THB #127: After The CinemaCon, Into The $2.9B Summer (I Hope)

So what did we learn from CinemaCon this year?

Turns out, not a lot... aside from media having magical thinking, writing like everything that happened was happening for the first time.

Writers who have been on the “cinema is dead” train can’t write that anymore because they were so wrong then and are more quietly so wrong now, write up enthusiasm for theatrical as an ongoing delusion. Or like theatrical is being resurrected like Frankenstein because streaming - which they were falling over themselves to hype as the ONLY content platform needed for the future - took a beating on Wall Street.

But - sorry for repeating myself - NOTHING ACTUALLY CHANGED... except for Wall Street reconsidering obviously mistaken fantasies of the last 5 years.

COVID happened. It was brutal. For many industries.

As it turned out, COVID happened at the same time the film and television industry was making this very expensive and complex shift to Streaming for television and people who never oversaw a windowed content economy were given the most powerful jobs and were obsessed with change over profitability. As someone said it to me the other say, “Spending more seemed to be a way to raise your stock price because spending more somehow promised more profits.”

Of course, anyone who remembered their elementary school math classes knew otherwise instinctively. But that is the magic of the man behind the curtain.

What happened to Netflix 10 days ago? The happy lie of Streaming was exposed to the many people who desperately wanted to believe the happy lie. (The only responsibility Netflix has in this is not disabusing people of the happy lie and sometimes drinking its own Kool-Aid, which is really hard not to do.)

And back at the Exhibition ranch, only idiots who are really rooting against theatrical because they were anti-theatrical for so long are throwing around stats like comparing 2019 grosses to 2022 without serious context.

Quarter 1 of 2019 in-year released grossed $1.98 billion in the quarter. This year, Q1 in-house releases grossed $1.05 billion in the quarter. But in 2019, there were 185 Q1 releases and this year, 86. In terms of wide release, 30 in-quarter in 2019 and this year, 23.

There may be some drag from COVID. But it’s a lot less of a drag than the lack of films. And one of the saving graces of it all, financially, is that Paramount+ and Peacock are not at fighting strength yet.

Anyway… here are the 2022 Summer’s 19 wide releases.

That’s the entire wide release summer, folks! Does the cupboard look full to you?

So the “loaded” summer has just 4 titles that are going into theatrical without the direct threat of a short window, meaning “you can see it within 6 weeks & 3 days on your TV for less than the cost of a premium movie ticket or even for even less on a subscription service.”

Great way to market, everyone!!!

Much more effective than 2019, when 48 films were released wide during the summer with the assumption that every title might be on physical media and VOD in about 3 months. Right?

The domestic box office in Summer 2019 was $4.3 billion.

If this summer crawls to $3 billion domestic, it will be a frickin’ miracle. And it has nothing to do with consumer tastes or habits changing or anything else.

Four movies released in the summer of 2019 did over $200m domestic. We have six movies this summer with that kind of potential. Seems great, no?

But in 2019, those top 4 grossers produced $1.7 billion in revenue… while the wide releases that grossed less than $200 million produced $2.2 billion.

We may have the movies, even with windows shortened right up to the edge of consciously insane pressure against your theatrical revenues, to match or surpass that $1.7 billion from the biggest hits.

The other titles combined will struggle to generate more than $700m combined.

In 2019, there was another $400 million or so coming in from films still in theaters from April and earlier in the year. In the current modelling… maybe $200 million, if we are lucky.

$2.9 billion seems to be the cap on box office this summer… and it is 100% a choice by these distributors.

And honestly, anyone who thinks that Netflix is coming to the rescue is just fooling themselves in the most embarrassing way. If Netflix entered the theatrical box office, with no greater restraints than the current major distributors, they would be hard pressed to get to $1 billion in the theatrical marketplace in their first year. And that is really generous.

This is no slap at Netflix… just a realistic look at what they push out onto their services as “movies.” The highest quality award titles are not likely ever to be big box office… just like everyone else’s highest quality titles. And their audience-pleasing titles are just not super special. When they have their own Ted or even Free Guy, give me a call.

I am excited about the summer movie season. It will not be a super feast. There just aren’t enough titles. But I am actually thrilled about the prospects for at least 10 titles in these next 3 months and if half of them deliver, it will be a really fun movie summer.

And GOD… I would love to be too pessimistic.

But there are almost no rabbits to pull out of the collective hat. There aren’t Rocketman or Yesterday or Good Boys or even $132 million for a Tarantino film. I’m already including Bullet Train and Elvis and Black Phone as strong performers. If they underperform, it will be a DeppHeard.

Unlike most of the media, this is not a joke to me. The news of the week doesn’t send me swinging into fits of looking for the new hot position to take. I am not okay with false equivalences.

The only thing in the way of a full theatrical revenue comeback is the unwillingness of studios to cough up movies and to stop selling against them like they are disinterested in theatrical revenue. Sony and Warners have only 2 movies this summer and Paramount 3. Whatever words they used at CinemaCon mean nothing when compared to satisfying their consumers with a wide array of movie titles, some of which will fail… OMG.

Disney is only serious this summer because they have so much major IP loaded up. And Universal is bringing it, but are they? Jurassic World 2 was at $380m in 30 days after a $148m opening in 2018. That was the last time they had a movie gross as much as $200m domestic. This time, they will, it seems, be on VOD on the 31st day. We’ll see how it goes.

Universal is an ally that you keep an eye on while you smile and say, “thank you.” We are just seriously coming out of COVID and they took that time to train people to wait for post-theatrical with a very short window.

Sony is another great iffy ally. Great to have Spidey and Uncharted… then the 2022 chart of their movies drops to Father Stu and its $15m gross. Bullet Train… great… could be a big hit. Crawdads… stop wasting our time *even if the movie is great). Maybe The Woman King will surprise in the fall. But where are the movies?!?!?

The view of 2023 from CinemaCon looks better. Huzzah!

But for now, the exhibition business is trying to recover with one arm and one leg behind held behind their collective back. And until that changes, if you are comparing the past to this market, you are part of The Enemy. If you are a distributor and you want to kill theatrical, okay. That is a discussion. But they were all in Vegas, telling these exhibitors that they were on their side. And they should be. It is a profitable partnership. But they have no been friends to exhibition in the last couple years, even with all the limitations. They have not planned for this moment, when exhibition could make a full comeback, but have severely limited product.

Exhibitors are a tough bunch. So I have hope. But not for a great summer. Great moments. But as a whole… it’s not a whole.

Until tomorrow…

(Ed note: I have reached out to studios whose announced windows plans are discussed in some depth in this piece. They have not responded before publication. If there is anything that needs to be changed - don’t think there will be - I will send an edited version later today.)