When exhibitor Jeff Logan talks to friends and customers about upcoming movies, he’s sometimes greeted with a shrug.
“I’ll tell them there’s a new ‘Terminator’ and they’ve brought back Arnold and Linda Hamilton, and they don’t seem too excited about that,” says Logan. “Or there’s another ‘Rambo,’ and they’ll go, ‘Geez, isn’t he getting old?’ Sometimes they go back to the well too many times.”
Logan has been in the movie business all his life. As the owner of Logan Luxury Theatres, a cinema chain his father started in 1933, he runs three venues in South Dakota, and he has a good feel for the health of the industry, at least when it comes to Middle America. He’s been through boom and bust times, and in 2019, he thinks that the problem for theaters hasn’t been Netflix or HBO or any of the myriad entertainment options: It’s been the films.
Year to date, ticket sales are down 5.5%, with blockbusters including “Avengers: Endgame” and “Joker” not successful enough to paper over flops such as “Men in Black: International” and “Terminator: Dark Fate.” But Logan and other theater owners believe that help is on the way. In the coming months, “Jumanji: The Next Level,” “Frozen 2” and “Star Wars: The Rise of Skywalker” are all scheduled to hit movie screens — a trio of likely hits perfectly timed to close out the year on a high note.
“The business can’t set a record every year, but we’re going to close out strong,” Adrian Smith, Sony’s president of domestic distribution, predicts. “The industry is poised for a strong fourth quarter. There’s a diverse slate for all audiences during Thanksgiving and the holiday season.”
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The blockbuster-hopefuls will be complemented by a slew of awards contenders and more modestly budgeted crowd-pleasers, such as “Bombshell,” “Cats,” and “Knives Out,” which could help close the gap in terms of revenues.
“As with every year, there is plenty of competition, but this year it feels like a good mix of offerings where audiences will take the opportunity to see more than one thing during the holidays,” says Cathleen Taff, Disney’s president of global distribution.
When 2020 rolls around, analysts believe the domestic box office will top out at $11.5 billion, a more than 3% drop from the $11.9 billion record set in 2018 but an impressive rebound from a year that sputtered out of the gate. During the first quarter, revenues were down 16%, leaving ticket sales hustling to make up lost ground.
“It’s a solid year,” says Eric Handler, an analyst with MKM Partners. “It’s the second largest ever, so it’s not fair to say, ‘Oh, my God, the box office is falling apart.’”
Handler blames a number of factors for the shortfall. He notes that Disney fielded so many blockbusters — from the most recent “Avengers” to the upcoming “Star Wars” and “Frozen” sequels — that other studios steered clear, holding their most promising releases for 2020 and beyond. In some instances, that meant that highly anticipated films such as “Wonder Woman 1984” that were supposed to debut in the fall were moved into the next calendar year, thus limiting the overall box office tally.
“If those movies came out this year, we might have been up or at least flat,” says Handler.
Though Disney remakes and “Avengers” sequels maintained a chokehold over the box office in 2019, studio executives are optimistic that audiences have a growing appetite for original fare.
“There are real signs that there is opportunity for movies that tell their cinematic narrative in a fresh way,” says Kyle Davies, Paramount’s president of domestic distribution. “When ‘Us,’ ‘Once Upon a Time in Hollywood,’ ‘Hustlers’ and ‘Rocketman’ are in the top 25, it tells you there is a hunger for original storytelling.”
A bright spot in recent weeks has been a resurgent independent box office, one in which edgier and more esoteric fare such as the World War II satire “Jojo Rabbit” and the Korean thriller “Parasite” have put up impressive grosses. That trend could continue as other Oscar bait such as “Little Women,” “1917” and “Uncut Gems” arrive in theaters.
“People love blockbusters and scary films — and they do make so much money — but once you’ve seen those, you want to see something else,” says Frank Rodriguez, president of distribution at Fox Searchlight.
Studios typically gripe about the blood sport that is the holiday season. It’s a time of year when everyone fights for screens and attention as they try to take advantage of the massive number of students who are out of school or people taking time off from work. These days the competition isn’t just from other blockbuster hopefuls, it’s also from an onslaught of streamers. Disney Plus launched to great fanfare this month, offering up a live-action version of “Lady and the Tramp” and the “Star Wars” spinoff series “The Mandalorian.” The coming months will see the debut of services from WarnerMedia and Comcast. Analysts and studio executives are divided about what that means for the future of exhibition.
“Disney Plus is going to carve out a huge audience,” predicts Jeff Bock, a box office analyst with Exhibitor Relations. “That’s going to continue to erode the box office until Hollywood can consistently bring its “A” game every time — and we know how difficult it is to make great movies.”
Others believe that streaming represents no more of an existential threat than the advent of television, home video, DVD or any of the other emerging entertainment forms that captured the public imagination without spelling the end of cinema.
“The theatrical experience has been declared dead many times,” suggests Jim Orr, head of distribution at Universal. “The rise in streaming is certainly worth paying attention to, but the communal experience will never go away. It’s the greatest presentation of the content — the way it’s meant to be seen.”
There is one piece of streaming content that may have adversely impacted box office results. Martin Scorsese’s epic mob story “The Irishman” has earned rapturous reviews and Oscar buzz, but because it’s a Netflix release, it’s being seen on only a few hundred screens instead of the thousands that would typically play such a hotly anticipated film. Netflix refuses to give theaters an exclusive three-month run for its movies, preferring to offer them on its platform within weeks of their debut. For that reason, major chains such as AMC and Regal declined to screen the film.
“That one had real commercial potential,” says Patrick Corcoran, chief communications officer of the National Assn. of Theatre Owners, an exhibition industry trade group. “They could have done some serious business with that movie.”
For the most part, exhibitors seem happy with the Christmas bounty to come. For Brock Bagby, executive VP of B&B Theatres, a family-run chain with 50 locations across the Midwest, this holiday season represents the culmination of a major push to position the company for a new generation of moviegoing. Over the past four years, B&B has replaced outdated seating with luxury recliners, added high-end menu items and offered new forms of exhibition such as multi-projector screens and 4D. It’s taken time and money, but Bagby says he thinks the next month and a half will prove all the hard work was worth it.
“It’s fitting,” says Bagby. “We’ve been preparing for this as a company. And just as our saga is coming to a close, so is the saga of the Skywalkers with the new ‘Star Wars.’ It’s kind of the culmination.”