WSJ US BusinessMovie Theaters Plot Revival as Americans Show Up for Blockbusters

August 14, 20220
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America’s movie theaters are enjoying a happy plot twist for a change.

The summer movie season is wrapping up with several blockbusters. Studio executives are signaling a commitment to the big screen. And the ravaged landscape of closed theater chains that many predicted two years ago hasn’t come to fruition.

“There’s no question that we’re coming back—in relevance, and in actual behavior,” said Jeff Goldstein, president of domestic distribution at Warner Bros.

Movies such as “Top Gun: Maverick,” “Minions: The Rise of Gru” and “Jurassic World Dominion” have shown this summer that audiences will return to the auditorium for films they want to see. The enthusiasm for movies adds to the list of prepandemic experiences people are embracing, such as going to concerts, gambling in casinos and traveling aboard airplanes.

And studio chiefs are indicating to shareholders that they want to emphasize theatrical releases now that audiences are leaving the house, especially as streaming growth in the U.S. stalls.

The summer box office through Aug. 7 sold about $3.03 billion worth of tickets, according to Comscore Inc., more than double last year’s haul but about $600 million behind the industry’s seasons in 2018 and 2019.

The question is whether momentum will last for movies amid a looming movie shortage and inflation pressures on consumers.

‘Top Gun: Maverick’ is now the seventh-highest grossing movie in U.S. history.

Photo: Paramount Pictures

The comeback of movies isn’t the future many in Hollywood expected when Covid-19 threatened the existence of cinemas. When governments and businesses shut down most social activities in March 2020, chains laid off thousands of workers—and even sold popcorn curbside as a way to make money.

Inside Hollywood, executives wondered if moviegoing would ever return to a semblance of normalcy, especially after months of quarantine orders drove Americans to streaming services. The summer box office of 2020 sold about $91 million worth of tickets. So far this year, the opening-weekend hauls of six movies have exceeded $91 million.

“Would we ever get back to sitting in a theater with other people again?” Brian Robbins, chief executive at Paramount Pictures, said he remembers thinking. “It was very scary.”

That was the reality faced by the owners of Warehouse Cinemas, a 10-screen multiplex in Frederick, Md., that opened in September 2020, six months into the pandemic.

“Sort of bad timing on our part,” said Warehouse Cinemas CEO Rich Daughtridge.

But today, Mr. Daughtridge is coming off a solid quarter at that location, renovating a second and opening a third—an expansion that will bring his total screen count to 27.

Theaters broadly have so far survived. Nationwide, the number of screens has fallen slightly since 2019, from about 41,200 then to 40,700 today, according to the National Association of Theatre Owners. That number is expected to drop in the coming months, however, when operators who have relied on government subsidy payments during the pandemic might struggle to stay open.

Movies such as ‘Minions: The Rise of Gru’ have shown this summer that audiences will return to the auditorium for films they want to see.

Photo: Universal/Everett Collection

Looking ahead, other potential challenges lurk. The coming film schedule is thin before superhero fare such as “Black Adam” and “Black Panther: Wakanda Forever” hit screens in the fall. Mr. Daughtridge in Maryland is seeing increased foot traffic on Tuesdays, when his circuit offers discounted tickets—an indicator, he suspects, of recessionary spending patterns.

The executives who decide where movies premiere are touting the big screen to investors. Creating expensive movies and releasing them to at-home services make less sense today, said Warner Bros. Discovery Inc. CEO David Zaslav.

“We can’t find an economic value for it,” he said. “We’ve been out in the town talking about our commitment to the theatrical exhibition.”

That is an about-face from the company’s previous approach, which angered some agents and actors in Hollywood when it simultaneously offered 2021 theatrical releases on the company’s HBO Max service.

Paramount Global CEO Bob Bakish told investors earlier this month that his company’s studio had postponed several titles until consumer behavior changed.

“We held off because we knew these phenomenal stories would bring audiences back to theaters. That proved to be the right call,” he said.

By the end of the year, the 2022 box office will likely finish slightly higher than $7 billion, which would be about two-thirds of what could be expected in prepandemic times, said Mr. Goldstein at Warner Bros.

“What the audience is clearly telling us is they love the big-screen experience, but not for every movie,” said Mr. Goldstein.

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No movie made a better case for theatrical release this year—or even this decade—than Paramount’s “Top Gun: Maverick,” the Memorial Day release that had been delayed several times because of the pandemic. The sequel to the Cold War classic is now the seventh-highest grossing movie in U.S. history, recently passing “Titanic” on the chart.

And “Top Gun” has drawn audiences in much longer than a typical movie. Since it opened, the movie has registered an average weekly decline in sales of 24.3%—among the healthiest long-tail performances of all time. Walt Disney Co. ’s “Doctor Strange in the Multiverse of Madness”—a solid 2022 performer with $411 million—dropped an average of 51% in its first 10 weeks of release.

“Before we released the film, our biggest concern was: Can we get the generation that didn’t grow up on the film?” said Mr. Robbins of Paramount. Since then, the audience has expanded to include younger crowds, women and older moviegoers who had been reluctant to return to auditoriums, he said.

Tara Curtis, a 51-year-old communications professional in Morgantown, W.Va., said she had averaged one or two movies a month before Covid-19. But during the pandemic, she grew accustomed to watching movies on TV and has since been more discerning. “Top Gun: Maverick” was the first movie to draw her back to a theater.

Ms. Curtis has since gone back to see it a second time, taking her parents with her for their first return to theaters.

“I enjoy the theater experience,” she said. “I guess I’m a little old-school when it comes to that.”

Write to Erich Schwartzel at erich.schwartzel@wsj.com

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