Grab an extra-large popcorn and take a seat. The movies are back, baby.
Yes, really. Three years after Covid first began putting intense downward pressure on the business proposition of releasing movies in theaters, there is optimism that this summer’s box office, flush with releases like Mission: Impossible — Dead Reckoning Part One, Barbie, and Fast X, will bring theatergoers—and ticket revenues—back in full force.
And as movies come back to theaters, there are other businesses that stand to benefit, whether that’s studio advertising spend or in-theater advertising. Streaming services that have the rights to stream other films within a franchise could also see a boost, as people may watch those earlier movies before seeing the newest installment in theaters.
“Everybody feels like the industry is kind of coming back to life,” Geetha Ranganathan, a senior media analyst at Bloomberg Intelligence, told Marketing Brew.
Signs of life
The summer box office is crucial for studios and movie theaters. Sales during the summer season—usually defined as the 18 weeks starting the first Friday in May and ending on Labor Day—normally account for an average of 40% of the year’s total in the US and Canada, Paul Dergarabedian, a senior media analyst at Comscore, told Marketing Brew.
This year, there are lots of movies to choose from. There will be 42 wide movie releases this summer, nearly double the 22 films released in the same timeframe a year ago, plus even more limited-release titles. Early-summer releases like Guardians of the Galaxy Vol. 3, The Little Mermaid, and Spider-Man: Across the Spider-Verse have delivered solid box-office results, and big-name titles like Christopher Nolan’s Oppenheimer, DC Comics’s The Flash, and Indiana Jones and the Dial of Destiny are rolling out throughout the summer.
“There’s not really a weekend that you can point to and say there’s not a blockbuster or a potential blockbuster there,” Dergarabedian said. “This is very good news for theaters. Momentum is everything.”
The magic number
The optimism—dare we say confidence?—is a stark change from a few years ago, when Covid prompted theater shutdowns and straight-to-streaming film releases. Even as people began returning to their usual activities, the movie business remained somewhat stunted, in part due to fewer film releases: Last year, according to data from Comscore, the summer box office grossed $3.4 billion, nearly $1 billion less than the $4.3 billion box office of summer 2019—the last summer before the pandemic.
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This year, industry analysts are keeping an eye out to see whether this summer’s movie revenues can clear $4 billion, which Ranganathan and Dergarabedian both said would help them gauge whether or not 2023 could finally mark the movie industry’s return to normal.
“If we get to the $4 billion mark, that puts us on track for this recovery,” Ranganathan said. In theory, she added, reaching that figure “gives us that sense of relief or a sense of optimism that yes, we can definitely go back to pre-pandemic times.”
There could be some challenges to reaching that number, including the fact that many films coming out this summer are franchise films, which can have less robust showings than prior installments. Take Guardians of the Galaxy Vol. 3 and Fast X, which have so far underperformed previous titles.
“The later installments in the franchise typically don’t tend to do as well as some of the prior ones,” Ranganathan said.
Rising tides
The return of the movie business isn’t just about selling tickets and popcorn. Whether it’s in-theater advertising or ads promoting upcoming films, other businesses stand to get a boost from a summer of robust blockbusters.
For instance, ScreenVision Media, which sells in-theater advertising, told advertisers at its upfront presentation earlier this year that the 2023 box office in total is expected to be within 5% of 2019’s results while pitching its ad network; in-theater ads, the company claimed, can deliver higher attention and viewability than other video ad formats.
And ad spend on films this year is off to a strong start. From the beginning of the year through June 4, around $530.3 million in estimated media value was devoted to advertising upcoming theatrical releases, according to data from iSpot; that’s more than half of the estimated $1.01 billion in estimated media value throughout all of 2022.
Even outside of the ad world, the businesses of concessions, and restaurant and shopping options in the vicinity of theaters, may also benefit as theatergoers return.
“Moviegoing has a halo effect,” Dergarabedian said.