Summer 2016 had a hard act to follow. Last summer had “Jurassic Park” ($652 million), “Avengers: Age of Ultron” ($459 million), and “Inside Out” ($356 million) leading the way, which contributed to a record-breaking year of more than $11 billion.
Early numbers show $4.25 billion for the summer, which isn’t bad; it’s down about 4% from last year, and this summer is one week shorter due to a normal calendar shift. However, a closer look reveals real concerns. There’s the number of expensive flops, but others are deeply rooted in near-term future studio plans. That suggests a risky future for filmed entertainment that depends on theaters (and that theaters depend on).
So, what’s the trouble?
The box office may have declined by 4%, but attendance fell twice as much.
Theaters have steadily increased ticket prices, with a big push last December in anticipation of “Star Wars: The Force Awakens.” Adjusting for the price hike, the number of tickets sold fell closer to 8-9% from last summer. That’s a significant drop. Compared to 2013, the best of the last decade in attendance, it’s down 18%. Ouch.
It cost a lot more to earn that box-office return.
A rough calculation of the wide releases’ budgets comes to about $3.4 billion. In 2015, which had better grosses and attendance, summer movies cost $2.5 billion. At nearly $1 billion less, that’s a 26% increase in production costs. Yes, the budgets came with expectations of increasing foreign revenues, but also with the hope that domestic revenues would follow suit. They didn’t.
The momentum stalled.
From “Star Wars: The Force Awakens” to “The Jungle Book,” December through April saw the five top films collect domestic grosses over $300 million. (The others were “Deadpool,” “Zootopia” and “Batman v Superman: Dawn of Justice.”) A year earlier, the same period saw only two openers (“American Sniper” and “Furious 7”) reach the same level. That performance had 2016 trending above 2015 by more than 9%, and suggested that the massive success of “The Force Awakens” was bringing audiences back into theaters.
Now, the summer of 2016 has depressed that year-to-date increase to just 6%, and it’s likely to get much worse. Fall and Christmas have their share of highly anticipated films, but let’s not kid ourselves: To top 2015, the rest of the year would have to make up for the $652 million the “Star Wars” reboot earned in its first two weeks, as well as finding films that equal or better $200 million+ fall successes like “The Martian,” the final “Hunger Games” films, and the most recent James Bond.
Playing it safe was dangerous.
Spiking familiar formulas — the R-rated “Deadpool,” pairing Batman and Superman — elevated recent hits. The high stakes, and costs, of summer limits risk taking; so do franchises and remakes (close to 20 this year). Some thrived (see: “Captain America: Civil War,”$408 million), but the latest efforts around “Star Trek,” “X-Men,” and “Bourne” only saw two-thirds of their best past grosses. “Teenage Mutant Ninja Turtles” and “Independence Day” sequels were floppy. And the competition among so many would-be tentpoles may have ensured that no one stood out.
Without animation, things would be so much worse.
Even more than comic-book movies, the 21st century movie industry is dominated by animated films. At $482 million,”Finding Dory” takes top spot for the summer, with “The Secret Life of Pets” third at $360 million. This year, three other animated releases (led by “The Angry Birds Movie” at $107 million) totaled just over $1 billion. Meanwhile, the total gross for live-action movies is $550 million less than last year. That’s a decrease of 15%.
The great news is animation hasn’t approached a saturation point, and it’s introducing the moviegoing habit to a new generation of kids who will be needed to sustain it in the future. But if cinema, particularly in theaters, is to sustain itself, live-action needs reinforcement. With so many top creative people transitioning to opportunities in home-viewing venues, mass-market creativity looks more challenged than ever.
Comic Book Movies Held Steady, But Can They Be Sustained?
Marvel’s “Civil War” and “X-Men: Apocalypse,” and D.C. Comics’ “Suicide Squad” took three of the top six slots for the summer. Their $862 million total is ahead of last year when “Avengers: Age of Ultron,” “Ant-Man,” and “Fantastic Four” totaled $695 million. What’s impressive is “Deadpool” and “Batman v Superman” might have already sated the market, with the latter leaving a bad taste as overhyped and under-realized. That makes the summer performances, particularly “Suicide Squad,” more impressive.
