Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with S&P Global Market Intelligence. Welcome to MediaTalk, a podcast hosted by S&P Global, wherein the news and research staff explore issues in the evolving media landscape. Today, I'm joined by S&P Global Market Intelligence Kagan Senior Research Analyst Wade Holden, who specializes in the box office and the movie business. How are you doing today, Wade?

Wade Holden: I'm doing well. How are you?

Mike Reynolds: Good. Thanks for joining us. Wade is going to be kind enough to share his thoughts on the box office performance in 2023 as the industry continues its recovery from the pandemic shutdown in 2020. He'll talk about some of the top films and trends. He's also going to bring us up to speed on early returns so far in 2024. And A little bit of a look ahead to what summer will bring for all of us at the theaters. Anyway, let's get right to it. Super Mario Brothers, Barbie Oppenheimer, the latest Avatar movie — 2023 was a good year for the box office. What fueled the growth? And I guess things have been continuing in that right direction since the pandemic?

Wade Holden: Yeah. It's a very promising year as far as the recovery from the pandemic goes. And I think it's a combination of the right titles, people enthusiastic about the films that were put out and I think also the windowing experimentation that was prompted by the pandemic had ended. Studios settled on the 45 day release window for theaters exclusively for the most part and understood the importance of having that exclusive window to drive demand and excitement for these major motion pictures. And I think audiences not being able to just sit back and stream it from their couches the same week it was in the theaters prompted a lot of people to enthusiastically get back to going to see movies.

Mike Reynolds: I think that's a good thing. I'm just wondering, do you expect or anticipate in the years to come that the theatrical box office can rival the numbers were produced going back into the last decade into 2019?

Wade Holden: Prior to the pandemic, we were still seeing a somewhat downward trend in admissions anyways. And a lot of what was prompting growth in the industry was rising ticket price averages and, I think that's what we'll see happen. There's just a massive amount of entertainment options out there for people these days. And being stuck at home and turning towards digital entertainment services has created a savvy group of people who understand a little bit more about windowing than maybe they had in the past. And I think there's just going to be a group of people now who are content with waiting to catch it on the streaming service that they're subscribed to if they're able to. But that being said, I don't think theatrical exhibition will ever go away. It's too important to the industry. It's the way these filmmakers imagine their films being seen. They shoot it to be seen in that format. And I think still inherently there's a joy that comes from the communal process of going to a theater full of people and watching these films. And I think it's just, it has to be certain types of films that are able to draw people. Genres that maybe were able to do a lot better — comedy, dramas —don't do what they used to do because I think there is a group of people who are like, "Oh, I saw that trailer. I think that's a wait-to-watch-it-at-home movie." So I don't think it's gonna go away.

Mike Reynolds: Right. Now, again, I think we all like you said, they're filmed in a big way. It's fun to sit with others and enjoy the spectacles that are out there on the big screen. We'll be keeping tabs on that as we go forward. I think last year, there were, I think, 24 or 25 films that passed the $100 million in domestic box office. How does that kind of stack up into years past, Wade?

Wade Holden: It's very comparable to pre-pandemic times having films past a hundred million mark. So yeah, that was a very positive sign having the top 25 films at $5.75B dollars combined for our box office calendar. Yeah, so I think that, that coupled with how the summer season did, it really gave hope that things are recovering.

Mike Reynolds: Any films that surprised you whether, really outperformed or underperformed in terms of what you might've thought? A lot of people talk to the Taylor Swift Eras tour concert as that thing was just gangbusters.

Wade Holden: Right? The Taylor Swift concert, it was interesting. It's interesting that it made so much money when they had the different release pattern of only being Thursday through Sunday. Yeah. So cutting a few days out of the week was something new. On a personal note, if you would have told me that Barbie and the Super Mario Bros. movie were going to be the top two films of the year, I would have looked at it and been like there's like a Guardians of the Galaxy and there's a Spider Man and Avatar is still rolling. Are you kidding me? But yeah, part of the joy of the business is the surprises that you get. On the others, another kind of surprise was "Five Nights at Freddy's" making the $137 million that it made when that was a film that was released simultaneously on Peacock. So the fact that that had the box office legs that it had when people did have the option of just staying home and watching it — that was pretty surprising.

