The Desert

To say that the business of exhibition worked in a stable environment would be far from accurate. It has had peaks and valleys since its inception. We have to be frank with ourselves and express the fact that COVID probably did the deepest damage. Even the Spanish Flu epidemic of 1919 paled in comparison. The consensus seems to be that as a business we are doing 80% of the business that occurred in 2019. Consumers were changed by the epidemic and frankly changed forever. Now with the lingering actors strike the reclamation of this once proud business has been stalled. We are beginning to sell from an empty tent. If we are going to let consumers know the value of the theatrical movie going experience we have to have something to sell.

 Some circuits are releasing that the days of being a physical play are coming to an end. There is a deep virtual play, plus in the past moviegoing failed to capture consumer data, now circuits are realizing the deep need to create a one to one relationship with the consumer. The economics of the motion picture business is changing and changing rapidly.  The value of the collective movie going experience has been drilled home by Taylor Swift and the phenomena that is the Eras Tour Movie.  The promise of digital delivery is now becoming evident when concerts can be streamed directly into the theaters to offer consumers tangible, attractive content because the studios keep falling on their own swords.

 Can you imagine where the box office would be if Miss Taylor didn’t hit town. “Killers of The Flower Moon,” a streaming services release through Paramount was the number two picture. Prior to 2019 the industry would have been aghast at that fact

 Hollywood manipulated the SAG strike action to temporarily build up their cash reserves. The studios have told SAG that if a deal does not get done this week, then it's not going to get done until well into the New year. This strike prevents actors from promoting any property and if it is not resolved quickly then the business of exhibition may be getting coal in its stocking.

 So far this year  the business has made $7.5 billion, certainly better than 2022, but as said previously about 20% off from 2019.  Most analysts are looking into their crystal ball and are making the prediction the year will end up at $9 billion. Even though analysts project the year could wind up at around $9 billion, reaching that mark is solely dependent on the potential blockbusters the studio is planning to roll out. Delays of release are reshaping the moviegoing landscape with the next iteration of Ghostbusters being delayed as well as Dune Part Deux.

Shawn Robbins, Chief Analyst at Boxoffice Pro, writes that “The lack of any resolution in labor conflicts is bad news for movie theaters. The longer the strike goes on, we approach that worst-case scenario of impact. Some movies don’t need actors to promote them, but smaller releases could benefit from having stars on the press circuit.”

There are some movies that have the potential to break out Disney’s “The Marvels” and the prequel to “Hunger Games” and of course the next “Trolls” movie. An interesting sidebar is the Shudder movie “It’s A Wonderful Knife”, a re-telling of the classic “It's a Wonderful Life.” The movie is described as It's a Wonderful Life meets Scream and is about a heroine who saves her town from a menacing serial killer, a year later, she wonder if her life has made a difference. Streamers as a whole have gleefully embraced the holiday spirit and are planning a Yuletide onslaught including Eddie Murphy in “Candy Cane Lane.”

 December 1st Queen B, Beyonce hits the screens. Many feel that between Swift and Beyonce a new genre of entertainment might be taking shape. Concert films cost less and can provide higher margins. If the strike is settled in short order, promotion can begin and the pipeline re-ignited. If the strike is not settled that will place exhibition in a dark doldrum.

There is another risk, one that I find odd, but logical. The end of strike will open up the floodgates and there could be risk of having too much product. The strike shutdown a ton of production. Delays have pushed  “Mission: Impossible 8” to 2025 and Disney’s “Deadpool 3” has not finished filming.

 Supposedly there is the talk of massive shuffling, ”Twisters”, “Beetlejuice 2", "Wiseguys” and “Venom 3”are all candidates for shifting their release dates.

 Last Friday SAG made a counteroffer to the offer put forward by the studios. Negotiators for SAG  and the Alliance of Motion Picture and Television Producers (AMPTP) will  meet again.

Here's hoping.