Hollywood’s Shaky Summer Box Office Points To Larger Issues

September 3, 2019

A movie theater in Bronxville, N.Y. “Yesterday” was the sleeper hit of the summer, costing about $26 million to make and collecting $135 million worldwide.CreditCreditBrad Dickson for The New York Times

Brooks Barnes

This was supposed to be the summer when Hollywood blew the doors off theaters. Stay home and stream? Not with Simba, Spider-Man, John Wick, Snowball, Buzz Lightyear, Aladdin, the X-Men and Godzilla on the way.

Instead, the film business finds itself lagging last year’s surge and facing questions about why. Some box office analysts point to 20th Century Fox, which imploded in Rupert Murdoch’s handoff to Disney and delivered three bombs in a row. Others say moviegoing has become too expensive — concessions, tickets, babysitters — especially given the growing array of low-priced at-home entertainment options that are often already part of a household’s budget.

Or is something bigger going on? “It is another sign that the broader economy is in a fragile place,” said Mark Zandi, chief economist at Moody’s Analytics, noting that some other leisure businesses — Disney theme parks, Major League Baseball games — also had a soft summer.

From the first weekend in May to Labor Day, a period that can account for as much as 40 percent of annual movie ticket sales, box office revenue in the United States and Canada is expected to total about $4.32 billion, a 2 percent decline from the same period last year, according to Comscore.

 

For the year, revenue from ticket sales is down 6.3 percent, which roughly translates to a 5 percent decline in attendance. That is despite the runaway success of “Avengers: Endgame,” the Disney-Marvel superhero movie that arrived in late April and collected a record-breaking $2.8 billion worldwide, nearly $860 million of that in North America.

The specialty box office has been in particularly rough shape. Between January and Aug. 25, combined ticket sales for the 20 largest art film distributors (Fox Searchlight, Magnolia and the like) fell 45 percent from the same period last year, according to Box Office Mojo data.

The movie business ebbs and flows depending on factors that vary from reviews to the weather. Ticket sales soared 15 percent last summer in part because of pent-up demand; the “Incredibles” series from Pixar returned after a 14-year hiatus, and “Crazy Rich Asians” was the first studio movie in 25 years to tell a contemporary Asian story. The art-house sector is extra-dependent on quality, and distributors say gems have been in short supply lately, in part because Netflix has snapped up so many of them (for premium prices).

Scarlett Johansson and Jeremy Renner in “Avengers: Endgame,” whose success couldn’t prevent an overall 6.3 percent drop in ticket revenue this year.CreditDisney/Marvel Studios, via Associated Press

Hollywood could make up ground in the coming months with potential blockbusters like “It: Chapter 2,” “Joker,” “Frozen 2,” “Jumanji: The Next Level,” “Cats” and “Star Wars: The Rise of Skywalker.” Specialty distributors have high hopes for Bong Joon-ho’s “Parasite” (Neon), which was the top prizewinner at Cannes, and “Downton Abbey” (Focus Features).

But box office experts say the theatrical landscape has shifted, possibly permanently. Before it drowned in red ink, MoviePass, the cut-rate ticket subscription service, trained fans (especially younger ones) to expect deep discounts. Streaming services like Netflix, Hulu and Amazon Prime have also proliferated, offering huge catalogs of movies and shows for a comparatively low price. At this point, many living rooms are equipped with large flat-screen televisions.

Netflix charges $13 a month for its standard plan. Disney Plus, a service dedicated to everything Disney, Pixar, “Star Wars,” National Geographic and Marvel, will arrive in homes on Nov. 12 and cost $7 a month.

For a comparison, standard movie tickets cost $16 to $18 in New York and Los Angeles; IMAX screenings run about $22.

(The average ticket price in the United States in the second quarter was $9.26, down from $9.38 a year earlier, according to the National Association of Theater Owners. The average price reflects discounts — child, senior and matinee tickets — and tickets sold outside the more expensive cities.)

“Pricing was never an impediment to going to the movies, and it is now,” said Chris Aronson, a former distribution chief for 20th Century Fox who now runs his own consultancy. “Streaming services have come along with such attractively priced entertainment that theaters can’t compete, except on a handful of event movies that people absolutely must see.”

Out-of-home entertainment had a down summer in general. Attendance at Major League Baseball games is expected to fall for the fourth consecutive season, according to Two Circles, a sports marketing agency. Broadway attendance has declined 2.6 percent from a year earlier, according to the Broadway League. Full data was not yet available for concerts, but early numbers suggest a decline, according to statistics from Pollstar, a trade publication.