Mike Reynolds: Interesting. Speaking of NBC, I think they set the box office pace overall as a studio; and Disney from the distribution side, they've been on top of that for the last three years running?

Wade Holden: Correct. Yeah. But Disney benefits from also owning 20th Century Studios … a big chunk of Avatar's total box office gross came in 2023. And they have Searchlight Pictures. So being able to add those together with the Walt Disney Studio Motion Pictures — those three combined to outgross universal. So Disney was to just over $2 billion in total gross between its three studios. And then the Universal Studios as Universal Pictures separately, it outperformed all other separate studios.

Mike Reynolds: Let's turn our attention a bit to this year. 2024 maybe off to a little slow start through the early part of this year.

Wade Holden: Yeah. We're really seeing the effects that the Hollywood strikes in the latter half of 2023 have had on the production schedule. And it caused a down winter season in 2023 as films that were supposed to be released then got pushed back. So there was some content for the beginning of the year. So right now, through the first five weeks of our box office calendar, total box office is down almost 28%. Pretty much no huge sort of tent pole franchise release. But I think a lot of eyes are really just looking at when Dune Part 2 comes out. And yeah, it's just Disney doesn't even have a major picture coming out at all this quarter. Its strategy was to re-release those Pixar films that were put on Disney+ during the pandemic that didn't have a theatrical release and just getting those out there for audiences to watch. So I think come March we'll start seeing some bigger pictures with the new Ghostbusters sequel, another Godzilla/Kong movie. And I think maybe we'll start to see things pick up, but right now I think the expectation is that we could actually probably see a little bit of a step back in total box office this year just because of the effects of the strikes.

Mike Reynolds: Yep. One of the pictures early this year, Argyle, I think there was some high hopes for it. I think Apple might have paid about $200 million dollars for distribution rights. It hasn't worked

Wade Holden: Right, yeah, $200 million for the rights. And then I've also seen around $80 million in marketing costs for the release. I think it was a gamble. This is a genre-type action film. It's Matthew Vaughn, he's been known for the Kingsman film series, and the returns on those have been dwindling with each successive film. Maybe the appetite for it just wasn't there. I think maybe the premise was just a little too out there for the general audience. It's pretty complicated. But yeah, it's interesting. Taking that big of a swing. And it could come down to that people, again, the savvy consumers right, are realizing, oh, this is gonna be on Apple, very soon. I believe when I fired up my Apple TV, it was a big splash. So the day that Argyle was in theaters, it was like "Argyle coming soon to AppleTV."

Mike Reynolds: I know, I saw the same kind of promo. Let's turn our attention to the summer. I think last year the business grew like over 19%, over $4 billion getting back to pre-COVID levels. What's your anticipation for this summer and some of the big films we're going to look at?

Wade Holden: I think there's a lot of potential to hit that number again. We are kicking off with Kingdom of the Planet of the Apes, so we got another one in that cycle. The franchise has done well. And Memorial Day, you have the Furiosa movie, and then you're looking at Inside Out 2 and Bad Boys 4, and then things really get big in July with Despicable Me and Twisters and Deadpool 3. Yeah, I think there's there's quite a bit to be excited about for this summer. And I, think there's going to be some interesting hits in there that maybe we weren't expecting. I'm personally looking forward to the Bike Riders. I think it's a very interesting looking film I'm excited to watch that.

Mike Reynolds: Anything else on your radar that you definitely plan on going to?

Wade Holden: I'm actually very interested in April with Dev Patel's directorial feature Monkey Man. That looked very interesting. I'm very excited about the second part of Dune, but that's the sci-fi nerd in me. Looking further I'm very interested in what they're going to do in expanding the Lord of the Rings film universe with The War of the Hero. So a lot to look forward to this summer.

Mike Reynolds: All right we've reached our time here. I just wanted to thank Wade for spending a lot of time sharing his sensibilities to the marketplace overall, some of his personal things that he'll be visiting the theaters too. So Wade, thanks very much.

Wade Holden: You're welcome.

Mike Reynolds: All right. This is Mike Reynolds. Thanks to all of you for listening. We'll catch up soon on the next edition of MediaTalk. Thanks.