The headlines began with a couple weeks still left before the end of last year, hyping that movie ticket sales had already reached $11 billion. The final tally wound up being just shy of $12 billion, a record-setting number that was 6.7 percent over 2017’s final haul. Disney was responsible for a quarter of that all by itself, thanks largely to the massive success of Black Panther, which was never overshadowed even though it came out all the way back in February. A late burst from Spider-Man: Into the Spider-Verse, Aquaman and a few other releases helped push it over the top.
The news is even better globally, with worldwide box-office up to $41.7, with the U.S. domestic market leading the growth for the first time in a long while.
What remains to be seen is how things fared in terms of actual tickets sold. It’s estimated to be around 1.2 billion, which would be about five percent higher than the dismal showing of 2017, when attendance was at a 25 year low. That’s still well off the high of several years ago, a trend attributable to several factors including the high ticket price, the speed at which new movies come to home video and more.
Diminishing theatrical audience numbers have been masked by the focus on total sales, which has steadily increased thanks to rising ticket prices due in part to prestige formats like Dolby, IMAX, 3D and so on. Attendance figures were also helped by the popularity of MoviePass, which has done everything it can in the last six months to erase consumer goodwill.
There are, of course, lots of lessons being offered given those dollar amounts. Various op-eds are pointing to the resurgence of movie theaters, thanks in part to Hollywood studios releasing popular films throughout the year instead of grouping them all in three months of summer. And those releases have been more diverse than in recent years, though while more black directors enjoyed more success the number of female directors continued to be flat.
A recent study found little cannibalization by streaming of the moviegoing experience. Instead it seems that the two sit side by side, each fulfilling a different need in the audience and serving them unique material to enjoy. Given the study was commissioned by the National Association of Theater Owners, it’s not surprising the angle taken is that theaters are doing just fine. Some harsh realities are brewing not far below the surface, though, that could make 2019 an interesting year for the entertainment industry.
Streaming revenue has already topped that of theatrical exhibition, something driven by the proposition of higher value for the money. Netflix in particular tends to be the boogeyman haunting the dreams of theater owners and big media companies, who are either ready to launch their own streaming services to compete against it or sign deals to produce films for it.
Netflix has 55 original films a year planned, including upcoming releases from some of Hollywood’s leading filmmakers. And because they eschew all but a cursory theatrical release for most of those movies and are refusing to play by anything approaching traditional rules, they are threatening the validity of those rules.
It may be true that studios are once more in a position to grasp the Oscar statuette once reserved for the smaller independent players that trafficked in the kinds of films that garnered nomination. Left unsaid, though, is that they’re back in that position because those awards-friendly films have been produced by Netflix and others and are being shunned from prestige consideration. So the mass appeal blockbuster remakes, adaptations and sequels from the major studios are left as the only films available for nominating committees to choose from.
Netflix is simply making the kinds of movies the studios no longer are interested in, shown in stark relief this past summer when it put out a number of romantic comedies to address unmet consumer demand. When you look at the winners and losers at the box office last year, the “losers” category is filled with niche films that would play much better as streaming releases, where the barrier to entry for the audience is so much lower than taking a chance on an unknown quantity at the expensive theater. Even comedies, which once dominated the box office, are now a bad bet for studios and theaters.
It also remains to be seen how susceptible theatrical exhibition is to whatever form the looming recession will take. Also coming down the road is the potential lifting of what’s commonly known as the Paramount consent decree. That could prove devastating to smaller theaters who don’t have the safety of scale bigger players like AMC Theaters and other large chains do. If the number of movie houses with fewer screens, the ones that often operate in less affluent neighborhoods, begin folding it will create fewer people who have any theatrical experience available to them, choosing instead some mix of legal and illegal streaming or downloading.
There are lots of unknowns and predictions are likely useless, despite what others making them may believe. What seems certain, though, is that 2019 will be a rough one. Netflix will continue to find ways to dominate the cultural conversation, stealing attention from theatrical releases that, in the coming year, seem somewhat lackluster. Further problems will develop from a mix of economic slowdowns and increased competition from all quarters as the same media companies that feed movies into theaters begin to divert some of that stream to their owned streaming services.
It’s also likely there will be a major shakeout in the streaming market. The consumer base simply can’t support all of these, and we’ve seen recently that when a service can’t achieve massive scale the corporate owners will shut it down.
Basically, 2019 is going to be a little rough.