THB #110: Overstuffed Streamers/Starving Theaters
I am a bit uncomfortable with the “Before/After” imagery above, but it represents a truth in that people assume that cut dude on the right is healthier… we don’t really know… but what would likely be healthiest for this guy is something much more moderate, a change from either side. People are drawn to the 6-pack & fire… but we can’t all be that person. It wouldn’t be a healthy world if we were. Same with content.
But I digress…
We are through the 1st Quarter of 2022… in terms of weekends, we just ended our 13th weekend.
The story of movie exhibition this quarter was almost 100% predictable.
What is remarkable is that it was the 6th best Q1 for movie grosses in history, in spite of there being less then 1/2 the number of new films released (85) than there were in the last 2 non-pandemic Q1s of 2019 (185) and 2018 (202).
I maintain - and the numbers back it up without much room for disagreement - that the #1 problem for movie exhibition right now (and moving forward) is the choice of distributors to starve theaters of content.
People who maintain that audiences are, by some mysterious shift in human nature, only interested in giant movies at movie theaters are, simply, wrong. These enormous profile, enormous budget films are dominant. Have been for years. No one is denying it. But they are only a part of the ecosystem that keeps brick-n-mortar movie theaters in business.
The only real way to kill movie theaters is for them to be drained of product. And that is what is now happening, driven by Disney - not only their own, but with what was Fox, which is now all but gone, except Searchlight. Then there is Warners’ Project Popcorn debacle is now over, thankfully, and Universal’s window-shortening obsession and Paramount heading down that Universal path for the lack of a mind of its own and even stalwart theatrical-releaser Sony, which sold off its theatrical rights to its own animation division to Netflix.
There are many levels of WRONG here. If there was a solid 45-day exclusive window policy, that would damage theatrical, as every effort to shorten the window for literally 33 years has done. But at least that would be addressable by exhibition. But within that 45-day window - too short for anyone who isn’t a pure financial literalist and doesn’t understand that there is a tipping point where your company is literally working against their own theatrical upside - some also want to sneak in digital rentals, premium and average, and DVD sales.
But the joke is… theatrical is still surprisingly solid in spite of all of that.
Meanwhile, all you hear about from consumers now is that they are overwhelmed by the absurd amount of content being shoved onto streamers right now… too much for any group of 10 people to actually consume, much less for any 1 person to manage in their heads.
But what is the dunderheaded response by distributors? Less theatrical and even more streaming content.
Meanwhile, event programming is growing. In the last month, there have been 6 presentations on under 810 screens grossing $1 million - $6.8 million in a weekend. This is a growing business… but more so a reminder that people are happy to go to movie theaters. If you aren’t… cool… not the point, anymore than me going to 3 or 4 movies a week.
If you look at the domestic box office charts for the Top 10 this weekend and compare it to the “same” weekends of 2019 and 2018, you will find this:
Average drop per movie, about the same
Average screen count, about the same
Per Screen Average, about the same (I removed Hotel Mumbai, which went from 4 screens to 924, which skewed the average, adding a 3529% increase to the otherwise 26% avg.)
The 2 stats that stick out dramatically?
Top Ten Weekend Gross: $115m in 2018, $128m in 2019, and $77m this weekend.
Weeks in Release for those Top 10 films: 2.8 weekends in 2018, 2.8 weekends in 2019, and 4.8 weekends this last weekend.
In 2018, there was just 1 Top Ten title in more than its 4th weekend, the 7th weekend of Black Panther. In 2019, 8 of the Top 10 were 4 weekends old or less, with Madea/Funeral in its 5th weekend and How To Train Your Dragon 3 in its 6th.
This weekend, Weekend 5 for The Batman, Weekend 7 for Uncharted, and Weekend 16 for Spider-Man: No Way Home.
To find a title that was over 10 weekends old and in the Top 10 in April, you have to go all the way to 2003… and even then, it was only because of an Oscar-related distribution plan. Chicago in 2003, A Beautiful Mind in 2002, Crouching Tiger, Hidden Dragon in 2001, American Beauty in 2000, Shakespeare in Love AND Life in Beautiful in 1999. You get the drift.
