For a few fleeting weeks, it felt like movie theaters and the box office had turned a corner in its efforts to recover from the COVID pandemic that shut down most cinemas for over a year. Summer blockbusters were firing on all cylinders, families and horror buffs were on their way back, and it seemed like all that buzz would trickle down into the second half of 2022.
That second half dashed those hopes, turning 2022 into a roller coaster filled with hopeful highs and devastating slumps. While the biggest blockbusters continued to sell tickets in droves, question marks hang over the future of the box office at large and whether theaters will become the exclusive domain of big-budget franchises, leaving everything else to die on the vine.
“There is going to be a realigning of what we expect from the box office going forward,” said Comscore analyst Paul Dergarabedian. “With fewer screens and fewer successful non-franchise films, $9-$10 billion may be the new norm after the disruption of the pandemic, but we don’t know that yet.”
Some of the problems that made theatrical grosses so inconsistent this year are connected to the pandemic and will continue to resolve themselves in 2023. Others are larger, more existential questions that have no easy answers. For now, here are the lessons that studios and theaters will likely take to heart.
1. Blockbusters return
The brightest days for movie theaters came in June and early July, when a series of summer hits found success at various levels. Leading the way was “Top Gun: Maverick,” the biggest domestic hit in the history of Paramount Pictures, grossing nearly $1.5 billion worldwide and becoming the biggest Memorial Day weekend release in box office history.
Joining it was Universal’s “Jurassic World: Dominion,” also a $1 billion hit; “Minions: The Rise of Gru,” the highest grossing animated film since the pandemic began; and Marvel films “Thor: Love and Thunder” and “Doctor Strange in the Multiverse of Madness,” which combined for nearly $1.75 billion globally.
There were other successes on smaller budget levels. Blumhouse’s “The Black Phone” proved that there is still a substantial audience for original horror films, while Warner Bros.’ “Elvis” beat expectations with a $150 million domestic run, proving that older audiences who were slow to return to theaters in 2021 were ready to come back with the right film.
Between Memorial Day weekend and the second weekend of July, multiple $100 million-plus openings were hitting the box office, and the combined June and July domestic total topped $2 billion. It was just like old times…
2. Non-tentpole films struggled
After the release of “Thor: Love & Thunder” on July 8, the box office began a steady decline into a pit that it wasn’t able to even begin climbing out of until well into autumn. While HBO’s “House of the Dragon” and Amazon’s “Rings of Power” took over the pop culture conversation in late summer, monthly grosses in North America plunged below $500 million in August and didn’t rise above that mark until Disney/Marvel’s “Black Panther: Wakanda Forever” hit screens in November. Even then, the film couldn’t keep the fall box office from finishing $100 million lower than it did in 2021.
Through much of the year, the box office relied on those high-profile blockbusters, with overall weekend numbers sagging to as low as $35 million when there were either no tentpoles on the horizon or the films currently in theaters failed to deliver.
Some low-budget films did find success for their studios like Paramount’s “Jackass Forever” ($57.7 million domestic), Sony’s “Where the Crawdads Sing” ($90.2 million domestic) and Universal’s “The Black Phone” ($89 million), the latter of which was one of several successful original horror films this year. But there were not enough of these mid-tier successes to provide support for the box office in between the release of the biggest films, leading to greater inconsistency in moviegoer turnout throughout the year.
We now know the biggest of movies can sell tickets in droves as they did pre-pandemic, but the diverse, balanced film ecosystem that drove the box office to over $11 billion domestic and $40 billion worldwide in the late 2010s hasn’t yet returned, and there’s a chance it never will.
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3. Shorter theatrical windows have benefits, but also come with a price
If that balanced slate doesn’t come back, the culprit will vary depending on who you ask. One target of blame has been exhibitors’ long-resisted surrender of the 90-day theatrical window as an industry standard, shortening the amount of time between a film’s release in theaters and its release on digital on-demand and streaming.
The length of that window varies by studio and film, but its impact on exhibitors and the box office has been a source of friction. Publicly, CEOs of major chains have said that movie theaters can still benefit from shorter windows, as any theatrical release gives films a higher profile even if they reach home audiences sooner.
“If films are not working, that actually creates a better risk proposition for the studios and that will lead to more of those movies getting released because it’s easier to take a risk and manage the outcomes than before,” Cinemark CEO Sean Gamble said in September.
