Welcome. This is officially “Smells Like B.O” (or “Smells Like Box Office”). I don’t care how you say it. The goal of this newsletter, or whatever you wanna call it, is to better understand the economics of movie-making through the lens of public, theatrical box-office data, especially in the wake of a global pandemic which nearly torpedo’d a multi-billion dollar industry.
Movie-going has always been available to us, and yet it nearly wasn’t. With overwhelming entertainment options available to us at home and little reason to leave it, you almost would have been accepting of theaters becoming novelty venues like an opera house.
But they aren’t a novelty; not yet, anyway. In the second-half of last year and for most of 2022, the industry has, against all odds, rebounded. The most recent yearly total to date is $3.34 billion in U.S. ticket sales, which is significant given that the Hollywood production pipeline has hardly gotten back up to full speed, and the industry has yet to fully comprehend the cost of sending films straight to streaming without a theatrical exhibition. (There will be more on this hot-button issue in the coming months and years, but all signs point to studios shying away from this practice going forward, which is really good news for this blog).
All that to say: the theatrical experience is still the most profitable way to exhibit a film, by far.
Over the course of this newsletter, through data analysis and tracking of box-office results and forecasting, I hope to shed light on and uncover: what is the future of theatrical exhibition? What trends are we seeing? Why are people still going and what are they going for? And finally, how do you determine whether a film is profitable? What benefits/boosts/margins do studios see from releasing their films theatrically opposed to dumping it on HBO Max or Hulu or (god forbid) Paramount Plus?
I will post at least once a week: Monday. This will be to analyze the weekend’s box-office results. I will design a handy chart that will clearly and intuitively present the Top 10 of that given weekend. I will then discuss in greater detail some interesting numbers and films that will hopefully provide insight into my ultimate goal, which is to attempt to diagnosis the current health of the industry.
Part of my attempt to make this process as approachable as possible is adding a layer of color-coding on top of the data. It’s not exactly fresh/rotten or thumbs-up/thumbs-down, but rather a clear, birds-eye view of the health of a given film at any moment:
How am I arriving at these generalized “health bars”? By leaning on past box-office results and using them to forecast the performance of films only in the first few weeks of their initial runs, we can fairly accurately surmise and predict the “tail” of these films long before the curtain is closed on their theatrical window. Of course, there are plenty of exceptions, which is, as they say when an underdog bests a favorite, “that’s why you play the game”.
I will be using a combination of historical data and recent trends to forecast how films will perform after their opening week. By using “multipliers” (aka the final gross divided by the opening weekend gross) of similar genre and budget films, we can fairly accurately predict the ballpark range of a given film. This is how I will assess a given movie’s “health”, if you will.
To use an example, I’m going to talk about the box-office performance of 2022’s surprisingly inventive redux of “Scream” (Paramount) to better illustrate the concept of multipliers.
“Scream” opened to a dead-even $30M all the way back in January. A vague, blanket multiplier for any movie is usually somewhere around “3x”. So, in this case, “Scream” should cakewalk to $90M, right? Well, there are other factors involved:
1. Horror movies have a track record of being front-loaded. Genre fans tend to flock to see it opening weekend and then generally, it falls off a cliff from there.
2. Franchise films tend to also be front-loaded. These films have dedicated fan-bases/followings and their supporters will go see it immediately, thus leading to a front-loaded number.
So, given those two general factors, a movie like “Scream”, which meets both criteria, will likely fall short of the $90M projection, right?
That it did. It eventually made $81M over the course of its run, which, all things considered, is pretty strong. Despite it being pegged as a front-loaded, crash-and-burn player, “Scream” held to the tune of a 2.7x multiplier; below the 3x threshold but far above what 2011’s “Scream 4” ($38M domestic) did with just a 2.03x multiplier.
What accounted for “Scream” essentially over-performing against history and against recent trends? Probably a combination of several factors (the leads all returning, a lack of competition, etc.) but the most likely reason for over-performing films is usually very simple: people liked it.
To end, I’ll shed a light on some recent research I did on genre multipliers, mostly around the idea that horror films are now over-performing across the board in 2022.
“Scream” wasn’t the only one, as movies like “The Black Phone” (3.7x) and now “Barbarian” (3.0x and counting) have had wild multipliers that go against years of data and history illustrating that horror films can’t have legs like other genre films.
These are unprecedented times and the numbers are familiar in some ways and completely foreign in others, which makes covering this period of the box-office pretty fascinating. Will streaming eventually win out? Will the only movies that perform be tentpoles and sequels? I don’t think either of those are true, at all, but this is the purpose of the newsletter: to figure this all out together.
Enjoy.