Theatres Needed an Uptick But Instead They Actually Fell Behind
The fourth quarter of 2022 began on Friday 10/7/22 and ended on Thursday 1/5/23. The 13-week frame included film weeks 39-52, including the all-important moviegoing period before and after the Thanksgiving and Christmas holidays. At its outset, the industry was coming off a slowdown when comparing results from 2022 to those from 2021.
The first and second quarters of 2022 saw meteoric gains in box office results when compared to 2021, with increases of 479% in Q1 and 296% in Q2. However, Q3 sputtered to reach only 122% compared with Q3 in 2021. While July started strong, the industry suffered through August and September with a drought in new releases that had broad commercial appeal. This left Q3 2022 weak by comparison with the same period from the prior year.
At its outset, most analysts were expecting the Q4 box office to be equal to or greater than the year before, based on a promising slate of new releases, both in terms of quantity and quality. Exhibitors were eager to welcome crowds for BLACK ADAM (10/21), BLACK PANTHER: WAKANDA FOREVER (11/11), and AVATAR: THE WAY OF WATER (12/16). Alas, it didn’t quite play out as expected, with Q4 2022 generating only 90% of the amount earned in Q4 2021. Therefore, this review will include our analysis of what went wrong.
Let’s start with a comparison of the Top 10 box office performers in each year’s Q4.
The Top 10 for Q4 2022 earned only 92% of the amount earned by the Top 10 for Q4 2021, and the total box office for all films in Q4 2022 came in at 90% of all films in Q4 2021. On the bright side, this year’s top three Q4 performers beat out the top three movies in last year’s Q4.
Despite a slight underperformance for BLACK ADAM, which most analysts expected to earn $200M or more, the total for the top three Q4 movies this year earned 112% compared with last year’s top three. However, when we continue down the list to look at titles 4-10, we quickly see the problem with this year’s results.
Movies 4-10 on this year’s box office charts generated only 62% compared with last year’s movies with those same rankings. In fact, last year’s movies number four, five, and six on the box office charts all earned more than $100M, whereas none of this year’s titles after the top three were able to accomplish that feat. In fact, this highlights the lack of depth from new movies in Q4 2022.
Another useful comparison is to track the cumulative quarterly grosses between the two years.
With three weeks left to go, the Q4 box office stood at 102% compared with that same period from Q4 2021. By year’s end, that comparison had dropped down to 90%. When we compare results from that three-week period around the Christmas holiday, we see the magnitude of the shortfall.
These three weeks surrounding Christmas 2022 only generated 73% of the box office from those same weeks in the prior year. Unfortunately, this period is typically one of the highest-grossing stretches of the year. By comparing the wide-release movies that opened during that period, the root cause of this year’s shortfall becomes clear.
Alas, this year’s wide releases only generated 72% of the amount earned by last year’s crop. AVATAR: THE WAY OF WATER was not able to match the phenomenal success of last’s year’s SPIDER-MAN: NO WAY HOME, PUSS IN BOOTS: THE LAST WISH did not equal last year’s SING 2, and WHITNEY HOUSTON: I WANNA DANCE WITH SOMEBODY and BABYLON were unmitigated disasters at the box office.
Moreover, exhibitors had originally expected Q4 releases for SHAZAM: FURY OF THE GODS and A MAN CALLED OTTO, but Warner Bros. and Sony later decided to delay their releases because of concern that their prospects would be limited by having to compete with James Cameron’s AVATAR 2. In the end, Q4 2022 came in at 90% compared with Q4 2021, and the full year 2022 generated only 66% of the annual box office from 2019, the last full year prior to the pandemic.