana 2” and “Dune: Part II” being some examples), with “Wicked”, the only original movie among the top earners, being an adaptation of a beloved Broadway musical that heavily references “The Wizard of Oz”. This was quite different from the previous year, where the top three movies (“Barbie”, “The Super Mario Bros. Movie” and “Oppenheimer”) didn’t have any numbers in their titles.
Jeff Bock, an analyst from Exhibitor Relations, remarks that it appears as if all the movies coming from Hollywood are either sequels, prequels, or reboots,” says he. “However, is it fair to criticize the studios for this? After all, it’s what the audience seems to be demanding.
When film studios attempted to debut new intellectual properties or produce films similar to “The Fall Guy” (a modern revival of an ’80s series), they often failed. For instance, consider “If,” a $110 million fantasy comedy from Paramount and John Krasinski, which only managed $190 million at the global box office. Similarly, Apple’s “Fly Me to the Moon,” starring Channing Tatum and Scarlett Johansson, a romantic comedy, earned just $42.2 million worldwide — significantly less than its $100 million budget.
Tony Chambers, Disney‘s vice president of global theatrical distribution, notes that while viewers express a preference for unique movie titles, they are still favoring and choosing familiar ones instead.
Despite some follow-up movies underperforming in the past, several recent ones, such as “Inside Out 2”, “Deadpool & Wolverine”, and soon “Moana 2”, have managed to earn sums comparable to pre-pandemic blockbusters. In fact, Disney, who had a poor year in 2023, saw a significant recovery. “Inside Out 2” and “Deadpool & Wolverine” both grossed over $1 billion, with “Moana 2” expected to come close or even surpass that amount. This means that Disney will have produced three of the top five highest-grossing films of the year for the first time since the COVID era ended, a feat they haven’t achieved before in this period.
Currently, films like “Despicable Me 4” from Universal and Illumination, and “Dune: Part Two” from Warner Bros. and Legendary, have almost reached and surpassed their predecessors in terms of box office earnings. Specifically, “Despicable Me 4” has earned approximately $969 million, while “Dune: Part Two” has garnered around $714 million. These films have also accounted for a larger share of the overall box office revenue. In 2024, the top five movies represented 32% of the marketplace’s total earnings. Contrast this with 2014, where the year’s top five releases only accounted for 15% of the total revenues.
On the flip side, some major films that didn’t resonate with audiences turned out to be significant financial setbacks. Among this year’s biggest box office bombs are “Joker: Folie à Deux,” which grossed $206 million globally against a production budget of $200 million, “Horizon: An American Saga — Part One,” directed by Kevin Costner, which raked in just $38 million despite its $100 million budget, and Lionsgate’s adaptation of the video game “Borderlands,” which had a production cost of $110 million but only managed to earn $32.9 million.
Jeff Goldstein, president of domestic distribution at Warner Bros., expresses concern over the market’s development, which has created a wide disparity between the wealthy and the less fortunate. He notes that successes in this environment are more significant than ever, while failures are also more substantial.
Goldstein points out that another crucial aspect lacking in today’s film industry is the steady stream of moderately successful individual and pair productions. As he regretsfully notes, “In the past, the middle class formed a significant majority of moviegoers. Unfortunately, that segment has significantly decreased.
Cinema business has experienced more than just disruptions due to strikes and pandemics; it’s also grappling with significant changes in Hollywood. For instance, corporate mergers have resulted in fewer independent studios (such as Disney acquiring Fox) producing movies, and strategic shifts (like Warner Bros.’ sale from AT&T to Discovery) that have shaken up the established order. There’s a hopeful outlook that Skydance’s potential purchase of Paramount Global might preserve one more film studio, although a sale to a rival like Sony could lead to cost-cutting measures and fewer films for cinemas. However, it’s also understood that this phase of consolidation in the entertainment industry isn’t likely to end soon, as studios seek new ways to earn profits amidst the rise of streaming and evolving consumer trends, which have narrowed profit margins.
