Mark O’Meara, a Virginia-based movie theater owner, is always wondering and worrying about what his customers are buying tickets to see on any given weekend. He says it’s not that people have lost interest in the big screen, it’s just that they’ve fallen out of habit. In fact, O’Meara has worked in the industry for more than 30 years and has had a front-row seat as habitual movie-going audiences turned to streaming services instead.
“When I meet people at the grocery store, they say, ‘You don’t have anything we want to see.’ I don’t blame any particular weekend,” said the company, which operates two venues in Fairfax County. O’Meara says. “No one denies that we’re consuming content. It’s never been an issue. We’re competing on couch convenience. Good movies sell no matter what’s going on. But I We need more of them.”
Total revenue this year is expected to reach $30.5 billion worldwide, down more than 10% compared to 2023 and nearly 20% from pre-pandemic levels. Domestic attendance, an even better indicator of how the movie theater industry influences culture as a whole, is expected to reach about 800 million. By contrast, before the coronavirus upended the movie business, movie theaters averaged about 1.3 billion people a year.
“Much of the increase in box office revenue is due to higher ticket prices,” said Eric Handler, managing director at Roth Capital Partners. “Movie theaters need to do a better job of promoting the movie experience and keeping people coming back.”
In recent years, the movie business has experienced one setback after another. First, the coronavirus has shuttered theaters for months, postponed release dates, and halted filming for major films, but now we’ve put in place expensive new health measures that have added millions of dollars to budgets. It was finally reopened. Then, in 2023, the historic writers and actors strike caused another month-long work stoppage as production was once again halted and weekend releases of new films postponed. All of this has resulted in fewer movies being shown in theaters, which analysts believe is part of the reason for the year-over-year decline in revenue.
“We’re still in post-pandemic recovery mode,” said Eric Wald, an analyst at B. Riley Securities. “It’s going to take time to get people back into theaters and get productions that have breadth and diversity.”
So what went well? Sequels and special effects-heavy adventures dominated the box office in 2024, with family films finally making a big comeback. Nine of the 10 highest-grossing films in the world were franchises (Inside Head 2, Deadpool & Wolverine, Despicable Me 4, Moana 2, Moana 2, Dune: Part II was among them). ” is the only original film among the highest-grossing films and is based on the hugely popular Broadway musical from 20 years ago, which draws heavily on “The Wizard of Wizards.” . The lore of “Oz.” This was in stark contrast to the previous year, when the top three titles – “Barbie,” “Super Mario Bros. Movie” and “Oppenheimer” – appeared without Roman numerals in their titles.
“It seems like everything Hollywood is offering is a sequel, prequel or reboot,” said Jeff Bock, an analyst at Exhibitor Relations. “But can you blame the studio? That’s what audiences are enjoying.”
When a studio tries to launch an original production, or at least a movie that isn’t part of a storied film franchise like “The Fall Guy” (a reboot of a long-forgotten ’80s show) Most of my attempts to create one ended in failure. Paramount and John Krasinski’s $110 million fantasy comedy “If” underperformed at the box office with $190 million worldwide, while Apple’s “Fly Me to the Moon” “Meet Cute,” starring Channing Tatum and Scarlett Johansson, was a huge hit. It made $42.2 million worldwide, less than half of its $100 million budget. The rise of streaming services like Netflix and the demise of home entertainment products like DVD have disrupted the economics of film production, but here’s some important context. Because box office companies keep about 50% of ticket sales, movies have to double their production budgets and marketing costs. Money theatrically. Just because these films are accepted, studios aren’t willing to take risks on untested properties.
“Audiences say they want originals, but they’re doubling down on safer options with titles they know,” said Tony Chambers, Disney’s executive vice president of global theatrical distribution.
However, many of the subsequent films have had box office receipts comparable to pre-pandemic blockbusters. After a disastrous 2023, Disney has made a huge comeback with Inside Head 2 and Deadpool & Wolverine easily exceeding $1 billion, and Moana 2 could approach or exceed that benchmark. It’s going to happen. Overall, Disney will produce three of the five highest-grossing films of the year, a first in the post-COVID-19 era.
Meanwhile, Universal and Illumination’s Despicable Me 4 is pretty close to the billion-dollar club with $969 million in box office revenue, and Warner Bros. and Legendary’s Dune: Part 2 is set to hit the $1 billion club in 2021. It significantly outperformed its predecessor, Dune: Part 1. Sales were $714 million. These films also accounted for a larger portion of the overall box office revenue. At this point in 2024, the five biggest films will hold 32% of the market. Ten years ago, in 2014, the top five releases of the year accounted for 15% of total revenue.
In contrast, blockbusters that failed to connect with moviegoers were unmitigated disasters. The biggest failure of the year was “Joker: Folie à Deux,” which grossed $206 million worldwide on a budget of $200 million, and grossed $38 million despite a production budget of $100 million. Kevin Costner’s Horizon: An American Saga Part 1, which made $1,000, and Lionsgate’s video games. The Borderlands movie cost $110 million to make and grossed just $32.9 million at the box office.
