When Everything Everywhere All At Once premiered last spring, Alamo Drafthouse offered special screenings where contestants were gifted packages of googly eyes. The peepers were a reference to a central character’s habit of putting the gag item on anyone and anything he can. When Jordan Peele’s twisted horror film Nope opened in July, the Texas-based theater chain held a pop-up screening at a Hollywood horse ranch. It was a sly nod to the horse-fighting siblings at the center of the alien thriller. And when “The Menu,” a horror film that sends up haute cuisine, debuted last November, Alamo offered its guests multi-course feasts of slowly poached oysters and biodynamic wines so they could dine in style like the on-screen character was with Killed Elan.
“We’re doing everything we can to get people back to the movies,” said Sarah Pitre, senior film programmer at Alamo Drafthouse. “We are passionate about films and want to do more to maximize the content we show. It’s about rebuilding that relationship with our customers.”
Going the extra mile seems to pay off. As a result, Alamo has outperformed the industry by double digits in what has been a roller-coaster year for films. It’s a reminder of the kind of rush it took at a time when the film business was struggling and largely failing to regain its footing in the wake of the pandemic. Overall, domestic ticket sales in 2022 collapsed more than 30% from pre-COVID levels, and analysts expect U.S. revenue to top out at just over $7.5 billion. That’s largely because studios have released 40 fewer films over the past 12 months than they did in 2019, as they scramble to get projects back into production amid an unpredictable health crisis. The decline in theatrical releases roughly matched the shortfall in sales declines. Cinemas need films to show, and for much of 2022 there was too much space on their marquees.
“It’s definitely been a year of recovery,” says Tearlach Hutcheson, VP of Film at Studio Movie Grill. “There’s still a shortage of product from studios, and it’s going to take a while to change that.”
Cinema owners believe next summer will be stronger with the release of sequels like The Guardians of the Galaxy and The Fast and the Furious. However, they don’t expect things to return to pre-pandemic levels before 2024. That’s a long time to wait for a company that’s been hit hard by a prolonged shutdown and changing tastes as viewers become more accustomed to watching streaming services. It’s already leading to closures and bankruptcies – Cineworld, the owner of Regal and the world’s second-largest exhibitor, filed for Chapter 11 protection in September, and some industry watchers believe other chains may be forced to follow suit if things take a turn not improve.
“You’re going to see a wave of bankruptcies,” predicted one executive, who spoke on condition of anonymity. “Private equity is likely to step in, buy some of these theaters and shut down their underperforming screens and cut costs. They won’t go away, but it’s going to be tough.”
COVID and politics have fundamentally changed a business that, let’s face it, was already retiring before the virus turned things upside down. It was an industry that relied on spectacles and superheroes to sell tickets, and they cost a lot of money to deliver. As a result, the major changes that have taken place in a shrinking global theatrical landscape are making it increasingly difficult for films to turn a profit. Russia’s invasion of Ukraine means no more Hollywood films will be released in the country – a blow considering Russia is one of the top 10 markets for films. Even more troubling, tensions between the US and China have meant fewer studio films are entering the country or are burdened with unappealing release windows. And the country’s skyrocketing COVID rates may have negatively impacted the results of Avatar: The Way of Water, one of the rare Hollywood productions to get a coveted release date in China. That’s a problem, because for a big blockbuster with a budget of more than $200 million, doing well in a huge market like China can mean the difference between making a profit and losing money.
“China has been tumultuous, to say the least,” said Veronika Kwan Vandenberg, director of sales for Universal Pictures International. “There are still many opportunities in China, but it’s never a guarantee. It’s more of an icing on the cake.”
It was also a turning point year, exemplified most dramatically by Paramount Pictures, which had been largely written off as a major player after a decade of corporate change and instability. Instead, Paramount returned to the competition and unveiled the year’s highest-grossing release, Top Gun: Maverick, and rounded it out with hits like Sonic the Hedgehog 2, The Lost City, Smile, and Scream . “Babylon,” Damien Chazelle’s $80 million look at the early days of the film business, was his only flop.
“It’s really been an amazing year,” said Brian Robbins, President and CEO of Paramount Pictures. “And I felt like we were living in an alternate universe.”
In fact, Paramount’s experience seemed to unfold in an alternate reality. Even as it thrived, most other studios faced painful failures. Disney missed the mark with its two animated films, Strange World and Lightyear, both of which bombed at the box office and likely lost more than $100 million apiece. Her collapse spells trouble for family functions, which were one of the most dependable theater demographics before COVID turned things upside down. There have also been several attempts to launch or expand new franchises that have clashed with audience indifference, such as B. Warner Bros. “Fantastic Beasts: The Secrets of Dumbledore” (turns out nobody cared where to find them); “Black Adam,” in which DC’s new leadership announced that Dwayne Johnson’s antihero would play no part in the next phase of his universe building; and Lionsgate’s Moonfall, a disaster film that cost more than $140 million to produce and grossed a disastrous $67.3 million.
Prestige fare, the kind of titles positioned to win awards, also struggled at the box office. Films like “She Said”, “Bones and All” and “The Fabelmans” received critical acclaim but failed to translate those reviews into lines in the multiplexes. Those movies have yet to gross $15 million worldwide, a dismal result that could mean adult-targeted movies, at least those that don’t feature special effects and explosions, will continue to migrate to streaming services, where they do better shielded from advertising are reflections.
So what worked? Franchises, particularly those related to comics, continued to dominate the box office. Domestically, nine of the top 10 films were sequels – the one entry without a roman numeral, The Batman, wasn’t exactly an original film. It’s a reboot of a character who has starred in more than a dozen films. And what worked for US audiences also worked for international ticket buyers. Eight of the world’s top-grossing films have also been sequels, with The Batman and Chinese sci-fi comedy Moon Man proving to be exceptions to the rule. These films accounted for a disproportionate share of box office receipts. In 2022, the box office is more concentrated at the top, with the 10 highest-grossing films accounting for over 60% of total box office sales, compared to 47% in 2019. And that’s a problem, because these big films are meant to be the big ones pulls, but for business to keep booming, there have to be more complementary pieces.
“Studios have always been focused on home runs, but the singles, doubles and trebles kept the distribution channels going,” said Greg Foster, a shows industry consultant. “In 2022, there just weren’t enough broad releases.”
And while the summer box office got off to a flying start with Top Gun: Maverick and built on that success with hits like Jurassic World: Dominion and Minions: The Rise of Gru, business fell into an ongoing doldrums in August, from which it had not really recovered by the end of the year. Of course, there were a few big hits like “Black Panther: Wakanda Forever” and “Avatar: The Way of Water,” but those successes weren’t enough to propel other new releases. They were also few and far between – there weren’t any big films to show for too long. As a result, movies like Bros, Devotion, and Easter Sunday suffered some of the worst debuts in cinema history.
“We had some problematic breaks in 2022,” said Megan Colligan, president of Imax Entertainment. “A break in August happens all the time. you can live it But if November and December are breaks, that’s not good.”
Theater execs like Pitre are already looking to the months ahead, hoping to find the kind of offbeat or unconventional offerings that can draw crowds and serve as a bridge to the next blockbuster. She thinks she’s found one in “Cocaine Bear,” a darkly funny thriller about a black bear who takes a beating and goes on a murderous rampage.
“We have some pretty wild ideas for parties to throw in the lobbies of our theaters,” says Pitre. “It’s the kind of film we love.”