“Avatar: the Way of Water” walked away empty-handed from the Golden Globes this week, but it continues to rain gold on James Cameron’s sci-fi epic where it truly matters: the cinema box office. The film is approaching the global USD $2 billion mark and is now the fifth-biggest International release of all time, meaning that Cameron’s films occupy three of the top five slots of highest grossing releases ever. It might now seem pre-ordained for James Cameron to once more be crowned King of the Cinema world, but that was not the universal sentiment prior to the film’s release.
There was much talk that too much time had elapsed since the first film for the sequel to work, never mind that “Top Gun Maverick” had been in gestation more than twice as long. There was pontification that the original “Avatar” had not left a significant enough imprint on popular culture to matter, despite having its own world in Disney theme parks. There were anecdotal stories about children of cinema industry insiders in their late teens, who were not interested in attending the red carpet opening, because it would mean having to put aside their smartphones and focus on the big screen instead of TikTok for three hours. The film did not generate as many memes, online clips or social media “buzz” as “Glass Onion” or even “M3gan.” There were those who said that the novelty of 3D had worn off a long time ago and that films like “The Hobbit” proved cinema audiences did not have an appetite for frame rates higher than good ole’ 24. Then there was the narrative that Covid and streaming had hastened the death of cinema. (To spare blushes we won’t name or link to the sources of any of the above sentiments.)
In the end a lot of people all over the world went to see “Avatar: The Way of Water” and they keep coming to the multiplex week after week. The “Avatar” sequel has been running for over a month and it is still pulling in big numbers while showing less week-on-week decline than other major blockbusters. The second “Avatar” film is already the highest grossing Hollywood film of all time in India. It would probably already have passed the two billion dollar mark, had it not been that Russia is only showing a pirated version of the film, while the infection wave sweeping China following the reversal of the Zero Covid policy means that the film has under-performed, compared to pre-release predictions. There is also the strong dollar, which means that overseas earnings count for less on a per-ticket basis than domestic admissions. At this stage it doesn’t matter whether the sequel will be the fourth or second biggest global release of all time. Why? Because what matters is that there will be more Avatars.
James Cameron cleverly downplayed expectations ahead of the “Avatar 2” release, knowing full well that hoping to hit a hat trick of three #1 films of all time in a row would be hubris to rival that of most Greek heroes. Having spent over a decade working on the follow-up to Avatar, Cameron was playing the long game; knowing that all he needed was for the second film to make enough money to green-light the third, fourth and fifth Avatars. For anyone who thinks that Disney was always going to do this, look at the time it took for Warner Bros to approve the second part of Denis Villeneuve “Dune” saga. Read this interview/talk between the two directors and note how Cameron praises “Dune” for being “epic” in a way that Marvel films are not. Cameron must have been quietly observing and taking notes as Warner Bros. left Villeneuve dangling during last year’s awards season as to whether his fellow Canadian would be allowed to complete his vision.
In interviews Cameron said that “Avatar: the Way of Water” would need to earn USD $1.4 billion to break even, though in truth the film was probably in profit well before then, even if it cost USD $250 million to make and an equal amount to market. The costs for the rest of the “Avatar” saga are also likely to have been front-loaded into the first film, in terms of research ad development and more. There is an old joke that the first copy of Microsoft Windows 98 (ask your parents what that is) cost in the region of USD $100 million to make, but that the second copy cost $5. The “Avatar” sequels will not be as cheap, but a similar principle applies and we will not have to wait over a decade for them.
Cameron will probably spend the rest of his life on Pandora, possibly doing some more documentaries and maybe even handing over the reins at some point. He has said himself that he is not worried where in the all-time ranking the second Avatar will end up. “I’m not thinking of it in those terms,” Cameron recently told Variety “I’m thinking of it in the terms of we’re going back to theaters around the world. They’re even going back to theaters in China where they’re having this big Covid surge. We’re saying as a society, ‘We need this! We need to go to theaters.’ Enough with the streaming already! I’m tired of sitting on my ass.”
