Chaos Does Not Reign at $3.3 Billion – Deadline

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Yes, exhibitors, it’s cold out there.

Despite a 91% rebound in the annual summer domestic box office, from $1.755 billion in 2021 to $3.35 billion by Comscore (i.e. through August 30), and a 90% explosion in admissions for the May-Labour Day period by EntTelligence, from 153 million to 291M during the same period, some feel the need to cast shade and question the overall health of the theater industry.

And coming out of this summer’s weekend low of $53.3 million as the industry braces for a month-and-a-half dry spell without tent poles only creates more sweat.

Getty

Easy blame is the lack of wide-release inventory — which, at an estimated 102 titles this year, is down from 2019’s pre-pandemic 143 titles for pictures booked during their first weekend in more than 1,000 pitches. There are 84 wide releases currently slated for 2023 on Comscore, but more easily could be added or even subtracted.

A movie chain boss recently shouted at us about Shazam: Fury of the Gods leaving the Christmas period for March 17 next year (as Warners seeks to get more juice from Imax screens): “A move like this has a top-down effect. How can I explain to an employee of one of my theaters that he has no hours during this holiday week because there is less traffic? That’s a loss of $3 million for my channel. Having a potential $200 million movie that’s no longer available on the market means 25% less activity on that title for AMC, 17% less for Cinemark.

cineworld

cineworld

Pile on the noise that small theater owners are running out of their Covid bailout money, as well as the news that Cineworld is facing Chapter 11 bankruptcy for its Regal operations in the United States amid $5 billion in debt, and it looks like a blackout is in store for movie theaters coast to coast.

However, this is not a nuclear annihilation of the exhibit.

Rather right the wrongs of this sector, which suffered from a year-long shutdown that ended 17 months ago. The harsh reality is that this is simply Adam Smith’s invisible hand economy, a fittest survival for cinemas. There are about 5,400 theaters in North America, of which about 9% could fall, distribution sources tell us. In any given weekend, there is a certain percentage of theaters that make all the money. In other words, even by pre-pandemic standards, there was never a need to book a movie north of 4,000 locations. Such distribution maneuvers are there to stir up the ego of the filmmakers so that they are told that their film is going everywhere. Additionally, the exhibition went through a bankruptcy cycle between 1999 and 2001 (read more here).

While some exhibitors may complain about the lofty studio rental terms, they can’t complain that Hollywood hasn’t offered a robust summer season. It would be like blaming Unilever and Procter & Gamble for Target’s problems. Many of the exhibition’s dilemmas were pre-pandemic, ie Cineworld bought Regal for too high a price at $3.6 billion; Chapters 11 should have been filed during the pandemic for many rather than laying bare their hands on a Covid shutdown.

purple hearts

Nicholas Galitzine and Sofia Carson in “Purple Hearts”
Mark Fellman/Netflix

For here is the analysis that cannot be avoided; here’s the root of the root and the bud of the bud and the sky of the sky in an industry that’s invigorated by life: this summer’s box office (in addition to Sony’s $1.9 billion holiday hit Spider-Man: No Coming Home) has shown several entertainment executives that the film industry has unlimited financial upsides and limited downsides.

Streaming can’t compete with the huge advantage cinema brings in its downstream revenue. Although Disney+ streaming packages rally at 221.1 million subscribers ahead of Netflix’s 220.67 million, as the latter has demonstrated, they’re human: Undershoots and caps are the way to go. the future as we choose not to stay at home, and more and more Wall Street will start evaluating OTT on the merits of revenue growth over subs, sources tell me. When it comes to grabbing the eyeballs of all these OTT services for any piece of content, “it’s all mash in the wash,” a marketing and distribution vet said of the glut of streaming content versus curation and the global marketing mouthpiece of a slate theatrical release. A reckoning might be in store for all those direct-to-stream movies that cost between $100-200M+, which means streamers will find they should just make them cheaper. Netflix’s Low-Cost Romantic Musical (We Hear) purple hearts made his way onto the streamer’s all-time list at 228.6 million hours watched, not far behind the Russo Brothers The gray man at 253.8M. Calculate this one, accounting department.

Jurassic World Dominion

Left to right: Zia Rodriguez (Daniella Pineda) and Franklin Webb (Justice Smith) in Jurassic World Dominion’
Universal

Read more about the benefits of summer: “So few pictures have lost money,” exclaims a film funding source to Deadline. “There have been very few failures in a business that has a higher risk profile.” Among these cries in the dark are those of Paramount/Skydance Top Gun: Maverick ($1.4 billion worldwide box office), Universal’s Jurassic World: Dominion (which goes towards one billion WW), Disney/Marvel’s Doctor Strange in the Multiverse of Madness ($955M world worldwide), Minions: The Rise of Gru (heading towards $900 million WW), Thor: Love and Thunder ($747.7 million), even the $16 million horror movie Uni/Blumhouse The black phone ($157.2 million), while pictures like Warner Bros.’ Elvis overperformed, bringing back adults (who Top Gun 2 also done) with $277.4 million, and Sony’s starless $24 million YA title, Where the Crawdads sing, Now to $108 million WW.

The epiphany among financiers and increasingly major studio executives (read David Zaslav, CEO of Warner Bros. Discovery) is that nothing beats the money of a theatrical window and its downstream tricks.

But what about the declining supply of films?

“Our business operates in two-year cycles,” said one studio executive, “Everything you see at the box office, the studio got pregnant with it two years ago. What was happening then? The pandemic .

Sure, some of the hits we’ve had this summer were made before the pandemic, but there are other films that were given the green light in a world where there were a lot of movie doubts (the lackluster The beast), and lots of streaming bets. Add in production delays due to Covid, then post-production supply chain issues due to oversupply, and we have a drier Q3 and Q4.

Nope

Universal

If there was another big movie to put on Thanksgiving or to fill the void left by Shazam: Fury of the Gods, a studio would date it. We’re hearing that more adult titles could be lined up coming out of the fall festivals. Proof that this post-production backup is real, and not some kind of corporate spin: We heard this when it came to Universal’s sci-fi thriller Nope, the film was rushed towards its July 22 release date, receiving its first test screening just 12 weeks before release (a short track). The visual effects needed more work, with the reshoots being finished and dirty just before release. The film earned $118.3 million domestically, just under $150 million WW. Could the photo have done better with another four or five months of publication? This just gives you an idea of ​​the timeline these tent poles are facing.

There’s nothing wrong with drama. As always, it’s about movies.

Said a studio distribution boss about the company at the moment: “Are we healthy? No. Are we dead? No. We have a cold.

*****

Doctor Strange in the Multiverse of Madness

disney

For those who want to know the market share ranking of the summer at the box office, here is an overview of the period from May 6 to August. 30 against 2019: Universal/Tuning Features, $1.1 billion (+105% compared to 2019); Disney/20th, $878.6 million (-63%); Primordial, $753.2M (+298%); Warner Bros., $236.4 million (-42%); and Sony, $174 million (-75%). Other mentions include A24 with $52.5M, Crunchyroll with $32.6 million, Fathom Events with $15.68 million and Liongate $11.4 million (-96%). All figures from Comscore.

We’ll update after Labor Day weekend, so calm down, studios. Overall, the $3.35 billion summer box office is currently down 21% from summer 2019, which grossed $4.25 billion through August 30.

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