But Wedbush Partners analyst Michael Pachter told TheWrap that shorter windows have conditioned audiences to feel more comfortable waiting for films to come out on streaming, raising the threshold for what they feel is a film worthy of the time and money required to go out and see it in a theater. A “Jurassic World” or a “Top Gun: Maverick” may clear that bar, but smaller scale dramas that populate film festivals and critics’ end-of-year lists that don’t lend themselves to big-screen spectacle suffer at the box office.
“Shrinking windows make $50 million box office films uneconomic and will kill smaller productions,” Pachter said. “Having movies like ‘Glass Onion’ in theaters for only a week is really bad for competitor films, as it serves to train consumers to wait for streaming.”
He pointed to another awards contender from British-Irish filmmaker Martin McDonaugh as an example of the phenomenon. “I couldn’t wait to see ‘The Banshees of Inisherin,’ but I will wait until it is on a streaming service,” he said. “By contrast, I saw ‘In Bruges’ in the theater because I didn’t think it would ever make it to HBO.”
4. The prestige film market is dead
The trend Pachter describes has played out for several awards hopefuls that premiered at film festivals to critical acclaim but have failed to generate much interest among moviegoers. While Best Picture winners like “Green Book” and “Three Billboards Outside Ebbing, Missouri” could once be counted on to make at least $40-$50 million domestically, films like “Tár,” “The Banshees of Inisherin,” and “She Said” are struggling to clear $10 million.
Even “The Fabelmans,” a film from Hollywood legend and former box office king Steven Spielberg, is a theatrical flop that will need post-theatrical revenue to make back its $40 million budget. While it won’t be as big a box office failure as Spielberg’s pricier 2021 remake of “West Side Story” and could eventually turn a profit after it leaves theaters, the idea of a Spielberg film needing legs just to reach $25 million in theatrical grosses was unheard of even five years ago, when his movie “The Post” legged out to $179 million worldwide.
This is shaping up to be an existential problem for art-house theaters clinging to a mostly aging audience that still has interest in seeing this sort of thought-provoking fare on a big screen.
“It’s a bit of a fickle marketplace. Before the pandemic, the knock against Hollywood was that films weren’t being made for adults, that it was all about the superheroes,” said Dergarabedian. “Well, there were plenty of films for adults this fall, but ‘Ticket to Paradise,’ the most lighthearted of the group, was the only one that made any considerable amount of money.
A major reason why box office returns were so poor early this year — January and February grosses failed to top $400 million domestic — was this year’s Best Picture nominees failed to lure audiences to theaters. While strong legs from “Avatar: The Way of Water” could help carry the load in the early weeks of 2023, there’s again unlikely to be an Oscar market since most top contenders will be available on streaming by the time the Oscar nominations are announced on Jan. 24.
Before COVID, analysts regularly talked about how the box office had become a 52-week release calendar, and how studios could release a hit film at any time of the year. Theaters better hope that still rings true and that studios can consistently release big hits during months historic dry periods like January and August, because if they don’t, the industry will have to deal with revenue droughts that will be deeper than ever before.
5. Theaters need more films
A big reason why there were so many long droughts at the box office this year was a significant lack of new films from the major studios — due to pandemic-related delays in production as well as a scaling back on release slates by some studios like Warner Bros. While there were 29 films released in 2019 that grossed over $100 million in North America, there were only 18 this year.
That should change next year, when 38 franchise films are scheduled for release, including films like Marvel’s “Ant-Man and the Wasp: Quantumania” in February and Warner Bros./DC’s “Blue Beetle” in August that could help mitigate the late winter and late summer slumps that we saw this past year.
In fact, every studio’s slate includes a title from some of their biggest IP. Universal will release the pricey “Fast & Furious” blockbuster “Fast X” in May, Sony will have the return of Miles Morales with “Spider-Man: Into the Spider-Verse,” Tom Cruise and Paramount will be at it again with “Mission: Impossible — Dead Reckoning” and even Lionsgate, which only had four wide releases this year, is sending in a fourth “John Wick” film and a prequel to “The Hunger Games.”
More films should mean more revenue for theaters and a chance to get annual domestic totals from the $7.4 billion seen in 2022 to possibly around $9 billion. But with only a small handful of non-franchise films making serious cash this year, it’s hard not to imagine a scenario where theaters rely more than ever on sequels, prequels, spinoffs and cinematic universes for their continued existence.