Will we ever go back to the movies?

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In this issue

Forecast: Will Avatar 2 be one of the top 10 US movie openings of all time?

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What was your last great movie theater experience? If you can’t remember one, you’re not alone.

Americans aren't going to the movies like they used to and the fate of the movie theater business is an open question. Will theaters continue to decline post-pandemic, replaced by straight-to-streaming and the comfort of the couch? Or was the pandemic a blip? Maybe movie theaters will bounce back. Or maybe this is the moment theaters evolve, creating new experiences that can’t be matched at home.

These theories will be tested later this month, when Disney’s Avatar: The Way of Water hits theaters in 3D. The original was the highest-grossing movie of all time and a major moment in theater-going.

In 2022, in the age of streaming, will people flock to theaters to see the sequel?

Avatar 2 is projected to gross between $150 and $200 million in its opening weekend. $200 million would make it #1 for opening weekends this year, and would crack the top 10 for opening weekends ever.

This week’s forecast is a check-in on the future of movie theaters:

How likely is it that Avatar 2 grosses $200 million in the US on its opening weekend?

Background

Disney’s acquisitions of Pixar, Marvel, and Lucas Films, completed between 2006 and 2012, ushered in the era of superhero movies. Studios stopped making mid-budget movies and the formula for success became intellectual property—known characters with sequel potential—plus big stars and bigger budgets.

Then the pandemic shut down the movie theater business almost overnight. US box office revenue fell 81% in 2020 from the prior year. 2021 was not much better.

During the pandemic, studios experimented with sending movies straight to streaming. Movie theaters claim that model is now “dead,” post-pandemic. But consumers really like it, and studios are hedging their bets with some films still slated to premier on streaming. Despite a strong opening weekend at the box office, Netflix chose to give its “Knives Out” sequel only one week in theaters before releasing it to stream.

Avatar 2, which premiers in theaters Dec. 16, will be a major test for the movie business. It’s the sequel to the top grossing movie of all time, released in 2009, and like the original it will be shown in 3D. It’s also one of the most expensive movies ever made and director James Cameron has admitted it will need to be one of the top grossing movies in history just to break even. The release is also a major test for Disney, which owns the franchise.

Perspectives

People like direct-to-streaming

“US consumers largely prefer movies to be released in theaters and on streaming platforms at the same time… Three in 5 consumers said they’d rather watch movies at home via streaming services… Despite consumers’ preference for streaming, they were equally clear that they at least want the option to see films in theaters… Among genres, action films were the only genre consumers said they would rather see in theaters.” —Sarah Shevenock, Morning Consult, May 2022

“It’s unclear whether the audiences will return to theaters in those same numbers that will generate the kind of box office that Disney needs to justify the spending… There’s a real risk here that during the pandemic, families got socialized to expect high-quality first-run animated movies on streaming… Even something like Encanto... wasn’t a hit until it went to streaming.” —Matt Belloni, The Ringer, Nov. 2022, speaking of Disney’s animated movies

And they’re (arguably) getting tired of superheroes

“The share of adults who said they enjoy superhero movies dropped 5 percentage points from 64% in November [2021] to 59% in a late July [2022] survey... The share of adults who do not enjoy superhero movies jumped 5 points in that time, from 36% to 41%. That share has increased 9 points since a 2018 survey.” —Saleah Blancaflor, Morning Consult, Aug. 2022

Movie theaters have been threatened before

“My outlook on movie theaters is: They’ll keep changing—higher prices, bigger screens, better sound, softer chairs—not die. Adaptation in the face of tech change is the history of theaters… TV should have killed them; instead it just changed them.” —Derek Thompson, Jan. 2022

“The theater of the future may be a quasi-theme park: indoors, with interactive media experiences instead of rides. You’re not only there to see a movie, but also to engage in other live, in-person events that can’t be recreated at home.” —Adam Epstein, Quartz, Dec. 2020

Does Avatar have enough fans to succeed?

“[Avatar 2] is being comped against holiday fanboy titles, and the numbers that are being seen need to be taken with a grain of salt. Avatar isn’t a front-loaded opening weekend fanboy movie, it’s one that will play and play. A $150M opening is 95% ahead of the original 2009 title’s $77M." —Anthony D’Alessandro, Deadline, Nov. 2022

Indicators

US adults are more likely to say they've gone to zero movies in theater in the past year.

US annual box office revenue declined precipitously during the pandemic.

7 movies have had top-50-all-time opening weekends since the pandemic started.

Forecast

How likely is it that Avatar 2 grosses $200 million in the US on its opening weekend?

The fine print...

Just want to make a quick forecast? Click a link above and you're done! Your forecast will be recorded.
Or, click a link and finish the survey. You can make your forecast more precise, guess what other readers will say, and give your opinion on the future of movie theaters.
Deadline: Make a forecast by 9am Tues. Dec. 6.
Resolution: This question will resolve based on Box Office Mojo data for the weekend of 16-18 December 2022.

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Will we ever go back to the movies? 🎬