The Movie Business Is in Shambles. When Will It Recover?

  • The movie business is still recovering, and it will be for at least another year, if not more.
  • Theaters are facing an alarming lack of tentpole movies for the remainder of the year.
  • Regal is considering filing for bankruptcy, raising questions about the number of screens in the US.

The recovery of the movie business during the pandemic has expectedly been a marathon rather than a sprint. But it’s taking longer than any studio or theatrical executive probably hoped for.

Studios aren’t releasing as many movies as before the pandemic. Regal, one of the biggest theater chains in the US, is considering filing for bankruptcy. Warner Bros., one of the five major Hollywood studios, is still shuffling its release calendar as its new parent company looks to save costs.

After a promising summer box office led by “Top Gun: Maverick,” movie theaters are facing a dire lack of movies for the remainder of the year. The next surefire hit may not be until November, when “Black Panther: Wakanda Forever” is released.

John Fithian, the head of the National Association of Theater Owners, told Insider that the organization doesn’t expect movie supply to be back to pre-pandemic levels for another 12 to 18 months, which would bring us to late 2023 at the earliest.

Fithian is optimistic: “When the movies are there, moviegoers are coming.”

top gun maverick

Tom Cruise in “Top Gun: Maverick.”

Paramount Pictures


For certain movies, that’s been true. “Maverick” has earned close to $700 million just in the US. Other franchise tentpoles, like “Doctor Strange in the Multiverse of Madness” and “Jurassic World: Dominion,” have also performed well. The indie hit “Everything Everywhere All at Once” has impressed.

But mid-budget, non-franchise dramas and action movies, from “Ambulance” to “Bullet Train” to “The Northman,” largely aren’t quite there yet.

Fithian noted two reasons he’s bullish about movie supply in the long-term: A) the new company Warner Bros. Discovery has expressed commitment to movie theaters, a dramatic shift from the streaming-focused WarnerMedia, and B) The National Association of Theater Owners is still optimistic that streaming-first companies like Netflix, Amazon, and Apple are considering stronger theatrical releases.

But for the time being, Warner Bros. has a lot to figure out. The studio just pushed back “Aquaman and the Lost Kingdom” (again) from March, 2023 to December, 2023, as well as “Shazam! Fury of the Gods” from this December to March.

The Hollywood Reporter reported that Warner Bros. Discovery wants to spread out marketing and distribution costs related to releasing the movies. That means Warner Bros. only has two more movies coming out this year: “Don’t Worry Darling” in September and “Black Adam” in October.

As for streaming companies getting into the theatrical business in a more prominent way, Fithian doesn’t predict that to happen for another 12 to 18 months, as well, even though theater owners have been pushing the matter for some time.

“It will take a while, but our general sense is that we’ll get more movies theatrically from companies that traditionally haven’t done that,” Fithian said.

Brad Pitt on a train

Brad Pitt in “Bullet Train.”

sony


Meanwhile, analysts with the Wall Street firm MoffettNathanson projected the US box office to finish with $7.9 billion this year, “with only modest growth to $8.5 billion in 2023, still down -26% from 2019.”

The bottom line: despite enjoying reasons for optimism in the first half of the year, the movie industry is still in a hard reset mode, and will continue to be throughout 2023 and maybe even into 2024.

In the short term, Regal, the cinema chain owned by the world’s second-largest theater operator Cineworld, said this week that it’s exploring filing for bankruptcy as a strategic option in the face of a limited film slate.

This could be a Regal-specific problem. But it does highlight bigger questions facing the theatrical and film industries, including whether there are too many movie theater screens for the current audience appetite.

There are around 40,700 movie screens in the US. That number hasn’t changed much since 2019, the last pre-pandemic year.

“The US is almost certainly overscreened,” Matt Belloni wrote in his Puck newsletter What I’m Hearing on Sunday. “These theaters need to justify themselves now, and many can’t. Bankruptcy will allow Cineworld, for instance, to escape some onerous leases.”

The MoffettNathanson analysts wrote similarly: “The US film industry is in dire need of restructuring and we expect to see a drop in US screens as the business looks to normalize.”

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