The No. 1 movie of the summer was “The Lion King,” which took in $514 million in North America and $1 billion overseas.CreditDisney, via Associated Press

Attendance eased 3 percent at Disney theme park resorts in Florida and California in the April-June period, according to the company’s quarterly financial report. National Park Service data shows that Yellowstone National Park had fewer visitors in May, June and July.

“Recreation is, of course, a discretionary purchase, and that it has gone soft reflects greater caution by consumers,” Mr. Zandi said.

On a studio-by-studio basis, Hollywood’s summer was severely lopsided. The top 10 movies generated $2.57 billion in domestic ticket sales, and Disney commanded 51 percent of that total — with just three films: “The Lion King,” “Toy Story 4” and “Aladdin.” The No. 1 movie of the summer was “The Lion King,” a remake that took in $523.5 million in North America and $1 billion overseas (and is still playing).

Disney was humbled, however, by the performance of its newly acquired 20th Century Fox division, which delivered a hall-of-fame bomb: “Dark Phoenix,” an X-Men movie, cost an estimated $350 million to make and market and collected $252 million worldwide, roughly half of which goes to theater owners. Two other Fox movies, “Stuber” and “The Art of Racing in the Rain,” also fizzled at the box office. All were well in the works before the Disney deal.

Sony Pictures Entertainment accomplished a unique feat, releasing a juggernaut superhero sequel, “Spider-Man: Far From Home,” and a completely original blockbuster, “Once Upon a Time … in Hollywood.” No other studio showed that range.

“We believe in balance, and you can see this exact strategy in the rest of our year,” said Thomas E. Rothman, Sony’s movie chief, noting the “Jumanji” sequel and an original drama, “A Beautiful Day in the Neighborhood,” which stars Tom Hanks as the television personality Fred Rogers.

“As strong as the audience is for superheroes and sequels, we limit ourselves to serving that audience at our peril,” Mr. Rothman said. “It will ultimately narrow the business. We have to think about every audience.”

Sony Pictures Entertainment has high hopes this fall for “A Beautiful Day in the Neighborhood,” starring Tom Hanks as Fred Rogers.CreditLacey Terrell/Sony-TriStar Pictures, via, Associated Press

Sony misfired with “Men in Black International” in June, but the studio limited its financial exposure on that science-fiction film by bringing in outside financiers to share the production costs. “We wish it had gotten more enthusiasm,” Mr. Rothman said.

For the year, Sony is a whisper away from Warner Bros. in domestic market share, a standing that drew double takes in Hollywood. Just a few years ago, Sony was sputtering and Warner was the film industry’s superpower. But Warner, now owned by AT&T, has struggled in recent months.

Warner had hoped that female moviegoers would rally around releases like “The Kitchen” and “Blinded by the Light,” which were directed by women. But they were dead on arrival. “Shaft,” starring Samuel L. Jackson, similarly failed to catch on with black ticket buyers, its target audience. Warner was pleased with the turnout for “Annabelle Comes Home,” which collected $72.7 million in North America, but the film, a sequel to a sequel, trailed its franchise predecessor by 29 percent.

Lackluster marketing? Subpar movies? Fingers have been pointing inside the studio. Warner’s top films of the summer were “Pokémon Detective Pikachu,” which took in $432 million worldwide, and “Godzilla: King of the Monsters,” which collected a disappointing $386 million. (An independent company, Legendary Entertainment, led the production effort on both of them.)

Warner declined to comment.

In a few cases, studios suffered because hoped-for behemoths were merely big. “Rocketman,” the Elton John bio-musical from Paramount Pictures, sold $190.4 million in tickets worldwide — a very healthy number. But it was less than half the amount Paramount thought was possible.

Universal Pictures and its Illumination animation division had a similar experience with the humdrum “Secret Life of Pets 2,” which generated $414 million. The first chapter sold $875.5 million in tickets.

“Sequels and remakes that do not bring something different, original and outstanding are going to lose their audience fast,” said David A. Gross, who runs Franchise Entertainment Research, a movie consultancy.

Otherwise, Universal mostly succeeded. A high-stakes “Fast and Furious” spinoff, “Hobbs & Shaw,” has chugged away in theaters since arriving in early August, taking in roughly $700 million worldwide. Comedies, which have struggled in theaters in the streaming age, also came through for Universal, in particular the Beatles-themed “Yesterday.” It was the sleeper hit of the summer, costing about $26 million to make and collecting $135 million.

 

Read More:
https://www.nytimes.com/2019/09/01/business/media/summer-box-office-movies.html