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Why ‘Star Wars’ and ‘Avengers’ Weren’t Enough to Set a Box Office Record in 2019

Not even the potent combination of the Avengers, Buzz Lightyear, and Luke Skywalker could push the 2019 box office to new heights. When the year wraps up, domestic ticket sales will be down more than 4% at $11.4 billion and admissions should dip by roughly the same percent. Looking ahead, most movie industry observers believe that 2020 will suffer a similar decline. Still, that haul will rank as the second- or third-biggest in history after final numbers are tallied.

But the slide in revenues is still disappointing because it occurred at a time when Walt Disney Studios put nearly all of its major franchises on the field — a show of firepower that enabled the company to pulverize records, racking up more than $11 billion at the global box office. With an arsenal that includes Lucasfilm, Marvel, Pixar, and — thanks to its $71 billion acquisition of much of Rupert Murdoch’s media empire — 20th Century Fox, Disney was able to control roughly 40% of the domestic marketplace.

“It’s certainly a very special year for us,” said Cathleen Taff, Disney’s president of global distribution. “The key for us is all of our studios contributed to it in a major way. That’s the only way you get to a year like this.”

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Even Disney’s box office torrid streak was overshadowed by larger changes that have been roiling the entertainment industry, changes that the conglomerate is playing a pivotal role in instituting. The reason that Disney crowded blockbusters “Avengers: Endgame,” “Star Wars: The Rise of Skywalker,” “Toy Story 4,” and “The Lion King” into the same calendar year was because it needed splashy movies to show on Disney Plus, the streaming service it launched in November. But Disney isn’t alone in trying to elbow into the space once controlled by Netflix. Apple has begun backing original content, Amazon is already in the game, and NBCUniversal’s Peacock, as well as WarnerMedia’s HBOMax will all debut in the coming months. Disney chief Bob Iger, not given to hyperbole, has stated that Disney Plus is “a huge statement about the future of media and entertainment and our continued ability to thrive in this new era.”

Clearly, the stakes for these companies could not be higher, nor could the perils. In an effort to attract customers, these players have stopped licensing movies and television shows, depriving themselves of tens of millions of dollars in profits. It’s also possible that if they offer too many compelling entertainment options at too great a bargain, an already eroding theatrical space could further constrict. That’s left studios scrambling to ensure that the movies they greenlight for theaters have a compelling hook in order to compete with a widening array of entertainment options.

“The industry as a whole has to get away from churning out content for the sake of making content,” said Chris Aronson, Paramount’s head of domestic distribution. “Yes, it has to be something people want to see, but it has to be executed perfectly. You have to have all the elements come together. I don’t think there’s any room for error anymore. There’s no bottom. When you miss, you miss bad and you lose a lot of money.”

Others believe that streaming services and moviegoing can co-exist. They foresee a future that is complementary, rather than cannibalistic. Patrick Corcoran, VP and chief communications officer of the National Association of Theatre Owners (NATO), says that data suggests that people who subscribe to Netflix and other services still buy tickets to movies. He points to a recent survey by Fandango, which found that 78% of moviegoers said they were more excited to see “The Rise of Skywalker” because they’d been watching “The Mandalorian.” The “Star Wars” TV spinoff series began streaming on Disney Plus just weeks before the Skywalker saga ended its runs on movie screens.

“In this case, it’s feeding both ends of the business,” said Corcoran. “Streaming isn’t a replacement for moviegoing. It’s a different thing, but people still want to get out of the house.”

With Disney Plus entering the fray, Netflix continued to spend freely, releasing big-budget movies such as Martin Scorsese’s “The Irishman,” Michael Bay’s “6 Underground,” and J.C. Chandor’s “Triple Frontier.” Many of these films received only a token theatrical release before debuting on the streaming service. There had been high hopes that the release of “The Irishman,” hailing from Scorsese, a fierce defender of the primacy of the big screen experience, would result in some sort of grand bargain. However, major theater chains such as AMC and Regal balked at Netflix’s reluctance to agree to only a modest reduction of the standard exclusive theatrical window of three months. Netflix was forced to release the movie, which earned ecstatic reviews and is expected to be a major Oscars contender, with smaller chains, giving it an exclusive theatrical run of just under a month.

“Netflix really missed an opportunity here,” said Corcoran.

Netflix and premium cable channels such as HBO may not allow filmmakers to have a traditional theatrical rollout for their latest works, but they are giving them financial support and the opportunity to take creative risks. That could be a problem for an industry that thrives on attracting top talent. Cable and streaming programs such as “The Watchmen,” “The Crown” and “Chernobyl” were every bit as acclaimed and buzzed about as any of this year’s awards contenders.

“The biggest challenge is keeping above the line talent working in the studio system versus the streaming world,” said Jeff Bock, a box office analyst with Exhibitor Relations. “All these new creators of content are coming of age in a system where TV is every bit as glamorous and rewarding as film, if not more so. Plus, there’s much more creative freedom with streaming content versus theatrical. You can grow an audience and take more chances. That’s what’s working against theatrical.”

As they prepared to forge into the brave new world of streaming, studio chiefs leaned on sequels and reboots to help meet their quarterly goals. Every one of the top 10 highest grossing movies hailed from pre-existing franchises and cinematic universes or were remakes of popular films. On the face of it, that would seem to spell a death knell for novelty and fresh ideas. And yet, original content had a surprisingly strong run, with the likes of Lionsgate’s “Knives Out,” Fox’s “Ford v Ferrari,” Universal’s “Us,” Paramount’s “Rocket Man,” Sony’s “Once Upon a Time…In Hollywood” and STX’s “Hustlers” all managing to draw crowds despite the fact that they didn’t boast roman numerals in their titles.

“Contrary to popular belief, you can tell very original films with a modest budget and have them perform extraordinarily well,” said Jim Orr, Universal’s distribution chief. “That, to me, is exciting. That means people very much want to be out in theaters.”

Not every film got to enjoy that kind of Hollywood ending, with many flops enduring the lows that Orr alluded to. Warner Bros. suffered a string of money-losing adult dramas such as “The Kitchen,” “The Goldfinch,” and “Richard Jewell,” showing the difficulty of launching challenging movies in a climate that still favors costumed superheroes over flesh-and-blood, flawed protagonists. Even movies that boasted sprawling special effects budgets or that were part of well-known franchises weren’t immune to the fickle nature of audience tastes. Other studios watched the red ink rise as “Cats,” “Terminator: Dark Fate,” and “Charlie’s Angels” bombed in spectacular fashion.

“The audience is more discerning — the highs are high and the lows are lower,” said Joe Drake, chairman of Lionsgate’s motion picture group. “When you don’t get it right, you’re seeing cases of total audience rejection. Theatrical decisions are more acute.”

In this Darwinian climate, a movie such as “Avengers: Endgame” can bow to a massive $357.1 million domestically, going on to rack up $2.8 billion globally, enough to supplant “Avatar” as the highest-grossing movie in history. But in the same year, a film like “The Goldfinch,” which is based on a beloved best-selling novel and boasts a cast that includes Ansel Elgort and Nicole Kidman, can debut to a paltry $2.7 million, one of the worst wide-release openings of all time.

Every weekend, it’s survival of the fittest. Welcome to Hollywood in 2019.

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