Early Friday morning, the third biggest cinema chain in North America, Cinemark Theatres, announced its quarterly earnings, which included a significant surprise. After years of movie theater owners and exhibitors reporting grim news, the fiscal quarter that ran between July and October turned out to be something of a reversal: Cinemark saw not only its best Q3 since the pandemic… but also since before the pandemic started.
As per Cinemark’s press release, the Texas-based theater chain witnessed box office revenue rise 35 percent over the same frame in 2022 and a remarkable six percent over its 2019 counterpoint. Additionally, July 2023 marked the best July Cinemark has ever recorded. And all this occurred while studios and streaming services have let an actors strike that began in the summer drag into November.
This is a noticeable win for one movie theater chain, but also the exhibition industry as a whole. While mask mandates and social distancing restrictions began to slowly relax in mid-to-late 2021, the actual habit of moviegoing remained frustratingly depressed as filmgoers stayed reticent (or ambivalent) about returning to the cinema. There’s of course been growth year on year since 2021, with occasional feel-good stories such as Tom Cruise and Top Gun: Maverick “saving cinema” when it performed like the 1990s never died in summer 2022, but actual ticket revenue remained consistently down from 2019.
Even Disney, which made 2019 a banner year by having multiple Marvel films, animated sequels, live-action remakes, and a Star Wars flick all cross $1 billion, has struggled in the post-pandemic era where only one Marvel movie to date, Spider-Man: No Way Home, has crossed the $1 billion benchmark. As a consequence, a persistent idea has been circulated incessantly in the industry, press, and on social media: moviegoing is dying, movie theaters are dying, and the future will be a great streaming singularity.
Yet looking at what is admittedly a single tea leaf for a single North American theater chain, it would seem that cinema is not so much dying as the old, pre-pandemic conventional studio logic is.
The films that carried Cinemark and all other Western movie houses in Q3 are so obvious they barely need mentioning: Greta Gerwig’s Barbie; Christopher Nolan’s Oppenheimer; and Taylor Swift’s The Eras Tour concert film. The first two of these movies shattered expectations in July when they opened on the same day, collectively grossing almost $2.4 billion and becoming the first and third biggest movies of the year, respectively. Swift’s concert film, meanwhile, had the second biggest October opening weekend ever, grossing $92.8 million in its first three days, and more impressively was able to split that and all subsequent revenues exclusively with movie theaters—Swift and AMC Theatres made a deal that cut the studios out, with AMC acting as distributor for Eras.
The result was clearly an over-performing Q3, and one which seems to suggest reports of cinema’s demise have been greatly exaggerated.
In truth, cinemagoing has been on a slow but improving trajectory for this entire year. The first quarter of 2023, for instance, was an improvement over 2022 despite being down 25 percent from Q1 2019. However, the number of films released by major studios in 2023 were 25 percent fewer than they were in 2019. Which is to say, the studios’ own diminished output foretold their continued diminished theatrical grosses.
The reason for the smaller output of releases is because studios continue to consolidate resources while pouring budgets into ever pricier but supposedly risk-free tentpoles based on popular, well-worn IP. Yet a funny thing happened in Q1: The supposed sure-things like superhero movies Ant-Man and the Wasp: Quantumania and Shazam! Fury of the Gods either flopped or severely underperformed. The movies that turned a profit for studios and seemed to leave an impression on the zeitgeist were actually a lot of middle-budget genre films, most of them based on original concepts: M3GAN, Cocaine Bear, Scream VI. The biggest IP movie of the spring, meanwhile, was the first film in its series, The Super Mario Bros. Movie, as opposed to the eighth or ninth.
Summer 2023 merely heightened this phenomenon with the two biggest films of the year being auteur-driven spectacles. The bigger of the two is based on a global brand, Barbie, but Gerwig’s approach to the material would hardly be called playing it safe. She even apparently had to fight for the now Meme-ified “I’m Just Ken” musical number. Conversely, Oppenheimer was a three-hour, R-rated adult drama about the creation of a genocidal weapon and it was marketed not as a niche awards darling but as an event film adults needed to see in the summer. And it played a lot better than the all-ages-friendly 10th Fast & Furious film, fifth Indiana Jones picture, and seventh Mission: Impossible flick.
Similarly, Taylor Swift’s concert film was the undisputed cinematic event of October, with the film’s surprise announcement earlier this year causing Universal and Blumhouse to move their Exorcist reboot off a Friday the 13th release date. However, it wasn’t the only major box office win for exhibitors last month. In fact, while The Exorcist: Believer still performed solidly for Universal and Blumhouse (at least if you ignore how much the studio paid to buy the rights to the franchise), the far bigger Halloween genre picture was Five Nights at Freddy’s, which opened last weekend at numbers bigger than the same studio and production house’s Halloween reboot in the pre-pandemic “good old days.” While based on a video game property, Freddy’s is also the first movie in a franchise instead of the fifth or sixth like The Exorcist, which has two alternative versions of the same prequel film.
Meanwhile it should also be noted that Martin Scorsese’s epic and brooding Killers of the Flower Moon also performed well in the shadow of Swift and Freddy. While nowhere near the blockbuster status of Oppenheimer, Flower Moon still crossed $100 million after its first two weeks, which is remarkable for a movie that is an immense three and a half hours in length and which features a somber, novelistic pacing. It can also ironically work as something of a loss leader for Apple TV+, which produced the picture (Paramount distributed it) ahead of its streaming release.
This is similar to Amazon’s release of Ben Affleck’s more conventional two-hour dramedy about the creation of Air Jordans, Air, which targeted an adult audience in April when it grossed $90 million at the global box office. Notably that film was released by Amazon after the tech giant paid a reported $70 to $90 million to produce it. However, that included a sunken cost so Amazon would not have to give the talent any backend deals (which likely multiplied the budget by two or three times), and still acted as a splashy marketing tool for Air’s eventual streaming release on Amazon while also making movie exhibitors money.
Perhaps that’s why Cinemark CEO Sean Gamble told investors today that both Apple and Amazon “are very pleased” with their big forays into theatrical distribution in 2023.
The point to all of these numbers is that movie theaters aren’t dying. It’s just the movies that are really working for the distributors, not to mention audiences, appear to be changing. A week out from what might be the second Marvel Studios superhero movie in 2023 to underperform, there is a growing anxiety within the industry that the superhero formula which underwrote the 2010s, including Disney’s banner year in 2019, is losing its appeal. That seems to be a primary reason Variety ran a damning report Wednesday with a sensational title: “Crisis at Marvel.”
However, just because Marvel’s 33rd film is tracking poorly, or the fifth Indiana Jones movie with an 80-year-old Harrison Ford couldn’t justify its nearly $300 million budget, doesn’t mean moviegoing is dead. Audiences, in fact, returned in droves during these past three months, just not for the type of movies the industry has been betting on for a long time: Original concepts, new IP, and films aimed at adults. In fact, one wonders if 2023 might look even better if studios hadn’t moved so many films out of the third and fourth fiscal quarters because they spent months away from the negotiating table with SAG-AFTRA and the WGA. Keep in mind Dune: Part Two was supposed to open today until Warners moved it in August—a month when the studios’ AMPTP wasn’t even talking to SAG-AFTRA.
It seems audiences still like going to the movies; studios may just want to rethink what it is audiences want to see when they get there.