Any red carpet premiere for a Marvel Studios movie is an over-the-top event, and the gala opening for “Shang-Chi and the Legend of the Ten Rings” on Monday night was no exception. Disney shut down Hollywood Blvd. in front of the El Capitan Theater, where throngs of costumed (and masked) fans crowded the sidewalks on either side, as stars Simu Liu and Awkwafina patiently walked down the (socially distanced) press line, talking up everything from how the film marks a milestone for Asian representation to its many elaborate and kinetic action scenes.
There was an unmistakable buzz of excitement in the air, but it was also tinged with something the MCU hasn’t had to confront in a decade: anxiety. When “Shang-Chi” opens on Sept. 3, it will be Marvel Studios’ first exclusive theatrical release in over two years, and for the first time since the earliest days of the studio — with rising COVID cases starting to trigger vaccine mandates — no one really knows how it will perform at the box office.
One need look no further than how Kevin Feige, Marvel’s chief creative officer, answered Variety‘s question on the “Shang-Chi” red carpet about Disney choosing a theatrical release for the film, rather than day-and-date in theaters and on Disney Plus Premier Access, like with Marvel’s “Black Widow” in July.
“I love making movies for people to see in a shared environment in a theater together,” he said with a smile, underlining the same point he’s reportedly made inside Disney’s C-suite offices. “To us, that’s what it’s about.”
After dutifully plugging Disney’s hybrid strategy — “The hybrid release, it can also be good; you want customers to have the choice” — Feige then poked fun at the industry consensus to halve the old 90-day theatrical window.
“I love how everybody’s talking about 45 days, this magic new number,” he said. “Here’s what I know: There’s an opening weekend and you can go see a movie, and that’s what I’m excited to do.”
For someone who two years ago opened three movies — “Captain Marvel,” “Avengers: Endgame” and “Spider-Man: Far From Home” — that collectively grossed over $5 billion in global box office returns, it’s telling that Feige felt compelled to urge audiences to see “Shang-Chi” on opening weekend. Because more than just about anyone, Feige knows what it means if they don’t.
Only a few years ago, lesser-known or outright obscure comic book characters — the Guardians of the Galaxy and Doctor Strange for Marvel, the Suicide Squad and Shazam for DC — could still headline their own movies and pull in an ample fortune. But since the DC adaptation “Birds of Prey (and the Fantabulous Emancipation of One Harley Quinn)” with Margot Robbie flopped in Feb. 2020, the box office power of superhero cinema has evaporated as if snapped away by Thanos’ fingers.
Obviously, COVID-19 is the main villain here, and its impact has been indiscriminate across the entire film industry. But for Marvel — which in May released an emotional, three-minute tribute to the power of seeing the movies in a theater, including footage of crowds cheering during “Endgame” — the impact has been especially unsparing, delaying a year’s worth of interconnected features and Disney Plus series that are locked into a specific release order. When “Black Widow” finally did open in July, it swiftly became the best performing movie of the pandemic era. But that’s only relatively speaking. If the film’s current trajectory holds, it will also be the first MCU movie since 2015's "Ant-Man" to make less than $200 million at the domestic box office, and it could be the first to make under $500 million worldwide since 2011's "Captain America: The First Avenger" and "Thor."
To be fair, there is a degree to which "Black Widow's" box office performance was expected, even before the pandemic.
"What Marvel did with the buildup to 'Avengers' is one of those things that is going to be very difficult to be repeated — even for Marvel," says Jeff Bock, industry analyst with Exhibitor Relations. He likens the MCU's 2021 feature slate of "Black Widow," "Shang-Chi" and "Eternals" to a kind of box office reset, sending the MCU back to its earliest days. "So, we have to think in terms of the expectations for 'Iron Man' or even 'Captain America' or 'Thor.'"
But while "Black Widow's" $158 million global debut — matched with $60 million via Premier Access, according to the studio — remains a pandemic-era record, the film dropped 69% at the domestic box office in its second weekend, almost certainly thanks to its day-and-date release. That provoked a sharp rebuke from the National Association of Theater Owners, which asserted that the movie would have made far more had it opened in theaters exclusively — a belief shared by star Scarlett Johansson, who remains locked in a lawsuit with Disney over lost backend earnings on the film. Moreover, NATO argued that whatever "Black Widow” has made on Premier Access is effectively an advance on traditional post-theatrical revenues — winnowing the movie's downstream earnings potential further. (Disney has declined to release subsequent VOD revenue figures for "Black Widow.")
It should be no surprise that “Black Widow’s” performance has been so contentious. While box office has suffered across the board, the theatrical health of superhero movies — especially Marvel’s, which are true four quadrant blockbusters — is of particular importance to exhibitors given how dominant the genre has been in the marketplace for so long. With the theatrical business as precariously positioned as it’s ever been, if studios taper down the biggest commercial draw for theaters, it could further weaken the entire sector.
