Higher Ticket Prices Highlights A Key Problem Facing Theaters

With The Batman opening tonight after two nights of previews (grosses that will be rolled into the Thursday preview total which in turn will be thrown into the Friday cume), the biggest conversation isn’t so much about the movie (which has earned a strong 86% fresh and 7.8/10 from Rotten Tomatoes) but about the ticket prices. Yes, AMC and Regal will be charging around $1-$2 more per ticket compared to every other film playing at their respective theaters. To be fair, it’s the kind of news that dominates the discourse among the perpetually online and is mostly ignored by the general public. Whatever The Batman was going to earn this weekend ($100 million-plus seems pretty safe), it’s still going to earn. But why did the multiplexes take this high-profile and expectedly controversial step?

It’s not uncommon for theaters to raise prices for every movie before a tentpole opens, it happened for Star Wars Episode One: The Phantom Menace in 1999 and even The Godfather in 1972. But raising ticket prices for just one movie is unique, at least in North America. Europe has had variable pricing in their theaters for ages, including different prices for different seats for different movies at different times. The easiest “why” answer is “Because they can.” The more complicated answer is “because they must.” One can certainly argue that “Whatever happened happened and couldn’t have happened any other way.” However, I might argue that the theater chains might not have taken this step had The Batman not been the only big-deal movie in theaters for an entire month.

There’s nothing else in theaters between late February and late March.

Nothing “big” opened last weekend, to the point where the Dolby-only rerelease of The Godfather had the top per-theater average. Next weekend was supposed to be the theatrical release of Pixar’s Turning Red before Disney chose to send the film (in participating territories) to Disney+. The weekend of the 18th was supposed to at least see Guy Ritchie’s Jason Statham/Aubrey Plaza action-comedy Operation Fortune before STX delayed the film indefinitely. As a result, Warner Bros.’ The Batman is now single-handedly responsible for keeping theaters in business for the next three weeks, up until (at best) Paramount’s Sandra Bullock/Channing Tatum flick The Lost City on March 25. This continues a frustrating pattern whereby a would-be theatrical comeback is muted by a lack of consistent product.

Back in September 2020, the softer-than-hoped domestic grosses for Tenet ($58 million) along with New York and LA theaters remaining closed sent the expected slew of year-end tentpoles (Wonder Woman 1984, Black Widow, Top Gun: Maverick, etc.) to elsewhere on the calendar. Everyone rejoiced last April when Godzilla Vs. Kong stampeded to $50 million over six days, but there was little else left to capitalize on its success until A Quiet Place part II and Cruella in late May. Shang-Chi and the Legend of the Ten Rings was almost entirely responsible for the month of September, which made its $230 million domestic total a genuine life-saver. A relatively conventional October-December (Spider-Man: No Way Home, No Time to Die, Ghostbusters: Afterlife) has led to a near-empty 2022.

Sony moved Morbius from January 28 to April 1, which left January with only Scream and its “good enough for itself” $80 million domestic total. Ditto Jackass Forever’s “good for a $10 million sequel” $56 million domestic gross, but Moonfall and Death on the Nile both crashed while Marry Me played like a lower-level Jennifer Lopez rom-com with just $22 million. Only Uncharted played as hoped with a current $88 million 13-day domestic cume from a $52 million Fri-Mon debut. This is not unlike, in early 2019, when Glass slightly underperformed ($111 million versus $137 million for Glass) in January and LEGO Movie 2 outright bombed ($105 million versus $259 million for The LEGO Movie) leaving the theatrical industry lying in baited breath for Captain Marvel in early March.

The key difference, obviously, is that there were other “big” releases offered up in the first two months of 2019. How to Train Your Dragon: The Hidden World opened with $55 million, What Men Want nabbed a $18 million debut and Alita: Battle Angel slightly overperformed (in terms of domestic expectations) with a $42 million Thurs-Mon debut. Glass was still quite profitable ($255 million on a $20 million budget), and the likes of Happy Death Day 2 Me, Isn’t It Romantic and the sleeper hit The Upside ($108 million from a $20 million debut) kept theaters in business. Prior to Covid, it was expected that studios provide a relatively regular slate of varied films, since companies weren’t using their theatrical releases as bartering chips in a streaming war.

The Batman now opens amid a position of a worsening divide between the big-tier hits and everything else. As you know, going back way years before Covid, the theatrical industry has been with the near-total collapse of the commercial viability of non-franchise, non-event, adult-skewing movies. Star power has all-but-vanished in most circumstances, save as an added value element in a pre-sold property (Will Smith in Aladdin, Tom Hardy in Venom, etc.) or as part of an ensemble cast in an escapist genre flick from a marquee director (Once Upon A Time in Hollywood, House of Gucci, etc.). Unless audiences want to see a specific movie in theaters, they now stay home and stream something. And the number of movies they deem theater-worthy is growing ever smaller.

Fewer movies make up a larger piece of the box office pie.

15 years ago this weekend, Disney’s Wild Hogs opened with $39 million. The John Travolta/Tim Allen/William H. Macy comedy, about three suburban men who form a biker gang as part of a seemingly harmless midlife crisis, would earn $256 million on a $60 million budget. The next weekend, Zack Snyder’s 300 would shatter expectations with a $70 million opening on the way to a huge (especially for an R-rated film in 2007) $210 million domestic cume. Two weeks later, Will Ferrell and Jon Hader’s original comedy Blades of Glory would open with $33 million on the way to a $119 million cume. It wasn’t that the industry didn’t still relish mega-tentpoles like Spider-Man 3, Transformers and Shrek the Third. It’s that audiences also showed up to everything else too.

