“Avatar: The Way of Water” (Disney) was a magnificent way to end the year, and to begin a new one. Since its December 18, 2022 release it’s grossed $465 million in U.S./Canada. It could overtake “Top Gun: Maverick” (Paramount) as the top 2022 domestic release, which grossed $719 million. It’s certain to become the biggest worldwide grosser since Covid began decimating the theatrical business nearly three years ago.
But “The Way of Water” doesn’t change the current reality any more than “Maverick” did, which is this: In the last four years, theatrical attendance has declined by about 50 percent.
Paramount/Courtesy Everett Collection
Box office for 2022 ended a little under $7.4 billion domestic, with $26 billion worldwide. That fell far short of the year’s weakest projections, a consensus first stated in December 2021 by financial analyst Gower Street and repeated widely in the media: $9.2 billion domestic and $33.2 billion worldwide. Last March during a quarterly financial call, AMC Theatres CEO Adam Aron said “We are quite bullish that for the full calendar year of 2022 the industry box office could be nearly double that of 2021″ — that is, about $8.8 billion domestic. On those bases, we have shortfall of somewhere between 20 and 25 percent.
As for calculating that attendance drop: The last full pre-Covid year of 2019 generated a domestic box-office total of $11.3 billion, down from $11.9 billion in 2018. Those numbers came at lower ticket prices, by approximately 20 percent or more. (Exhibitor trade association NATO still declines to announce a current average ticket price, which it has not updated since 2019.)
Based on today’s admission costs, the 2018 domestic box-office total would be over $14 billion. Back out of the totals to calculate admissions, and we reach a dire conclusion: Theatrical attendance in 2022 is about 52 percent of 2018. The massive success of “Maverick” and “The Way of Water” — not to mention no official tracking of actual admissions — tends to obscure that reality.
In 2022, even Cinemark — the major exhibitor with the strongest financials — saw its stock drop 47 percent from the start of the year. AMC added the APE offering to its original stock and its per-share price dropped almost 80 percent in 12 months. At the height of its mid-2021 meme stock glory, it was more than $59 per share. London-based Cineworld, which owns #2 Regal, has filed for bankruptcy.
The current business reflects neither the financials nor the trajectory that would allow a handful of massive hits to return exhibition to “normal.” Certainly, 2022 suffered from a lower-than-normal number of releases; 2023 should have more. As usual, they are franchise-heavy, and it’s unlikely that we’d see a potentially big title like Disney/Pixar’s “Turning Red” skip theaters for streaming. At the same time: Many films that thrived in 2o22 benefited from fewer competitors; that also boosted the biggest hits.
Studios judge risk as much as opportunity and the 2022 holiday season showed us, again, we now live in a world where films have expanded their capacity to fail. Pre-Covid, four to five December releases would gross $100 million or more. This year, there’s “The Way of Water.” The grosses for two prime releases — “Whitney Houston: I Wanna Dance with Somebody” (Sony) and “Babylon” (Paramount) — might reach $40 million combined. Initial platform results for Tom Hanks vehicle “A Man Called Otto” (Sony), originally intended to go wide at Christmas, shows that releasing a film with a major star doesn’t guarantee audience. Results like those discourage increased production.
DC Comics’ “Black Adam” (Warner Bros. Discovery) grossed just under $400 million worldwide. The studio’s decision not to proceed with a sequel — even with the full-throated support of star Dwayne Johnson — suggests even franchises remain risks.
As studios reckon with a streaming world that’s started to show its tarnish, expect theatrical potential to remain the primary driver of greenlight decisions for theatrical releases. That’s something of a victory for theaters, as is the fact that some riskier original films like “Where the Crawdads Sing” (Sony) and “Ticket to Paradise” (Universal) likely turned a profit. (It speaks to the current situation that a best-selling novel adaptation and a rom-com starring Julia Roberts and George Clooney are considered risky).
Total box-office estimates for 2023 are more conservative. Per distribution sources, the general consensus is $9 million domestic (After last year’s misplaced enthusiasm, Gower Street is a bit lower: It projects $8.6 billion.). That would represent an 18 percent improvement in revenue; in attendance figures, business would still be down 30 percent from 2018. Is that enough for theaters to survive — or at least, not add more debt?