Michael O’Leary, CEO of the National Association of Theatre Owners, a movie exhibition trade group, expresses concern about ongoing industry changes and hopes that upcoming mergers won’t reduce the number of films we can exhibit. He emphasizes the importance of having engaging movies to screen throughout every month of the year.
He’s encouraging studios to boost their output and compete with one another by releasing more movies simultaneously. The theater industry was invigorated by Universal, Paramount, and Disney’s decision to swiftly release “Wicked”, “Gladiator II”, and “Moana 2”, as the influx of fresh content boosted total earnings rather than competing for ticket sales. Additionally, this move sparked a flurry of favorable media attention that added an element of trendiness to a sector frequently portrayed as struggling financially.
According to O’Leary, competition is beneficial as it boosts interest at the box office and generates enthusiasm. He believes that the industry is capable of managing multiple wide releases on weekends.
Quality control may be an important ingredient in the expansion of certain franchises, but impressing tastemakers isn’t always a recipe for success. Box office observers note that it’s no longer enough for a film to be good or even great to pack theaters. After all, “The Fall Guy” and “Furiosa” were well reviewed and still failed to pack a punch. Now, a movie needs to permeate the zeitgeist and have audiences feeling FOMO if they don’t go to the multiplex to see it. That’s partly how “Wicked” bucked the odds and became the rare Broadway adaptation to connect with moviegoers, many of whom wore pink and green, the signature colors of the film’s witchy protagonists, to the cinema.
Peter Cramer, president of Universal Pictures, emphasizes that creating a sense of urgency is essential for films to succeed at the box office. He regrets to say that leisurely moviegoing isn’t as robust as it should be. What we really need is to motivate people to leave their homes and go to the cinema.
Being part of a franchise doesn’t automatically ensure a blockbuster opening weekend, as shown by “Dune: Part II”. This sequel surpassed its predecessor’s box office success due to favorable reviews praising it for being more complex and emotionally engaging than the original. On the other hand, films like “Inside Out 2” and “Deadpool & Wolverine” also garnered positive feedback. However, “Joker: Folie à Deux” suffered from harsh critiques that found the movie lacking a compelling reason for its existence.
According to Blair Rich, the marketing and commercial chief at Legendary Entertainment, people can tell when a sequel is simply made for profit. It’s crucial that these follow-ups are deserved and executed with exceptional quality. Rich hopes that the mindset of producing one-size-fits-all content is diminishing, and instead, originality, even in sequels, will regain prominence.
In the past, there have been fewer event-driven blockbusters based on superhero stories compared to previous periods. Before the pandemic, comic book adaptations were virtually invincible at the box office, but lately, they’ve been receiving earnings that are more grounded or even disappointing. For instance, “Deadpool & Wolverine,” a venture by Disney and Marvel into R-rated content, was a resounding success, while Sony’s spin-offs from the Marvel universe such as “Madame Web,” “Kraven the Hunter” and “Venom: The Last Dance” have either flopped or performed poorly compared to their earlier versions. However, there is a possibility that this trend may change next year with several upcoming Marvel sequels like “Captain America: Brave New World,” “Thunderbolts” and “The Fantastic Four: First Steps,” as well as James Gunn’s reboot of “Superman” for DC Comics. If these films do not manage to re-engage comic book fans, it could indicate that tastes are shifting in significant ways.
Currently, theater owners aren’t disheartened by the drop in box office success for heroic films. Instead, they believe that the market is shifting to accommodate more opportunities for various genres to thrive. It wasn’t too long before that movies with relatable human characters, who eschewed capes and spandex, were able to draw large audiences.
According to Chris Randleman, the chief revenue officer at Flix Brewhouse theater chain, we’re not heavily reliant on superhero films anymore. We’re actually approaching the box office figures expected in 2023 by a few percentage points, and this was achieved despite one successful comic book movie and three that didn’t perform well. What’s more, we managed to do this without any ‘Star Wars’ or ‘Jurassic’ films. If someone had told you five years ago that this would be possible, they might have seemed delusional.
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2024-12-27 17:47