These franchises are more important than ever to sustaining gross levels. Their expense leaves no margin for error. But worldwide interest, like animation, seems still ascendant (though it’s disconcerting that neither “Deadpool nor “Suicide Squad” received a Chinese release).
So the net news here is positive, but the question marks are greater. A couple of big failures could be game-changing.
When they flopped, they flopped harder.
2015 had only two big-budget duds, “Tomorrowland” and “Fantastic Four.” In 2016, where do we begin? “Ben-Hur,” “The BFG” and “Ghostbusters” lead the list. Much better foreign results will reduce losses for “Independence Day: Resurgence,” “Alice Through the Looking Glass,” “Teenage Mutant Ninja Turtles: Out of the Shadows,” with foreign successes eking out likely profit for “Warcraft,” “Now You See Me 2” “The Legend of Tarzan,” and “Ice Age: Collision Course.”
With films at these budgets, grossing over $100 million isn’t even a bragging right; it’s supposed to be a matter of course. However, of the 15 big-budget movies, only nine crossed $100 million at the domestic box office.
Movie financial analysis site The Numbers puts it another way: Among 32 summer movies released by major studios, 17 lost a total of $915.6 million. (Last year, according to The Numbers, the studios released 15 bombs for a total loss of $546.3 million.)
Yes, foreign revenues keep increasing, and films like “Warcraft” and “Now You See Me 2” (the latter cost just under $100 million) did well enough to justify sequels thanks to their Chinese appeal. Still, this is the biggest black mark on the summer. It portends more summer movies that appeal less to Americans, and thus bring down overall grosses at home.
Smaller films showed their risks.
One supposedly positive sign was the success of some films with lower production costs (under $50 million). Certainly “Bad Moms” (the breakout hit from STX) and “Central Intelligence” — both of which will end up with over $125 million domestic and ultimately in the summer’s Top 10 — are good news. So was the horror/thriller genre; “The Conjuring 2,” “The Purge: Election Year,” “Lights Out,” “Don’t Breathe,” “The Shallows,” and “Nerve” all made over $50 million, with a couple at or headed toward $100 million. “Sausage Party” was (notoriously) made for $20 million and will come close to $100 million; “Me Before You” will make $200 million worldwide.
It’s important to tout these successes, but no one should assume the results are good enough to make studios feel compelled to rush into more. However low the production costs, marketing often adds $30 million or more. And most appeal primarily to domestic audiences, which increases the studio risk. That’s why STX ended up with “Bad Moms.”
Specialized held its own.
Summer isn’t considered as prime territory for specialized audiences. What is easily the year’s biggest specialized success so far, “Hell or High Water,” should end up making $30 million-$40 million range, and potentially even higher. That’s terrific for off-season, and strong at any time. “Spotlight” only reached $45 million, and “Room” didn’t even manage $15 million — and those films won two of the top three Oscars.
What looks more encouraging from this summer’s top releases (apart from “Hell,” the other two over $10 million are “Love and Friendship” and “Cafe Society”) is they did it on their own; prior to this summer, the only specialized titles that made more than $10 million were “Eye in the Sky” and “Hello, My Name Is Doris.”
In assessing the summer’s grosses and trying to look at them through the eyes of those in the business making decisions, one can make a case for multiple strategies, often contradictory, in planning ahead. There is evidence for different directions. Certainly nothing conclusive comes from it other than to try harder to control budgets. But that’s tough when worldwide business still is steady and bigness still matters when appealing to broad audiences.
But it is hard to overlook the blandness in many of even the successful films and worry that more summers like this will bring diminishing returns. How many summer titles were elevated to the level of social media that streaming/cable programs like “The Night Of” or “Stranger Things” or interactive events like “”Pokemon Go”? None that I can think of, even with some major hits.
The best news for movies is that in the wider world they seem to be holding their own better than network TV, including the Olympics (which despite their sharp viewing decline still had some August impact). But the footing is uncertain at best with no guarantees ahead.
Source for grosses: Box Office Mojo