MOVIEGOING COMEBACK STALLS AS STUDIOS ABANDON AUGUST AND SEPTEMBER
After consistent growth and improvement in the box office during 2022, the North American exhibitors hit a stretch of rough road midway through the third quarter and finished the thirteen-week period with a flat tire. In our quarterly reviews, we look to identify the key factors impacting ticket sales.
While we usually find several dynamics at work, the Q3 downturn was driven by one overriding factor – studios did not have any significant commercial films to offer over the final eight weeks of the quarter. This resulted in two long months of poor ticket sales and a loss in momentum.
The quarter kicked off with some promise when THOR: LOVE AND THUNDER opened on 7/8 and went on to earn $343M during its North American theatrical run. This came after the 7/1 release of MINIONS: THE RISE OF GRU, which contributed a healthy $202M during the quarter. The next four weeks witnessed a consistent lineup including WHERE THE CRAWDADS SING on 7/15, NOPE on 7/22, DC LEAGUE OF SUPER PETS on 7/29, and finally BULLET TRAIN on 8/5. As of that point, the third quarter box office was running at 169% compared with the same period in 2021. Alas, BULLET TRAIN would prove to be the last Q3 release with any broad appeal. Here’s a comparison of the first five weeks of Q3 compared with the eight weeks that followed, including results from both 2022 and 2021.
The last eight weeks of Q3 2022 slipped badly in comparison with the same eight-week period from 2021. It was the first stretch since the recovery took hold in mid-2021 that the North American box office was lower than it had been one year before. Variety reported $328M in Domestic ticket sales for September, the worst September result since 1996 aside from 2020 at the height of COVID disruptions. Does one wonder why Studios disappeared during this two-month period?
To begin to answer this question, consider the history of studio releases during this same period from each of the three years prior to 2020. While industry consensus would seem to indicate that August and September are slow periods for moviegoing, actual results indicate that it is possible to find success in the waning days of summer.
RECENT HISTORY OF MOVIE RELEASES FROM THE SECOND WEEK OF AUGUST – SEPTEMBER
As can be readily seen, the top ten theatrical releases during the last eight weeks of Q3 2022 are significantly lower than results from the same period during the last three “normal” years.
In fact, individual titles can perform very well during this timeframe, demonstrating clearly that content drives ticket sales more than the calendar.
During the eight-week period we are highlighting, thirteen titles released in 2018, 2019 and 2021 earned more than the #1 movie released during that period in 2022, THE WOMAN KING. Evidently, high-profile pictures can succeed during this window. So why not this year?
One theory holds that studios had already released all their best titles during the second quarter, leaving not much interest for this later period. Another is that COVID’s impact on production had finally arrived, creating a gap in the availability of new films. While these factors may have played a role, we feel that the primary reason is that studio execs have become increasingly risk-averse and were not willing to “take a chance” by releasing a top-tier movie during a potentially slow period in moviegoing.
William Shakespeare said it best when he said, “the play is the thing.” We agree with this wisdom, and fervently proclaim that if a good movie had been available, it would have found its audience and performed well. Both moviegoers and exhibitors were left wanting, unnecessarily.
The good news is that we also believe that this gap is not likely to reoccur. An early look at this same period in 2023 indicates that studios are already lining up better films to take advantage of this stretch on the release calendar. The announced titles include HAUNTED MANSION (8/11/23), GRAN TURISMO (8/11/23), LAST VOYAGE OF THE DEMETER (8/11/23), BLUE BEETLE (8/18/23), THE EQUALIZER (9/1/23), THE NUN 2 (9/8/23) and EXPENDABLES 4 (9/22/23).
Despite the unfortunate eight-week drought in major films, Q3 2022 ended up with 122% of the amount earned in Q3 2021. We should see much better numbers next year if Hollywood steps up, as expected, with a reasonably strong lineup of new releases.