Box office analyst lays out ‘the biggest narrative for 2023’
The box office is gearing up for a busy fourth quarter following a strong showing in Q3.
Current estimates see $2.1 billion in Q4 ticket sales, according to Box Office Pro, with a full-year haul of $7.5 billion. Increased momentum, coupled with upcoming blockbusters like “Black Panther: Wakanda Forever” and “Avatar: The Way of Water,” should help shoulder some of that demand.
Analysts highlighted that a lack of movie supply, triggered by COVID-19 production headwinds, is the biggest issue facing the industry today.
“Theaters need the quantity of movies and studios need the quality — that’s the biggest narrative for 2023,” Shawn Robbins, Box Office Pro chief analyst, told Yahoo Finance.
Robbins added that mid-level movies like “The Woman King,” “Bullet Train,” “Elvis,” and “Where the Crawdads Sing” also outperformed, debunking the notion that non-blockbusters no longer have a place at the box office.
“The summer was living proof of the fact that people are ready to go back to movies,” Robbins said.
Theater headwinds
A lack of box office supply has hammered theater chains over the past two-and-a-half years.
Bloomberg Intelligence’s Geetha Ranganathan told Yahoo Finance that only 50 movies have been released so far this year — almost 40% lower compared to the same point in 2019. The domestic box office has suffered as a result with year-to-date ticket sales down about 30% versus 2019, according to Comscore data.
Britain’s Cineworld Group (CINE.L), the parent company of Regal Cinemas, filed for bankruptcy earlier this month after struggling to climb back from pandemic lows. The Chapter 11 filing, obtained by Yahoo Finance, shows that the company will be allowed to continue operations and restructure its business in order to significantly reduce debt and strengthen its balance sheet.
Cineworld, which operates more than 9,000 screens across 10 countries, is the second-largest theater chain after AMC (AMC), but has run up a debt load of more than $5 billion after losses accelerated during the pandemic. Last month, the chain warned that a lack of big-budget movies will likely impact attendance through the fall, further affecting its ability to cut that debt.
The company also revised its short and medium-term cinema admission forecasts, noting that “slower-than-expected recovery being experienced in 2022 combined with external forecasts [indicates] a lower volume of theatrical releases in 2023 and 2024.” That would keep the box office below pre-pandemic levels until 2025.
However, that doesn’t mean the industry can’t improve in 2023.
“As long as we see that normalization of supply and studios are once again able to get back to their regular production schedule, the demand is going to be there,” Ranganathan said.
It took all of 2021 for most studios to come to that conclusion, with the movie industry deploying multiple experiments to combat the pandemic downturn primarily through hybrid streaming releases.
Since then, production studios have reverted back to theatrical-first strategies. The one change? A shortened, 45-day theatrical window.
“There is going to be some headwinds from that [shortened window] because it does shave off at least 8% to 10% of box office receipts,” Ranganathan explained, adding that there could be potential upside for studios that also have direct-to-streaming platforms.
Cineworld, which operates more than 9,000 screens across 10 countries, is the second-largest theater chain after AMC (AMC), but has run up a debt load of more than $5 billion after losses accelerated during the pandemic. Last month, the chain warned that a lack of big-budget movies will likely impact attendance through the fall, further affecting its ability to cut that debt.
The company also revised its short and medium-term cinema admission forecasts, noting that “slower-than-expected recovery being experienced in 2022 combined with external forecasts [indicates] a lower volume of theatrical releases in 2023 and 2024.” That would keep the box office below pre-pandemic levels until 2025.
However, that doesn’t mean the industry can’t improve in 2023.
“As long as we see that normalization of supply and studios are once again able to get back to their regular production schedule, the demand is going to be there,” Ranganathan said.
It took all of 2021 for most studios to come to that conclusion, with the movie industry deploying multiple experiments to combat the pandemic downturn primarily through hybrid streaming releases.
Since then, production studios have reverted back to theatrical-first strategies. The one change? A shortened, 45-day theatrical window.
“There is going to be some headwinds from that [shortened window] because it does shave off at least 8% to 10% of box office receipts,” Ranganathan explained, adding that there could be potential upside for studios that also have direct-to-streaming platforms.