Whenever one of our CJ Marquee editorials causes a stir with our readers it’s usually pretty easy to tell based on how many email responses arrive in the days that follow. What’s unprecedented however is to have a reader address a writer in real life to provide their thoughts on the latest editorial. Yet after last week’s column about how the dual Writers Guild of America and SAG-AFTRA strike will affect the cinema business, that is exactly what happened. As the Marquee got forwarded to non-subscribers the number of emails piled up until mid-week I was approached by a screenwriter (and WGA member) while making my way through the produce section of my local grocery store.
I’m still not sure how she recognized me, and though flattering, she conveyed the same message as most of the email comments you sent; the WGA and SAG-AFTRA strike will not end by October as I predicted last week’s newsletter. In retrospect I should have been more clear in saying that I was outlining a best-case scenario wherein October was rather optimistic. My overall point was the longer the strikes last, the more they will impact the movie theater operators as studios and distributors begin delaying this year’s releases to 2024. No sooner had we sent last week’s newsletter did Sony Pictures and A24 announce revised release schedules, postponing a number of this autumn’s major titles.
In regards to my hypothesis that C-suite executives will get tired of telling Wall Street they aren’t hitting their numbers for two quarters in a row because of work stoppages, earnings reports can cut both ways, as we learned this week when Warner Bros. Discovery announced their second quarter 2023 results. Despite advertising revenue on a downward trend and despite losing 1.8 million global subscribers to Max, the company’s relaunched streaming service… WBD’s stock price rose after their earnings call. Why? Well, Max may be losing money, but the production shut down caused by the writer’s strike saved the media giant USD $100 million in May and June alone.
In other words, members of the Alliance of Motion Picture and Television Producers (AMPTP) against whome the WGA and SAG-AFTRA are striking will be able to boost their balance sheets with reduced production spending in the short term. They won’t have to address the inevitable revenue decline that comes with a lack of new television shows and movies until the first or second quarter of next year. WBD however is being even more Pollyannaish than I was last week, telling financial analysts they planned for the strike to wrap up in September. Apparently SAG-AFTRA President (and actress) Fran Drescher didn’t get the memo on that since during an interview earlier this week she said, “We have financially prepared ourselves for the next six months. And we’re really in it to win it.”
A six month strike would upend theatrical release schedules not only this year, but well into 2024. With that potentially bleak future sketched out, let’s turn to some factual good news for our industry. In July, the global theatrical film industry turned to the live concert and sports markets, which have been posting record attendance this year, and said, “Hold my beer.”
Thanks to Gower Street Analytics we know that global box office reached an estimated USD $4.54 billion in July of 2023, making it the single highest-grossing month since before the pandemic began. That’s pretty astonishing when you consider we’ve had billion dollar earners over the past two years like “Spider-Man: No Way Home,” “Top Gun: Maverick,” “Avatar: The Way of Water” and “The Super Mario Bros. Movie,” but didn’t have the sheer volume of tentpole releases hit theatres in a single month. Besides “Barbie” and “Oppenheimer” there was “Mission: Impossible – Dead Reckoning Part One” and holdover business from “Indian Jones and the Dial of Destiny.” Then there were successful local productions like “Never Say Never” in China and surprise indie hits such as “Sound of Freedom” in North America.
AMC had it’s best admissions revenue week in company history during July and domestic box office alone made it Cinemark’s highest grossing month ever. Both Harkins Theatres in the United States and Omniplex Cinemas in Ireland entertained over half a million patrons during the initial days of the Barbenheimer phenomenon. So many records were being broken in July that we had trouble keeping up with all the press releases and news stories about revenue and attendance milestones being surpassed.
Meanwhile, thanks in large part to Christopher Nolan’s “Oppenheimer,” IMAX also smashed some of its own corporate records, banking USD $176.2 million at the global box office during July, making it the company’s highest grossing July in history. IMAX has extended the global run of “Oppenheimer” an additional week, through 17 August. Indeed, tickets to 70mm screenings of “Oppenheimer” are sold out through August and are harder to come by than seats to a Taylor Swift concert.
While the release schedule in August may not be as robust, there is sure to be some spillover from July. Hopefully there will also be a few surprise hits that carry the industry into September, when we’ll know more about the effect the strikes will have on upcoming titles. As theatrical exhibition and distribution continues to recover from the pandemic, it would be a shame to lose the momentum that the market fought so hard to achieve in July.
Finally, and certainly not least, we’d like to congratulation our co-founder and former editor, Patrick von Sychowski, on starting his new role at CinemaNext as the exhibition services company’s Digital Marketing & Communications Manager.
Box Office
Global Box Office Surpasses Pre-Pandemic Levels in July
Gower Street Analytics estimates the global box office reached USD $4.54 billion in July of 2023, making it the highest-grossing month since before the pandemic began. This represents a significant growth of +17% compared to the average July earnings of the pre-pandemic years from 2017 to 2019. For the first time since the pandemic began in 2020, all three key markets that make up the global box office (Domestic, China, and International excluding China) tracked ahead of their pre-pandemic averages.