“It’s sobering to see that the market has evolved in a way where there’s a huge divide between the haves and the have-nots,” said Jeff Goldstein, Warner Bros.’ president of domestic distribution. What has failed is bigger than before. ”
Also missing, Goldstein said, are the moderately successful singles and doubles that once supported the industry. “In the past, the middle class could be a big part of movies,” he laments. “That thing has shrunk.”
It’s not just strikes and the pandemic that are disrupting the movie business. The industry has also had to deal with changes occurring across Hollywood. Namely, corporate mergers have resulted in fewer independent studios producing films (see Disney’s acquisition of Fox) and major changes in strategy (see Warner Bros., for example). (first AT&T, then the chaotic sale to Discovery) destroyed the old order. There’s some cautious optimism that Skydance’s pending acquisition of Paramount Global will keep at least one more movie studio alive, but if sold to a direct competitor like Sony, it won’t be shown in theaters. This is because the number of films to be screened was reduced, and there was a possibility that the number of films to be screened would be even fewer. But there’s also a recognition that the era of consolidation in the entertainment industry is far from over, as studios struggle to find ways to turn a profit as profit margins shrink due to streaming and changing consumer habits.
“The industry is going through a process of consolidation, and we can only hope that these mergers do not impact the number of films that can be screened,” said Michael O’Leary, CEO of the Motion Picture Association of America. Theater Owners is an exhibition industry association. “We need compelling films that can be shown throughout the 12 months of the year.”
He urges studios to increase the amount of work they publish and consider sharing more work with each other. The theater industry was excited by Universal, Paramount and Disney’s decision to release “Wicked,” “Gladiator II” and “Moana 2” in quick succession, with an influx of exciting new films that could boost overall ticket sales instead of cannibalizing ticket sales. He pointed out that the company had increased its revenue. It also inspired a wave of positive media coverage that applied a false cool to a business that was often portrayed as being in dire straits.
“Competition is good for everyone,” O’Leary argues. “It brings more attention and excitement to the box office. We can handle multiple wide releases over the weekend.”
While quality control may be an important factor in the expansion of a particular franchise, impressing tastemakers is not necessarily the secret to success. Box office observers have noted that it’s no longer enough for a movie to be good or even good enough to fill theaters. After all, “The Fall Guy” and “Furiosa” were well reviewed, but still failed to pack a punch. Now, movies need to penetrate the zeitgeist and make audiences feel FOMO if they don’t go to multiplexes. In part, Wicked was a rare Broadway adaptation that defied the odds, with many moviegoers arriving at the theater wearing pink and green, the signature colors of the film’s witch-like protagonist. It became a work.
“Everyone is very aware of the fact that in order to make a movie a box office success, you need to create a sense of urgency,” said Peter Kramer, president of Universal Pictures. “I’d like to say it’s strong enough to require casual moviegoing, but it’s not. We have to get people out of their homes.”
Being part of a franchise isn’t enough to guarantee a monster opening weekend. Dune: Part II, for example, outperformed its predecessor at the box office, in part because critics praised it as being deeper and more emotional than its predecessor. Sequels such as “Inside Head 2” and “Deadpool & Wolverine” also received positive reviews. In contrast, Joker: Folie à Deux was hampered by a scathing notice chastising the film for not remembering well enough why it existed.
“Just because a studio needed to make a sequel, audiences can tell if there’s going to be a sequel. It has to be acquired and executed at the highest possible quality.” says Blair Rich, chief marketing and commercial officer at Legendary, producer of “Dune” and “Godzilla x Kong: New Empire,” another top 10 release. “My hope is that this one-size-fits-all mentality will start to fade and there will be a renewed emphasis on originality, even in sequels.”
After a long time, there are fewer and fewer event-driven, superhero-type tent poles. In pre-pandemic times, comic book adaptations were treated to a Teflon coat at the box office, but these days they’re being greeted with sub-par or even better box office returns. Deadpool & Wolverine, Disney and Marvel’s foray into R-rated territory, was a big hit, but Sony’s Marvel films Madame Web, Kraven the Hunter, and Venom: The Last Dance ” was either a complete bomb or something. Exercises with decreasing returns compared to previous installments. Next year could see a reversal of this trend, with three Marvel sequels: Captain America: Brave New World, Thunderbolts, and Fantastic Four: First Steps, as well as James Gunn’s The release of the “Superman” reboot could add fuel to the fire. A new chapter for DC Comics. But if these movies fail to win back fanboys and fangirls, it could be a sign that tastes are fundamentally changing.
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So far, theater owners are not discouraged by the drop in box office certainty for heroics. They feel the market is evolving and there is more room for other genres to succeed. It wasn’t that long ago that movies featuring distinctly human protagonists, eschewing capes and spandex, attracted large audiences.
“We’re not as dependent on superhero movies,” said Chris Randleman, chief revenue officer of the Flix Brewhouse theater chain. “The 2023 box office is coming within a few percentage points, and that includes one successful comic book movie and three blockbuster comic book movies. ‘Star Wars’ and ‘Jurassic’ movies. If you told people that five years ago, they would think you were crazy.”
