Our survey of the 2014 domestic box office — 132 films that played at least one week in over 1,000 theaters — offers clues as to why overall box office fell to a significant extent. The revenue not only dropped 5.2%, but the fall in tickets sold, the lowest since 1995, is the worst performance compared to total population in many decades.
Here are five takeaways from the 2014 box office. (Also check our annual comprehensive performance overview of studio performance in 2014, and our ranking of all 132 wide domestic releases here.)
1. The rise of the international box office.
One statistic stands out above all others: the continuing shift to international dominance in worldwide totals. For 2014, seven of the ten biggest hits did more than two-thirds of their business outside of the U.S. & Canada. In 2013, only three of ten did that. And the disconnect between the two zones on many titles in striking — 2014’s biggest hit, “Transformers: Age of Extinction” did only 23% of its business on the domestic side (fifth place), while the film that for months has been #1 domestic for the year (though it will shortly drop to a close second), “Guardians of the Galaxy,” as of now ranks no better than tenth among international performers among last year’s releases (eleventh if one includes 2013’s “Frozen”‘s additional foreign take last year).
What makes this more than a statistically curious item? Clearly, the studios produce their movies, and project their potential profits, not from domestic returns so much as worldwide. And as the domestic share continues to fall, more and more of the studio greenlight projects, particularly expensive ones, will be done with a decreasing interest in American popularity. And that, in turn, could mean that long term (2015 has a strong overall lineup), this decreasing priority could contribute to an ongoing flatness in domestic theater grosses as the top product isn’t made with them as the main target.
The ten top-grossing domestic films don’t look much different from 2013 — seven sequels and/or comic book related films. The other three are variations on pre-existing properties (“The Lego Movie,” “Maleficent” and Marvel comic “Guardians of the Galaxy”). 2013 had eight sequels, plus an original story (“Gravity”) and fairy tale “Frozen.”
But the total gross of the top ten domestic films dropped among 2014’s 15%, while internationally they increased 4%. This suggests that the studios should have no incentive to keep foreign markets as their prime concern in their production choices. Normally the greater division of domestic spoils might suggest a healthy encouragement of diversity. But with overseas business growing, the emphasis more than ever is going to be what the world, not Americans, want to see. Those films that might have more domestic appeal (centering on minorities, women, political issues, original stories, adults) will get made, but at decidedly lower budgets and in decreasing numbers. The result, again, could mark a continued lack of sustained growth, as well as the rush of top talent to cable, Netflix, Amazon and other increasingly aggressive platforms.
2. Attendance is down among young males.
Despite the dominance of franchise/comic book films, the anecdotal evidence from 2014 is that the biggest dropoff in audience interest came from the demographic that has been (along with families) the most reliable — males between 15-24. This was most evident with the latest “Transformers,” down $107 million from 2011 (while foreign climbed $70 million). The horror genre, long a strong young male draw, fell from around $630 million in 2013 to under $470 last year. (Indeed the biggest horror success, “Annabelle,” opened with a 51% female audience).
But the drop wasn’t solely from male-oriented films. 2013’s top grosser “The Hunger Games: Catching Fire” totaled just under $425 million. “Mockingjay: Part 1” will end up under $340 million for best-of-year, but down $85 million+. Both year’s second bests were Marvel Comics-based, but “Guardians of the Galaxy” did $333 million, compared to “Iron Man 3″‘s $409 million. And animated films were down about 30% in 2014 (about $470 million) despite seemingly surefire sequels and the absence of competition from a Pixar entry.
The strong turnout was among older audiences over a wide range of films. That’s a positive. But younger audiences falling out of the habit of movie going might not return as they age. 2015 and its on paper stronger line up gives temporary hope, but they have yet to prove that they’ll live up to expectations.
3. “The Interview” explored high-end home viewing.
“The Interview”‘s limited but still high-end Video on Demand parallel release, which scored some $50 million in ultimate home viewing, was not a one weekend wonder. Sony joined Warner Bros., which went VOD and theaters together on “Veronica Mars” in March. And in the middle of the whole “Interview” discussion, Warners announced that Ryan Gosling’s directorial debut “Lost River” is going the same route this spring. Curiously, they broadcast it as an alternative business move rather than dumping a lost-cause movie. And a day after, they quickly said, yes, it will have a theatrical component as well.
4. Domestic theaters got hurt.
The ones hurt most last year were domestic theaters (revenues down, and the greater drop in ticket buyers affected concession sales). Total tickets sold have dropped by one-sixth since the recent-decades’ high mark in 2003 (and population is up 10% in that period). It’s hard to regard moviegoing as a growth industry.
The uncertainty about studio intentions about VOD (as well as Netflix’s initial forays into feature film originals) are far more disconcerting to exhibitors than the 5% total gross drop. 2014 was a decidedly mixed bag.
5. The studios did fine.
The studios did better on two levels. Though total combined totals have not yet been calculated, it appears that total worldwide gross remained at least level. The other is a reduction of costs. 2013 had 15 titles with budgets over $150 million, 2014 had 12 (over $100 million, 26 down from 31) and better yet, none had the huge losses suffered by several the previous year. Studios are still coping with the decline of DVD and Blu-ray sales, but last year found them aggressively maximizing in particular early pay-per-view cable and other home platforms.