July’s success was driven, in part, by Warner Bros. “Barbie” and Universal Pictures “Oppenheimer” which contributed an estimated USD $1.23 billion (27%) of the global box office for the month. The cumulative annual global box office through 31 July is approximately USD $20.95 billion, less than 2% behind the full 12-month result of 2021 and tracking -11% behind the 2017-2019 average.
These global figures are +31% ahead of the results in 2022 at the end of July with some international markets even out-performing their pre-pandemic July averages: UK/Ireland (+18%), France (+14%), Germany (+35%), Spain (+14%), Italy (+98%), Australia (+13%), Brazil (+5%). China’s box office total for 2023 (estimated at $4.8 billion) has already surpassed its full-year 2022 total.
Source: Celluloid Junkie
Distributors
Strikes Force Sony Pictures to Delay Theatrical Releases
Even before SAG-AFTRA went on strike Hollywood studios were facing challenges with ongoing movie production due to the Writers Guild of America work stoppage. With unionized actors having walked out after their contract ended in July, Hollywood studios began removing several big-budget movies from the 2023 release calendar. Sony Pictures Entertainment is the latest studio to do so, delaying the release of at least two major films, “Kraven the Hunter” and the “Ghostbusters: Afterlife” sequel, along with some 2024 releases like “Spider-Man: Beyond the Spider-Verse” and a new “Karate Kid” movie.
Other studios, including Warner Bros., are also considering postponing their upcoming releases. The strike is impacting the promotion of completed films, as the actors’ union has banned its members from participating in any publicity efforts for projects being marketed by members of the Alliance of Motion Picture and Television Producers (AMPTP).
Though the strike by SAG-AFTRA, the actors’ union, is primarily focused on better pay from streaming services and protections related to artificial intelligence, the current lack of stars available for promotional activities forced studios rethink their release strategies for the remainder of 2023. The situation is complicated by the uncertainty of the strike’s duration, which could potentially affect the 2024 release calendar as well. Sony has already adjusted its 2024 slate, but some movies, like “Spider-Man: Beyond the Spider-Verse,” remain without a new release date. As studios and movie theatres have already learned, a steady supply of new theatrical releasees is required to facilitate the industry’s recovery from the COVID-19 pandemic.
Source: New York Times
Exhibitors
Cineworld Exits Bankruptcy With Stronger Balance Sheet and New Board
Cineworld Group, not to mention its new and aptly named parent company New Cineworld, successfully wrapped up its financial restructuring process and emerged from its Chapter 11 cases in United States Bankruptcy Court. The company cleaned up its balance sheet by reducing indebtedness by about USD $4.53 billion, raising approximately USD $800 million in new equity capital, and securing new debt financing of approximately USD $1.71 billion.
Cineworld has appointed a Board of Directors filled with business veterans that have expertise in finance, entertainment, corporate governance, and customer engagement. As previously reported the board will be led by Chairperson Eric Foss and Eduardo Acuna, a longtime Cinépolis senior leader, will become CEO.
Cineworld remains the world’s second largest cinema chain operating brands including Regal, Cinema City, Picturehouse, and Planet in the United Kingdom, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania, Israel and the United States. Cineworld Group plc, the previous parent company, has ceased to hold any interest in the group following the emergence from Chapter 11 cases. The cancellation of Cineworld Group plc’s listing on the London Stock Exchange and trading of its shares on the market for listed securities took place on 1 August.
Source: Celluloid Junkie
Film Festivals
Sundance Unveils Plans for 2024 Festival
After two successful years of online screenings at a virtual festival forced by the pandemic, the Sundance Film Festival is shifting a bit to prioritize the in-person experience for its 2024 edition. The new Festival Director and Head of Public Programming?, Eugene Hernandez, explained that Sundance will still include a virtual component, but it will be more selective and available for a shorter window than before. The virtual screenings for the general public will begin on January 25 and run until the festival’s last day, January 28, with a focus on films in the event’s competition sections.
In-person premieres will take place starting 18 January 18 and continue through 23 January in various venues in Park City and Salt Lake City. Screenings of official selections will continue through the closing weekend with the festival aiming to welcome both new artists and alumni.
Next year’s festival will mark Sundance’s 40th anniversary and it will once again feature over 90 feature films and 60 shorts. An awards ceremony is scheduled for 26 January. Hernandez explained that Sundance is trying to balance the in-person and virtual aspects of the event while simultaneously keeping the event fiscally viable, “As we plan for next year, it has been invigorating and inspiring to reflect on the history of this great Festival and dig in with colleagues to shape a sustainable vision for the future that builds and embraces audiences from all walks of life.”
Source: Sundance Film Festival
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Celluloid Junkie is the leading online resource dedicated to the global film and cinema business. The Marquee is our newsletter focused on motion picture exhibition; keeping industry professionals informed of important news, the latest trends and insightful analysis