In early July, we wrote that it would be a stretch goal for the Q3 2023 box office to reach its pre-pandemic level of $2.7B given the softer performance of films in June. Since writing that piece, there have been three dramatic plot shifts: (1) Barbenheimer; (2) the Hollywood strikes; and (3) the Taylor Swift and Beyonce tours hitting the theaters. The Barbenheimer phenomenon was a huge boost to Q3 2023, the strikes a significant hit (no promotion of films by their stars), and the tours will boost Q4 2023 (which is a big help given that delays from the strikes moved several large releases into 2024). All told, the Q3 2023 box office of $2.6B came within spitting distance of the $2.7B stretch goal, which we would judge as commendable. Moreover, it's in the range of the years prior to 2019.
Looking at the Q3 2023 box office statistics and Placer visitation (below), it’s clear on a sequential basis that AMC Theatres drove an outsized gain in market share, despite having the largest market share. Readers will know that AMC accomplished that outperformance by having the largest number of Premium Large Format (PLFs) screens--such as IMAX screens--in the industry and people wanted to experience Barbenheimber in a premium format. This is particularly apparent when looking at the sequential gains for the big three exhibitor groups versus the attendance declines for the “other theaters” segment. Additionally, Regal and AMC have been on a lag in their recovery relative to Cinemark and during 2023 have been catching up; that “catching up” has allowed AMC to post faster growth rates then Cinemark. (Regal just came out of bankruptcy and has a different reporting cadence, as such, the numbers show are just estimates as there have been no reported numbers.)
Looking at Q4 2023, big releases include the music tours, The Marvels, and the Hunger Games prequel. Films opening will still be held back in their potential box office as their stars are prohibited from promoting them until the actors’ strike is resolved. No such restrictions apply to Taylor Swift and Beyonce, and they are firing up all their promotional channels. Reflecting that firing up, a press release from AMC shows that the Taylor Swift: The Eras Tours is significantly outstripping Barbie. Presales for the opening weekend now have 4,200 showtimes sold out, out of 13,000 showtimes. By contrast, only 500 of Barbie’s opening night showings were sold out.
Looking at 2024, there are a number of tailwinds assuming a resolution to the actors' strike in the next month. These include: (1) the release of some of the bigger releases that were pushed into the year, including Dune; (2) a fired-up industry that wants to get the magic on in terms of celebrating the industry and new releases; and (3) a good slate of tentpole films that were already scheduled for the year. Headwinds to the year include: (1) lingering delays from the strikes; (2) the absence of the Taylor Swift/Beyonce tours; and (3) potentially softer consumer spending, but as 2023 demonstrated, there are unpredictable X-factors that may come to assist. Assuming that the 2023 box office produces $9B, such a figure would seem to be a reasonable stretch goal for 2024. That compares to 2019’s $12.5B level, and as such, the industry still has ample recovery runway in front of it. However, as always, the films need to inspire, surprise, and delight audiences. Favored releases include Deadpool 3, Captain America 4, Despicable Me 4, and Lord of the Rings 4.