Box office revenue up 70% in 2022. Is recovery to pre-pandemic levels next?

The box office jumped back from the pandemic’s sharp losses in 2022, but recovering to 2019 levels is the next challenge for the industry to clear in the new year.

According to data from Comscore, the domestic box office brought in an estimated $7.29 billion through December 26, which is nearly a 70% increase year-over-year, but still 30% below pre-pandemic levels when ticket sales totaled in North America. $11 billion.

Shares of AMC (AMC), IMAX (IMAX), and Cinemark (CNK) are down nearly 85%, 25%, and 50%, respectively, this year as media stocks have plunged a whopping $500 billion in value over the past year. (Of course, AMC is in a slightly different batch due to its prominent role in the stock meme crash.)

However, there is hope among analysts that next year’s boosted release schedule will help bridge the gap after production delays caused by the coronavirus pushed a slew of titles into the new year.

“The lesson is if you build it, it will come,” Paul Degarabedian, senior analyst at comscore told Yahoo Finance Live, noting that there were about 40 fewer issues in 2022 than in pre-pandemic times. “When the movies were around in the summer, we saw the box office explode. But there weren’t many movies in the post-summer period.”

Sean Robbins, senior analyst at Box Office Pro, added: “Theaters need more movies. That’s really the bottom line… I look at 2023 on the whole as an improvement over 2022.”

Robbins said more mid-range, or $50 million to $175 million films, along with more family-friendly content will help boost ticket sales with more than 100 wide-release films lined up for next year.

He said sequels like “Fast X,” “Shazam! Fury of the Gods,” “Transformers: Rise of the Beasts,” “Dune: Part Two,” “Creed III,” “John Wick: Chapter 4,” and “Hunger Possibly.” That “game” prequel land at the upper end of those ranges, possibly even higher.

Family titles he’s watched include “Trolls 3,” “Wanka,” “The Super Mario Bros. Movie,” “Elemental,” and Disney’s “Little Mermaid.”

“It’s hard to say we’ll have another movie the size of Top Gun Maverick, but the flip side of that coin is I think we’ll have more movies delivered in the $200 million to $400 million range,” he said.

Top Gun gets top billing

Top Gun: Maverick broke the record for 15 years after it debuted to great fanfare over Memorial Day weekend. The Tom Cruise-led sequel was the year’s highest-grossing film, taking in $1.5 billion worldwide.

The film went on to become the first-ever digital release on OTT streaming platforms before it officially debuted on Paramount+ on December 22.

But not every movie released in 2022 was an instant success story at the box office.

Disney (DIS)’s “Avatar: The Way of Water” took in just $134 million in domestic markets during its three-day opening weekend, missing expectations and sending Disney shares to their lowest since March 2020.

Despite the failure, the film recovered nicely in its second weekend over the Christmas long weekend before officially passing the $1 billion mark in global tickets 12 days after its debut – the fastest film of the year to pass the highly regarded industry standard. “Top Gun Maverick” and “Jurassic World: Dominon” were the only two films to cross the $1 billion mark this year.

“My biggest cautionary tale with this movie was playing the long game,” Robbins said. “There’s always an immediate urge to qualify a movie’s opening weekend. In a lot of cases, it’s possible, especially with pre-loaded franchises like Marvel or Star Wars. James Cameron’s movies have never been this way.”

Avatar: The Way of Water brings $1 billion in global box office ticket sales. (Photo courtesy of Disney)

The analyst noted that the film faced additional complications due to the strong preference to see it in premium formats, such as IMAX, which have a limited theatrical release compared to the overwhelming demand.

IMAX announced Tuesday that the sequel has earned $105.5 million at the IMAX global box office in less than two weeks — the fastest film to reach $100 million in IMAX since April 2019 (and only the ninth film to reach that milestone in its history).

“Avatar: The Way of Water shows the global box office stamina we have come to expect, particularly with its phenomenal performance internationally as several major markets grew their earnings over the weekend,” IMAX CEO Richard Gelfond said in a press release. Editorial”.

The film, which is largely expected to benefit from a rare release in China, has faced recent challenges with a slowdown in China’s box office amid a sharp rise in COVID-19 cases. However, according to IMAX, the company has collected $26.5 million in box office receipts in China, which is about 25.5% of the country’s total revenue on 1% of screens.

Will he embrace more theatrical signage?

Streaming companies are slowly beginning to embrace the theatrical window, with high-profile Hollywood executives saying the box office has become an essential stop for films looking to turn a profit.

“The controversy is over,” IMAX’s Gelfond previously told Yahoo Finance Live. “The argument that you can skip a theatrical window and make up for it when you’re streaming just isn’t true. The theatrical window is more necessary than ever to capture streaming revenue.”

Gelfond pointed to deep streaming losses from the likes of Disney, which saw its direct-to-consumer division shed about $4 billion in fiscal 2022, which ended Oct. 1, while other media giants such as Warner Bros. Discovery (WBD) and Paramount Global ( PARA) also struggled to achieve profitability.

Netflix (NFLX), which has been largely resisting a partnership at the box office, released “Knives Out: Glass Onion” in select theaters during Thanksgiving week, with co-CEO Reed Hastings admitting that the streaming giant had “a lot” left out of the box. Money is on the table yet refused to commit to a wider release.

“It’s a promotional tactic like film festivals, and if it works well we’ll do more of it,” Hastings said at the New York Times Dealbook Summit last month. “We’re not trying to build a theatrical business, we’re trying to cut through the hype.”

By industry estimates, the film has taken in around $13 million in domestic markets – despite only showing for one week in about 600 theaters. For comparison, a typical movie plays in about 3,500 theaters for at least 45 days.

Box Office Pro’s Robbins noted that the theatrical success of “Glass Onion” marks “a watershed moment for the relationship between Netflix and all streamers and exhibitors.”

He added, “If anything is going to affect the situation, it starts here with this movie.”

However, Netflix co-CEO Ted Sarandos played down the decision, telling investors on the company’s third-quarter earnings call: “We’re in the business of entertaining our members with Netflix movies on Netflix, so we’re focusing all of our energy and most of our spending.”

The streaming giant revealed that the sequel was streamed 82.1 million hours in the first three days since its December 23 release. That doesn’t even crack the first five movies on Netflix – trailing titles like “The Unforgivable” (85.86 million hours), “The Gray Man” (88.55 million hours), “The Adam Project” (92.43 million hours), “Don’t t Look Up” (111.03 million hours) and “Red Notice” (148.72 million hours)

Netflix released

Netflix released “Glass Onion: A Knives Out Mystery” in select theaters for one week over Thanksgiving (Courtesy: Netflix)

Tech giant Amazon (AMZN), which finalized its $8.5 billion deal to acquire MGM earlier this year, will also sharpen its focus on theatrical releases, reportedly investing $1 billion to produce 12 to 15 films a year exclusively for theaters.

“A lot will come down to what kind of content Amazon produces, how long the windows will be, and how much it depends on IP versus original material, but it’s still good news for theater owners and Hollywood,” Robbins said at The Robbins. ad time.

“Now that streaming is starting to mature, the pendulum is definitely swinging toward equilibrium as these distributors see the kind of success they’ve left on the table with a holistic approach to streaming,” Robbins said. The play continues to be a very profitable business model [Amazon’s] The news confirms this once again.

Alexandra is the chief media and entertainment correspondent for Yahoo Finance. Follow her on Twitter aliecanal8193 and email it to alexandra.canal@yahoofinance.com

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