The overall domestic box office earned $9.6 billion in 2007, a 5% increase from 2006 partially thanks Spider-Man 3, Pirates of the Caribbean: At World’s End, Shrek the Third and Transformers all topping $300 million. However, the top six films (including Harry Potter 6 and I am Legend) earned $1.836 billion, or 18.9% of the overall total. The top six earners in 2001 (thanks to The Fellowship of the Ring and Harry Potter and the Sorcerer’s Stone both topping $310 million right at the end) grossed 15.7% of that year’s $8.06 billion total. By 2012, the top six earners (The Avengers, The Dark Knight Rises, The Hunger Games, Skyfall, The Hobbit: An Unexpected Journey and The Twilight Saga: Breaking Dawn part II) would make up 21.7% of the $10.96 million total.

In 2015, Star Wars: The Force Awakens, Jurassic World, Avengers: Age of Ultron, Inside Out, Furious 7 and Minions all comparatively overperformed to earn $336-$936 million each. They grossed a combined 27.8% of an $11 billion pie, and since then we’ve seen the biggest of the big representing a much larger piece of the overall pie. Yes, 2018 still saw a variety of hits like A Quiet Place, The Meg, Bohemian Rhapsody and The Grinch. But the top six movies, Black PantherAvengers: Infinity WarIncredibles 2Jurassic World: Fallen KingdomDeadpool 2 and The Grinch, earned $2.99 billion, or 25.5% of the total domestic box office. 2019 was a special case, as Disney had a fire sale and some of the competition held back until 2020.

The top ten releases, grossing between $310 million and $858 million, earned $4.654 billion or 40.7% of the entire $11.4 billion total. Of that top ten, seven were from Disney, one (Sony’s Spider-Man: Far from Home) was Disney-adjacent and one was a Warner Bros. DC flick (Joker). Only Sony’s Jumanji: The Next Level at number ten was neither a Disney film nor a Marvel/DC adaptation. We still ended 2019 on a few optimistic hits (Knives Out, Hustlers, etc.), but a high-concept dramedy like Yesterday earning $73 million or a star-studded (DiCaprio! Pitt! Robbie!) adult-skewing event flick like Quentin Tarantino’s Once Upon A Time in Hollywood earning $141 million didn’t used to be seen as a borderline miracle. We haven’t had an original animated blockbuster since Coco ($210 million) in late 2017.

Theaters have to make as much money as possible from each ticket.

Overall domestic box office was consistently rising, to well over $11 billion in a conventional year. While some of that is due to rising ticket prices (with the cost of inflation, even as wages have remained stagnant), the tickets sale figures had decreased to only a modest degree. Movie theaters sold around 1.2 billion worth of tickets in 1993. A 100 million drop wasn’t that bad considering the sheer amount of competition which has arisen (streaming, HDTVs, sound bars, the VHS-to-DVD-to-VOD revolution, every manner of online distraction, etc.) over that 25 year period. But what’s changed is that audiences are showing up for a much smaller number of titles. Audiences only show up for the biggest event films, either ignoring everything else or waiting for at-home consumption.

2020 was supposed to be the year Paramount, Sony, Universal and Warner Bros. fought back. But a global pandemic shuttered theaters, denying Hollywood a chance to challenge Disney’s pop culture supremacy, prevented multiplexes from further adapting and gave streaming (Netflix, Disney+, HBO Max, etc.) a huge advantage in the cultural/commercial landscape while Wall Street cheered on a “streaming revenue at all costs” mentality. The change in viewership habits could still be pandemic-related. Will older audiences ever again show up to Murder on the Orient Express-level numbers ($355 million in 2017) for a film like Death on the Nile ($105 million)? Covid has worsened the existing problem, which is that there are fewer and fewer movies for which audiences are not being conditioned to want at home for “free.”

If Hollywood is only going to give movie theaters The Batman for a month, and audiences are likely only going to show up for The Batman between now and (fingers-crossed) The Lost City in late March, then best to make sure every ticket for The Batman brings in as much revenue as possible. If more people splurge for that IMAX or Dolby Cinema seat, all the better. If audiences show up in a premium auditorium and in a theater (Cinepolis, Studio Movie Grill, etc.) that offers full-service dining, well, that’s best. At least over the short-term, and probably in the long term, the goal for theaters will be making as much as possible from each ticket sold for the dwindling number of movies for which audiences still show up.

If you are appalled at having to pay $10 to see The Batman on a weekday matinee in Akron, Ohio or $28.25 to see The Batman in IMAX on Friday night in Burbank, California, you can always pay $20-$25 for a month’s worth of AMC A-List or Regal Unlimited. The ticket upcharge may be an experiment in variable pricing, or it may just be an inevitable consequence whereby movie theaters need to make as much as possible from The Batman because there’s nothing else that’s going to make them any money. When audiences no longer show up for Batman & Robin *and* My Best Friend’s Wedding, multiplexes have to maximize what they can get from the superhero comic book flick.

Higher Ticket Prices Highlights A Key Problem Facing Theaters Source link Higher Ticket Prices Highlights A Key Problem Facing Theaters

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