Since our last box office update, we’ve seen the weekend opening of 2024’s first blockbuster Dune: Part Two ($81M) which received rave reviews (94% on Rotten Tomatoes), as well as the earnings from AMC Entertainment, Warner Bros. Discovery, and Paramount (which is subject to a number of carve-up rumors). The conclusion from the latest is support for our viewpoint that the box office will be soft for the first half of 2024--something our early 2024 visitation data supports--the result of fewer releases stemming from last year’s strikes.
Great content can get people off their couches and into movie theater seats (Dune 2’s opening doubled its predecessor) but is also difficult and episodic. The legacy linear TV business and its drag on media holding companies (Warner Bros. and Paramount) continues to grow heavier, which inhibits their ability to invest in more great content and makes for a worsening problem for the exhibitor industry beyond 2024.
AMC’s Q4 2023 earnings report revealed stronger-than-expected attendance, revenue growth (+10%), and market share gains (+120 basis points). Comparing AMC's results with our visitation data suggests that AMC’s large footprint in dense markets like New York City produced outsized attendance gains. The quarter’s unique programming--Taylor Swift and Beyonce for which AMC was the distributor and which played long in premium large format (PLF) theaters (AMC has 50% of the IMAX screens in the U.S. and 100% of the Dolby's)--resulted in its outsized market share. In terms of future concert movies, AMC CEO Adam Aron said, “I can confirm to you today that we are now in constant touch with others who are speaking with AMC to also distribute the movies of more world-class musical artists for later in 2024 and/or 2025. This blending of great musicians and movie theaters is an innovation for AMC that should and will continue into the future.”
Aron continued, “But we'd make no mistake about it. As pleased as we are with the movies that we distributed or as pleased as we are with our entire results for the entire year of 2023, 2023 did not live up to its full potential. That's because the many months of actors' and writers' strikes crippled Hollywood. And they seriously hurt movie theater operators who have been forced to wait for delayed movie titles that shifted out of 2023 into future time periods. After 3 years of hard work by one and all after theaters were closed back in 2020, the domestic industry-wide box office finally was in sight of pre-pandemic levels back in the summer of 2023. At the peak of the summer of 2023, the July 2023 domestic box office was actually up 6% above July of 2019...Clearly, moviegoers flock to theaters when Hollywood releases films in quantity and in quality. Just think Barbie and Oppenheimer or for that matter...But the strike of 2023 clearly interrupted that momentum that was pushing us to above pandemic norms in the middle of last year. The strikes in Hollywood led to the fourth quarter domestic industry-wide box office being down 35% versus pre-pandemic 2019.” In response, AMC will close theaters that don’t perform and look to become a bigger distributor for both concert movies, events, and non-feature films, cutting out the smaller distributors.