Since "Black Widow," the box office landscape itself has only grown dimmer, typified by "The Suicide Squad" — which debuted day-and-date on HBO Max — opening with just $26.2 million domestically, compared with the $133.7 million opening weekend of its 2016 predecessor, "Suicide Squad." Similar to “Black Widow,” in its second weekend, “The Suicide Squad” dropped a sharp 72%. Some of the financial fallout here can be blamed on the surge in delta variant COVID cases predominantly among the unvaccinated, which has further depressed consumer confidence in public venues. But that isn't the only reason.
"You don't go from $133 million to $26 million — there's other factors at play than the pandemic," Bock says. He points to title confusion, the film's R-rating and explicit violence, and — especially — a cast lacking any A-list DC characters (all due respect to Harley Quinn) as other major culprits. "I just think we've come to that saturation point where audiences are sort of tired of these superheroes films, especially if they're superheroes that they've never heard of."
The marketplace is certainly saturated with superhero content like never before, in no small part due to streaming; by the end of 2021, Marvel Studios alone is set to have released four features and six series on Disney Plus, with at least another 19 titles in play for 2022 and beyond. Warner Bros. and Sony Pictures are similarly bullish on superheroes, proliferating their feature and streaming slates with comic book titles — many of them with characters that, indeed, many have never heard of, like "Morbius" and "Kraven the Hunter" for Sony Pictures and "Black Adam" and "Blue Beetle" for Warner Bros. and New Line.
All three studios also have A-list superhero titles in their immediate pipelines — "Spider-Man: No Way Home" for Sony, "The Batman" for Warner Bros., and "Thor: Love and Thunder" and "Black Panther: Wakanda Forever" for Marvel Studios. But even if those movies are enormous blockbusters, the broader theatrical outlook for superhero movies is far from clear. Sony, which has no streaming service, remains committed to an exclusive theatrical release in December for "No Way Home," which promises to be one of the highest grossing films of the year; but the studio also pushed "Venom: Let There Be Carnage" from September to October due to COVID concerns. Warner Bros. has committed to a 45-day window for its major features starting in 2022, but the studio has already slated lesser-known titles its developing — like "Blue Beetle," the first major superhero film with a Latino lead character — to premiere instead on HBO Max.
Disney, meanwhile, remains contractually bound to give 20th Century Studios movies (like "Free Guy" and "West Side Story") exclusive theatrical runs until the expiration in early 2022 of a 10-year output deal with HBO. Otherwise, the studio has not yet officially committed to exclusive theatrical runs for its movies beyond "Shang-Chi."
That puts Marvel’s latest film in a unique — and, perhaps, impossible — position of serving as a bellwether for the theatrical future of superhero cinema.
Disney declined to comment on the record for this story, but insiders say that when the studio announced in May that it was opening “Shang-Chi” exclusively in theaters over Labor Day weekend, it was with the belief that the pandemic was finally waning and “Shang-Chi” would be the company’s first salvo in helping get the theatrical business back to health.
Then the delta variant hit. In an earnings call in August, Disney CEO Bob Chapek characterized "Shang-Chi" as “an interesting experiment” that will help guide future exhibition strategy, by way of defending his decision not to put the movie on Premier Access — a format Chapek otherwise lauded for helping to provide the studio with flexibility and drive subscribers to Disney Plus.
When considering the ever-bleaker pandemic theatrical landscape, coupled with the fact that Labor Day weekend has historically been one of the lowest grossing weekends of the year, Bock says he doesn’t see how “Shang-Chi” could possibly perform well enough for Disney to justify not returning to a day-and-date model for Marvel Studios' films.
"Obviously, Disney wants it to be a huge success, but in terms of what audiences want, I just don't personally see the numbers," he says. "From what I think we all heard from the brass at Disney, they're going to continue to play what works best for Disney after 'Shang-Chi.' I think they're going to continue to go with [Premier Access] until the pandemic is eradicated — and even then, I don't know that they will completely change."
Insiders counter that Marvel has had great success with non-traditional weekends for films like “Black Panther” (which opened in February) and “Captain Marvel” (which opened in March), and the studio remains committed to maximizing "Shang-Chi's" box office success.
“If any brand can do well over Labor Day, it's Marvel,” says one source with direct knowledge of Disney’s strategy.
As for Marvel's next feature, "Eternals" from Oscar-winning director Chloé Zhao, insiders say the studio is committed to a theatrical release in November, but, as with every feature title, decisions will be made about whether the film will also debut on Premier Access based on up-to-date market conditions and the status of the pandemic. Whatever call the studio makes, it will likely have to happen around early September — right when "Shang-Chi" debuts in theaters.
At the "Shang-Chi" premiere, Variety also asked Feige about whether "Eternals" will be released day-and-date on Disney Plus Premier Access, or in theaters alone.
"Uh, I think a theater would be my preference and Chloé’s preference," Feige said, before gesturing to the cinema about to unspool "Shang-Chi." "We will see where we go with it."
Angelique Jackson contributed to this report.