As well as being happy to see people flock back to the cinema, Cameron must be pleased that he will get to complete his vision. While it is unlikely that “Avatar: the Way of Water” will pick up golden statuettes for anything other than technical categories at the upcoming Academy Awards, let’s remember that it was not until the third “Lord of the Rings” films that Peter Jackson got the Oscar for Best Film. In the meantime AMPAS should consider giving Cameron an Oscar for Best Defying of Nay-Sayers.
By the way, if you want to learn more about the current state of the cinema industry in China, be sure to join our upcoming CJ Cinema Summit next week when we speak with Lawrence Wang of Vista China.
Piracy
Russia Set to Sanction Illegal Screening of Hollywood Films
The Russian parliament (Duma) has put forward a proposal for the “compulsory licensing of foreign films.” Since Russia’s invasion of Ukraine in February of last year, Hollywood studios have stopped distributing films in Russia. This means that only illegally obtained copies of films such as “The Batman” and “Avatar: the Shape of Water” have been screened in some cinemas. The bigger cinema chains have avoided trampling on international copyright law, but the proposed law would enable them to screen Hollywood blockbusters without violating domestic Russian copyright law.
The proposal was unveiled on 9 January by Anton Gorelkin, deputy head of the State Duma Committee on Information Policy, on his Telegram channel. Under the proposal cinemas would still need to set aside money from the box office for rights holders. However, this would only be paid if and when such distributors resume business relationships with Russia. The rights holders would also not have a say in the revenue share split or the terms under which the films are shown.
A similar proposal was put forward in August of 2022, when bill No. 184016-8 was submitted for consideration by the State Duma, but was withdrawn due to lack of feedback from the Supreme Court and the government. There was fear at the time that such a proposal would harm Russian streaming platforms. The current proposal narrows down the scope to only include cinema screenings of “compulsory licensed” films. Separately, “[t]he deputy of the State Duma of the Russian Federation, Dmytro Gusev, proposed to mark ‘traitor actors’ in films with yellow stars with a special die – like ‘foreign agents’.”
Source: Celluloid Junkie
Box Office
China’s Box Office Down 36% in 2022
China has lost its position as the world’s leading box office territory, following a collapse of its cinema market by 36% in the past year. Data by Maoyan Research Institute found that China’s cinema market was CNY 30 billion (USD $4.4 billion) in 2022, which represents a drop of 36.4% on the previous year. This comes after box office in China grew for two consecutive years. This means that 2022 was down 53.2% on the pre-pandemic 2019 year. China was the world’s largest box office territory in 2020 and 2021, after having reopened its cinemas faster than the rest of the world under the country’s previous Zero Covid policy, now abandoned.
Compared to 2020 – when cinema operations were brought to a complete standstill for 178 days – more than half of all cinemas were closed for 46 days in 2022. The operating rate for cinemas fell below 50% from March 21 to April 22 and below 40% from November 24-30. The number of cinemas reached 12,123 of which 54% earned between $146,000 and $731,000 (RMB1-5m) in annual ticket sales while 33.3% earned below $146,000 (RMB1m).
Screen Daily
Several key metrics were flipped in 2022. Average screen attendance fell to 8.6 in 2020-2022 compared to a three-year average of 15.3 in 2017-2019. Average ticket price was CNY 40.1 (USD $5.86) in the period 2020-2022, compared to CNY 35.7 (USD $5.21) for the three-year average of 2017-2019. Cinema opening rate rose to over 70% by the time “Avatar: the Way of Water” opened and the film has grossed CNY 953 million (USD $139.4 million), falling short of prediction between 1.5 and 2 billion CNY. This was because the wave of Covid infections, following the lifting of the Zero Covid policy, kept people from going to cinemas.