Titanic was the last one one to do it in a normal release cycle, 1997. So, not Avatar, not Rings, not Star Wars.
Power to Spidey, no question. But it did $1.4 million this weekend in the 7 spot, in 1998, Titanic dropped to #2 from #1 for the first time in that first weekend of April and still grossed $11.5 million.
If Spidey’s $1.4 million this last weekend was competing in 1998, that gross would place it at #13 for the weekend.
The #1 that weekend in 1998 was Lost in Space with $20.2 million.
Different movie world.
And I am sorry to be drowning you in numbers…
The simple and obvious point is… there are not enough movies being released for theatrical to do anything like what was considered normal before COVID.
And it’s not about big movies. The #1 grosser in “this” weekend in 2022, 2019, and 2018 ranges from $46m to $39m. That is not why the box office weekend is $40 million behind 2018 and $53 million behind 2019.
Just Disney’s decision to dump Turning Red to streaming… Encanto was hamstrung by a soft marketing effort and Disney+ promised for Christmas. The movie dropped 72% in its 5th weekend, as it went to D+. But even with that threat, it did $6.5 million in it’s 4th anf final theatrical-only weekend. If Turning Red did that same number, it would have been #4 for this weekend.
That alone would be an 8% bump to this weekend’s overall box office.
With all respect, the post-DVD Spider-Man doesn’t belong in the Top 10… nor does Dog… nor does the $3.6m Weekend 7 of Uncharted belong as the #4 grosser for the weekend. They should all be doing this kind of money at the box office after strong runs… that is normal. Nothing replacing them is not.
We are seeing, quite clearly, that the theatrical marketplace and its audience are there, ready for much the same success as it was having before the pandemic, at least domestically. Distributors are not doing their part.
You know those weeks when there seem to be nothing new on TV… just crap reruns? That is the new “model” for theatrical. Oversqueezed fruit because the crop is too short of new fruit. No one can survive this.
There have only been 16 new movies this year that opened on over 2000 screens (or built to that). In 2019, there were 26 in Q1.
People won’t go to dramas? Must be true, since NONE have been released at this level.
In 2019, The Upside did $109m, Five Feet Apart did $46m, plus Greta and Serenity.
People won’t go to comedies? Must be true, since only 1 has been released this year without going day and date… The Lost City… targeting middle-aged women who “don’t go to the movies”… $55 million and counting. The day-n-date was Marry Me, also for middle-aged women, opening to $8 million because it also opened on Peacock.
That’s it, folks.
In 2019, there were 5 comedies in Q1… Isn’t It Romantic, What Men Want, Fighting With My Family, A Madea Family Funeral, and The Kid Who Would Be King.
That 2019 group only generated $205 million domestic… but more than twice what this Q1 will produce… and only one film losing money. And each category adds up, even if every film doesn’t gross hundreds of millions.
And yes, on the one movie that lost money amongst those comedies, the studio would have lost less without marketing for theatrical. At the same time, it would mean nothing to the streaming catalog. And all of those modest hits… every one means more to a streaming catalog than they would as a direct-to-stream title.
The middle class isn’t sexy… except, it seems, when Netflix is throwing a dozen titles a week at you.
I see theaters closing in the fall, in significant numbers, if distributors don’t keep starving them. Even with 10 movies with legitimate potential of grossing north of $200 million domestic in the next 5 months.
Ten big hits in 20 weeks may sound like a winner to you… but not if you are paying for all the brick and mortar without the other 10 movies that will do over $75 million in that same period… and another 10 that will do $50m - $75m… and 20 more than will float somewhere beneath.
The ecosystem must maintain its pH balance for the life to survive and thrive.
The All Hits, All The Time ecosystem is, maybe, 10k screens in America and Canada. Maybe fewer. Because if you are relying on all big hits, a bad quarter becomes very dangerous. And Marvel making $600m worldwide instead of $800m worldwide becomes a serious problem. And if Avatar sequels aren’t Star Wars sequels and we don’t get Star War sequels until 2025 again… that is a crisis.
And remember… streaming will not be profitable for anyone - maybe Netflix, as they cut costs - until 2025 or later. And then, it will not be a giant wave of profits.