There's a popular bearish narrative out there when it comes to the local multiplex, and you've probably even repeated it yourself. Folks aren't going to the movies the way they did before. Streaming from home is too easy and convenient, and the retro charm of a cinema screening is a fading art form.
The numbers tell a different story. Paramount Global's (PARA 2.91%) Scream VI was the top draw at the box office over the weekend. The $44.5 million in domestic ticket sales is an opening-weekend high for the franchise. The $22.6 million collected overseas was also a high-water mark for the Scream films.
It's not a fluke. Creed III topped the big-screen chart a week earlier, taking in a better-than-expected $58.7 million in its stateside weekend debut. It wasn't just the biggest opening for a Creed or Rocky movie -- it was the highest-grossing opening for any sports film.
The sequel that owned the box office before that -- Marvel's Ant-Man and the Wasp: Quantumania -- also had a stronger opening than the first two Ant-Man flicks. Narrowing the focus to premium-priced Imax (IMAX 1.69%) showings of Ant-Man, it generated more revenue on the supersized format than the franchise's two previous films combined.
You could rightfully argue that tickets cost more now than they did earlier in the history of a popular franchise. But the point remains that consumers haven't stopped going to the movies. They're just doing so in a different way, and that is the real problem that exhibitors will need to tackle to restore investor faith in the multiplex industry.
Leaving a lasting impression
Debutantes are drawing sizable crowds, but looking back isn't pretty. As strong as the Scream, Creed, and Ant-Man sequels opened -- and with Avatar: The Way of Water carrying the load through January -- ticket sales somehow continue to decline in 2023 from pre-pandemic levels. The $1.36 billion in domestic box office receipts so far this year is 21% below where we were at this point in 2020.
It gets worse: The year-to-date tally is 26% off from 2019's ticket sales and a sobering 41% from 2018's year-to-date returns.
There have been three franchise-record openings, and moviegoers aren't flinching at paying more now than they were five years ago. How can domestic ticket revenue be less than three-fifths what it was at this point in 2018?
The problem with the industry right now is that movies generally have short tails these days. Ant-Man and the Wasp: Quantumania had a blowout premiere, but ticket sales plummeted nearly 70% in the subsequent weekend. It's the largest second-week plunge for a film in the Marvel Cinematic Universe. Reviews weren't particularly positive for the film, but the same phenomenon is happening even with universally acclaimed movies.
Image source: Getty Images.
Why are movies coming out with a bang, but ending on a whimper? The biggest likely reason for the quick fade-out is that theatrical releases have shorter windows now.
Movies used to play exclusively at theaters for as long as three months before moving to on-demand platforms or premium streaming movie channels. The norm is now closer to 45 days. You are less likely to see a movie again -- or at all -- as a release plays out, knowing that it will be available on your terms soon.
The competition for streaming services to stand out has become an arms race for survival. Most of the movies worth watching are spoken for on a digital platform shortly after their multiplex runs. It's also never been easier to stream from home with smart TVs and dongles getting better and cheaper.
Lastly, connectivity can also be a momentum killer. Bad reviews and crucial spoilers spread quickly online. If you don't see a movie right away, you might be dissuaded from seeing it later.
There might not be solutions to the problematic trends for movie theater stocks. Streaming services are only going to get more hungry until the inevitable shake-out. Home theaters will improve in quality at lower price points.
It's great to see that movies do matter to moviegoers. The industry just has to find a way to make them matter longer.
