Mark O’Meara, owner of a cinema based in Virginia, constantly wonders and worries about what exactly his customers will buy tickets to see on a given weekend. It’s not that people have stopped loving the big screen, he says, they’ve just gotten out of practice. In fact, in the over 30 years O’Meara has worked in the business, he’s had a front-row seat as the audience that used to frequent the cinema turned to streaming services.
“I see people at the supermarket and they tell me, ‘You don’t have anything we want to see.’ I don’t blame them on certain weekends,” says O’Meara, who operates two locations in Fairfax County. “No one denies that they consume content. That has never been the issue. We’re competing with the comfort of the couch. Good movies sell no matter what the hell is going on. But we need more of them.”
This year, total revenues are expected to reach $30.5 billion worldwide, more than 10% less than in 2023, which in turn was almost 20% less than pre-pandemic levels. National ticket sales, an even better indicator of the film industry’s influence on culture in general, are expected to reach approximately 800 million. By contrast, before COVID disrupted the film business, cinemas averaged around 1.3 billion tickets sold per year.
“Many of the gains we are seeing at the box office are due to higher ticket prices,” says Eric Handler, CEO of Roth Capital Partners. “Cinemas need to do a better job of promoting the cinematic experience and getting people to come back.”
In recent years, the film business has suffered setback after setback. First, COVID shut down cinemas for months, leading to a wave of release date delays and halted production on major films, which only resumed with the implementation of new and costly health measures that added millions to budgets. Then, in 2023, historic writer and actor strikes plunged production once again, leading to another month-long work stoppage, while a new crop of films saw their opening weekends delayed. All of this has left cinemas with fewer films to exhibit, which analysts believe is partly the cause of declining revenues year after year.
“We are still in post-pandemic recovery mode,” says Eric Wold, analyst at B. Riley Securities. “It’s taking time for people to return to cinemas and have a list that is broad and diverse.”
So, what worked? Sequels and high-action adventures dominated the 2024 box office, while family films finally made a significant comeback. Nine of the top 10 highest-grossing global releases were part of franchises (“Inside Out 2”, “Deadpool & Wolverine”, “Despicable Me 4”, “Moana 2”, and “Dune: Part II” among them), while “Wicked”, the only original film among the top earners, was an adaptation of a popular Broadway musical from 20 years ago that relies heavily on “The Wizard of Oz” story. This was a stark contrast to the previous year, when the top three releases – “Barbie”, “The Super Mario Bros. Movie”, and “Oppenheimer” – arrived without a Roman numeral in the title.
“It seems that all Hollywood offers is a sequel, a prequel, or a reboot,” says Jeff Bock, analyst at Exhibitor Relations. “But can you blame the studios? That’s what delights the audience.”
When studios tried to release original properties, or at least produce films like “The Fall Guy” (a reboot of a long-forgotten 80s series) that were not part of long-established film series, they mostly failed. Take for example Paramount and John Krasinski’s $110 million fantasy comedy “If”, which bombed at the box office with $190 million worldwide, or Apple’s “Fly Me to the Moon”, a Channing Tatum and Scarlett Johansson “meet cute” that failed with $42.2 million worldwide, less than half of its $100 million budget. Although the rise of streaming services like Netflix and the collapse of home entertainment offerings like DVDs have disrupted the economics of film production, here’s a critical context: exhibitors keep about 50% of ticket sales, so films must double their production budgets and marketing expenses to achieve theatrical success. The reception of these films does not make studios willing to take risks on unproven properties.
“The audience says they want original titles, but they are doubling down and supporting the safer choices of titles they know,” says Disney’s Executive Vice President of Global Theatrical Distribution, Tony Chambers.
However, many later films achieved profits rivaling those of pre-pandemic blockbusters. Disney, after a dismal 2023, enjoyed a considerable resurgence, with “Inside Out 2” and “Deadpool & Wolverine” easily surpassing one billion dollars, while “Moana 2” will approach or even surpass that milestone. In total, Disney will have presented three of the top five highest-grossing films of the year, the first time it has done so in the post-COVID era.
Meanwhile, Universal and Illumination’s “Despicable Me 4” came close to the billion-dollar club, earning $969 million, and Warner Bros. and Legendary’s “Dune: Part Two” notably outperformed its predecessor, 2021’s “Dune: Part One”, with $714 million in sales. These films also accounted for a higher percentage of the overall box office. In 2024, at this point, the top five films accounted for 32% of the market. A decade ago, in 2014, the top five releases of the year accounted for 15% of total revenues.
On the other hand, the biggest films that failed to connect with moviegoers were absolute disasters. The biggest flops of the year include “Joker: Folie à Deux”, which grossed $206 million worldwide with a $200 million budget, “Horizon: An American Saga – Part One”, directed by Kevin Costner, which grossed $38 million despite costing $100 million, and Lionsgate’s video game adaptation “Borderlands”, which cost $110 million to make and only grossed $32.9 million.
