Price Point 043: December '23 Box Office
Hollywood is about hits
December US box office was $738MM with 131 releases for an average per release of $5.6MM. This is up 9% from last year in terms of total box office, but 2022 was a COVID year. If we go back to 2019, America’s most recent totally healthy, “normal” year, we are off 36% in terms of gross and 22% in terms of releases. Not including 2022 or 2020, 2023 was the worst December literally since 1999. And not counting 2020-2022, the last time so few movies were released was 2001.
We should also note that 2023 was leavened by a couple of unexpected surprises. Taylor Swift released her concert film, Beyonce had her concert film, and a couple of Japanese films, Godzilla and The Boy and the Heron, did much better than expected. Those feel like one offs that made the year look a bit better than it was.
Obviously, the strikes were a factor as some major releases were pushed to 2024. Streaming is a factor as more movies are produced straight for streaming. However, the main issue here is right at the top. Let’s compare 2023 to 2017, Hollywood’s best December ever, and to 2016. What’s the difference?
2016 and 2017 versus 2023
Total 2017 December Box Office was $1,325MM vs. 2023’s $738MM, a 44% decline.
In 2017, the top ten films captured 83% of the box office (vs 2023: 72%) and the top 5 captured 68% (2023: 49%).
The top five films in 2023 delivered $364MM in box office versus 2017’s $902MM.
The difference in the top 5 accounts for 92% of the difference between 2017 and 2023.
The difference in the top 10 accounts for 96% of the difference.
The fact that Star Wars made $517 and Wonka made $134 itself accounts for 65% of the difference.
2016 versus 2023:
In 2016, the top 10 films captured 81% of the box office and the top 5 captured 67% – almost identical to 2017.
In total, there was a 38% decline from 2016 to 2023.
95% of the $429MM difference is in the top 5 movies.
96% of the difference is in the top 10.
So as they say – it’s about the hits.
Making it all about Star Wars versus Wonka makes it sound like a fluke. But if 2023 is the worst year since 1999, that’s no fluke. What else can we learn? What are the other factors?
Disney has come off its historic winning streak. They had 33% of the box office in 2019. Avengers: Endgame, Frozen II, The Lion King and The Rise of Skywalker. Wow, that’s a good year to retire on! In 2023, they had 16% (and the economics behind the 2023 grosses were much worse). I am not sure the numbers are going to get better soon. The enthusiasm for Pixar, Disney Animation, Star Wars and Marvel just wasn’t there this year and we might question whether it will ever be what it was. I mean, the Marvels grossed $84MM domestic! Either these brands get rehabilitated quickly, someone else steps up and make up for this 17% hole in the market (DC?), or this market may just have gotten smaller for a while. An optimist would say: hey they still had three of the top 10 in 2023, relax.
Originally, Dune: Part 2 and Ghostbusters: Afterlife 2 were to have been released in Q4 and should have been on the 2023 list. That would have helped somewhat.
We are not seeing Premium VOD numbers. To what extent is that suppressing the 2023 numbers? I am not sure but I don’t think it is a huge factor for these top-of-market films. Let’s get back to this when we discuss indies. (I think, if anything, this could be offset by the fact that we are not taking inflation into account and we are not taking into account the greater role and availability in 2023 of Premium Seating eg IMAX.)
“People have been trained to watch movies at home.” I don’t know what to tell you. They didn’t watch Barbie at home. Or a three hour movie about a physicist called Oppenheimer at home. Or John Wick 4 or Sound of Freedom. I don’t think this is the key issue. Could it be especially important for children’s animated films or indies? Maybe but mostly this was a strong year for kids animation except for Disney.
Inflation. There has been a lot of inflation over the past few years, which has substantially outpaced wages. Even though the rate of inflation has subsided, that doesn’t mean inflation has gone negative and prices have rolled back. Whether it is the cost of going to the theater or the cost of concessions or the cost of everything else, yes the bar may be a bit higher for a night out at the theater.
Indies
Finally, this would not have changed the answer for December 2023, but I will make a comment on indies, because many of us are just not in this top 5 Disney animated sequel Star Wars business to begin with.
In the indie space, we clearly are not out of the woods. The Holdovers is topping out at $18.2MM and is in PVOD at $19.99. Priscilla did $20.1MM. Poor Things is at $10.9MM and is still going, having snagged $3,625 per screen last weekend on 800 screens. Asteroid City, with a mammoth cast, did $28.2MM in the US. As I have said before, people have to take a hard look at budgets.
Contrast these numbers with 2016. Three Billboards did $55MM. Manchester by the Sea did $48MM. La La Land did $151MM. Moonlight did $28MM. We can debate whether these are exactly apples to apples, but I would certainly rather release a specialty tinged film in 2016 than in 2023.
It is possible that the audience for these more artsy films, as we have discussed before, which tends to be older, and may be more sensitive to mask issues, really has developed more of a tendency to stay home. Also, it is true that some indie type theaters have gone away. I do not think it helps that there is no brand for indies and they are spread all over across the streamosphere, which helps dilute enthusiasm and engagement of people who are aficionados. And, finally, many of the awards-y films are going more or less straight to streaming (Killers of the Flower Moon, Maestro), which I just think trains audiences the wrong way.
It may take a couple years before this segment is back to health. I would hate to think it has permanently peaked. And yes I think it would be better if there were a dedicated streaming service just for this sort of thing (but which released all of its films to theaters for a theatrical run before streaming).
Final Consideration
Maybe we are not as good at this anymore. I think hiring and training is definitely worse. I think it is harder for producers to make a living and so we have fewer of them. I think Hollywood as an industry faces more competition in attracting younger people now that they can go to the latest AI powered social media start up, or to Google, or just become influencers. I think people have been distracted by a lot of issues over the past 5-6 years and, as I have always said, — if you want to make a great movie or TV show, the first rule is that you have to be thinking about one thing only, which is about making a great film or TV show. It is so easy to get it slightly wrong and have the souffle fall. It is possible that Hollywood, or large swaths of it, has indeed taken its eye a bit off the ball. I think it would be hard to argue that that is not the case. If so, I would argue that people should rediscover the spirit of 2016 and get their eyes back on the ball asap.
Focus on greatness and do the daring thing.
RP
PS In other news by the way, if you’re around LA, this exhibit downtown of the world’s first art amusement park, lost since 1987, looks amazing and I must go. Luna Luna is a collaboration of Basquiat, Hockney and Haring. Sounds insane.
Roy Price was an executive at Amazon.com for 13 years, where he founded Amazon Video and Studios. He developed 16 patented technologies. His shows have won 14 Best Series Emmys and Globes. He was formerly at McKinsey & Co. and The Walt Disney Co. He graduated from Harvard College in 1989.
Great piece - from a true Executive that “gets it” and understands great content rules the day.