Apart from “Avatar 2” the only other Hollywood title to reach the Top 10 of 222 was “Jurassic World: Dominion”, with many Hollywood titles such as “Top Gun Maverick” denied a release permit. China’s top three titles of 2022 were war drama “The Battle at Lake Changjin 2” (CNY 4.07 billion or USD $594.75 million), sci-fi comedy “Moon Man” (CNY 3.1 billion / USD $453.6 million) and comedy “Too Cool To Kill” (CNY 2.7 billion or USD $390 million). Together these three films alone accounted for a combined 32.5% market share of the total Chinese box office in 2022. Ahead of this year’s all-important Spring Festival season, when only Chinese films are released, both “Avatar: the Way of Water” and “Puss in Boots: the Last Wish” were granted extensions to their 30-day window.
Source: ScreenDaily
Exhibitors
India’s PVR Crosses 900 Screens as INOX Merger is Approved
India’s largest cinema chain PVR Cinemas has crossed 900 screens with the opening of three new multiplexes in Bengaluru, Jaipur and Gurugram this past Monday, with a total of 19 new screens. The announcement comes on the eve of PVR’s merger with India’s second largest multiplex operator INOX Leisure, which was approved by the Mumbai bench of the National Company Law Tribunal (NCLT) 13 January.
In total PVR Cinemas operates 903 screens at 181 properties in 78 cities across India and Sri Lanka. The company has been expanding in Southern India, which accounts for 40% to 45% of the organization’s revenue. Around 10% of PVR’s new screens opened this financial year are premium or luxury. The company plans to have opened a total of 100 news screens by the end of the financial year 2023. The new multiplexes will open in Chennai, Lucknow, Ahmedabad and Bhubaneswar.
With the opening of the 3 new properties on a single day, we have now added 63 screens in the current fiscal. This expansion is in-line with our overall commitment of opening about 100 screens by FY 2023-end. We have a strong pipeline of screens in various stages of fitments and expect to add another 35-40 screens by the end of this quarter. This will help us strengthen our presence in existing markets and also open properties in new cities.
Sanjeev Kumar Bijli, Joint Managing Director, PVR
Indian box office revenue currently stands at 80% of pre-pandemic levels. It is expected that a full recovery is possible either this quarter or in the first quarter of the new financial year (i.e. after 1 April). PVR will invest INR 100 crore (USD $12.25 million) to build the next 100 screens, of which 30 will come up this quarter. The company will have a particular focus on newer cities, especially in the south and east parts of India, where PVR currently has a negligible presence. PVR has ruled out further international expansion, beyond the nine screens it operates in Sri Lanka, to focus on the domestic market. Post-merger the unified PVR-INOX will have over 1,600 screens.
Source: The Hindu Business Line
Box Office
Saudi Arabia Has A New Local Box Office Champ
One of the big hits at the Red Sea International Film Festival in Jeddah, Saudi Arabia back in December was a local film titled “Sattar.” In its first 12 days in release, the comedy action film, set in the world of freestyle wrestling, has broken box office records for a home grown production, grossing USD $2.2 million on 159,000 admissions. That makes it the highest grossing local film since 2017, when the country lifted its 35-year ban on movie theatres.
Opening 29 December, “Sattar” managed to bump “Avatar: The Way of Water” out of the top spot in the territory during its first weekend in theatres, attracting 40% of admissions and 32% of gross. The disparity is probably due to the higher 3D ticket prices for the “Avatar” sequel. The previous record holder, “Born A King,” was released theatrically in 2020 and garnered 151,000 admissions.
It has been estimated the Saudi market will eventually bring in USD $1 billion in box office per year. To get there the country will need more local titles such as “Sattar.” Billed as a family comedy, the movie stars the Saudi comedian Ibrah Al Hajjaj. It was produced by AlShimaisi Films, the production arm of Saudi’s Tefaz11, as well as Muvi Studios, the film production division of Muvi Cinemas, one of Saudi’s leading exhibitors. Front Row Filmed Entertainment is distributing “Sattar.”
Source: Variety
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