“I am reassured by the fact that the market has evolved in such a way that there is a great divide between those who have and those who do not,” says Jeff Goldstein, President of Domestic Distribution at Warner Bros. “The hits are bigger than before, and the misses are bigger than before.”
What is also lacking, says Goldstein, is the kind of modestly successful singles and doubles that once drove the industry. “We used to have a middle class that made up the bulk of films,” he laments. “That has diminished.”
Strikes and pandemics are not the only things that have disrupted the film business. The industry has also had to deal with changes happening throughout Hollywood: specifically, corporate mergers that have left the business with fewer independent studios (see Disney’s acquisition of Fox) and major shifts in strategy (for example, the tumultuous sale of Warner Bros. to AT&T first and subsequent discovery) that have disrupted the old order. There is cautious optimism that the pending purchase of Paramount Global by Skydance will keep at least one more film studio intact, as a sale to a direct competitor like Sony could have resulted in cutbacks and even fewer films to screen in cinemas. But it is also recognized that this era of consolidation in the entertainment industry is not over yet, as studios struggle to find ways to generate profits at a time when streaming and consumer habits have reduced margins.
“This industry is going through a Darwinian process and we only hope that these mergers do not affect the number of films we have available to screen,” says Michael O’Leary, CEO of the National Association of Theatre Owners, a trade exhibition group. “We need compelling films to screen throughout the 12 months of the year.”
Studios are pushing for an increase in the volume of their releases and considering releasing more films among themselves. The film business was excited by Universal, Paramount, and Disney’s decision to release “Wicked”, “Gladiator II”, and “Moana 2” in quick succession, noting that the influx of new exciting films increased overall revenues rather than cannibalizing ticket sales. It also inspired a wave of positive media coverage that applied a veneer of coolness to a business that is often described as being in dire straits.
“Competition is good for everyone,” argues O’Leary. “It brings more attention to the box office and generates excitement. We can handle more than one wide release per weekend.”
Quality control may be an important ingredient in expanding certain franchises, but impressing trendsetters is not always a recipe for success. Box office observers point out that it is no longer enough for a film to be good or even excellent to fill theaters. After all, “The Fall Guy” and “Furiosa” received good reviews and still failed to make a big impact. Now, a film must imbue the spirit of the times and make the audience feel FOMO if they don’t go to the multiplex to see it. That’s partly how “Wicked” defied the odds and became the rare Broadway adaptation that resonated with moviegoers, many of whom dressed in pink and green, the characteristic colors of the film’s witch protagonists, at the cinema.
“We are all very clear that it is necessary to create a sense of urgency for films to succeed at the box office,” says Peter Cramer, President of Universal Pictures. “I wish I could say that casual moviegoing is as strong as it should be, but it’s not. We need to force people out of their homes.”
Being part of a franchise is also not enough to guarantee a monstrous opening weekend. “Dune: Part II”, for example, improved on the box office results of its predecessor in part because critics praised it for being deeper and emotionally more engaging than the first film; sequels like “Inside Out 2” and “Deadpool & Wolverine” also enjoyed positive reviews. In contrast, “Joker: Folie à Deux” was hindered by scathing reviews that blamed the film for not finding a sufficient reason for being.
“The audience can feel when sequels exist simply because the studios needed to make another one. It has to be earned and executed with the highest possible quality,” says Blair Rich, Chief Commercial and Marketing Officer at Legendary, the producer of “Dune” and “Godzilla x Kong: The New Empire”, another of the top 10 releases of the year. “My hope is that this one-size-fits-all mentality is starting to diminish and that originality is once again the focus, even if it’s a sequel.”
For the first time in a long time, fewer event-driven campaigns have been superhero type. In pre-pandemic times, comic book adaptations were teflon at the box office, but recently they have been met with lackluster or worse grosses. “Deadpool & Wolverine”, Disney and Marvel’s foray into R-rated territory, was a resounding success, but Sony’s Marvel branches – “Madame Web”, “Kraven the Hunter”, and “Venom: The Last Dance” – were absolute bombs or mediocre compared to previous installments. This trend could be reversed next year with three Marvel sequels on the way, “Captain America: A Happy World”, “Thunderbolts”, and “The Fantastic Four: First Steps”, as well as James Gunn’s reboot of “Superman”, which hopes to ignite a new chapter for DC Comics. However, if these films fail to win back fanboys or fangirls, it could indicate that tastes are fundamentally changing.
For now, cinema owners are not discouraged by the decline in superhero box office. They feel that the market is evolving to create more space for other genres to succeed. Not long ago, films starring recognizable human protagonists, avoiding capes and spandex, were able to attract large crowds.