When Jack Black barged into the Oscars’ musical opening with a Hollywood reality check – saying that the only place we’re watching movies is “the screens in our jeans” — he repeated a usual dirge for the big-screen film business.
But in the age of Netflix, piracy and blockbuster TV, here’s a dramatic surprise: The embattled movie-theater business is on track to have its biggest money-making year yet.
Analysts expect that box-office revenue this year in the United States and Canada will soar past $11.5 billion, outpacing the record $10.9 billion set in 2013, when blockbusters such as “Frozen” and the second “Hunger Games” movie debuted. And theaters already are performing more than 10 percent better than they were at this time last year, when films such as “The Lego Movie” became surprise hits.
The splashy start has pushed shareholders to invest in some of the country’s biggest theater chains: This year, AMC Entertainment‘s stock is up 24 percent, Carmike Cinemas is up 18 percent, Cinemark is up 17 percent and Regal Entertainment Group is up 11 percent.
And 2015 has just begun. The year is expected to post huge theater-boosting blockbusters, with new sequels for the “Star Wars,” “Avengers,” “Hunger Games” and “Jurassic Park” franchises.
“Theaters right now and into the future are a more robust proposition than ever,” said Paul Dergarabedian, a senior media analyst at entertainment researcher Rentrak. “We have tons of competing platforms, delivery systems, content . . .and yet, ‘Fifty Shades of Grey’ broke records. ‘American Sniper’ broke records. People have been ringing the death knell for theaters since TV, and it’s just not happening.”
Two mega-hits began the year by racking up ticket sales typically seen only by summer blockbusters. “Fifty Shades of Grey” made $94 million over the four-day Presidents’ Day weekend, and “American Sniper” has gone on to top $300 million nationwide.
The films set records for the biggest box-office weekends ever in January and February, according to the Numbers, a box-office database. And both movies thrived off their own controversy, giving viewers a reason to see them sooner, rather than waiting for them to be released on streaming or DVD.
“That water-cooler effect is more extreme than ever, because of social media,” said Phil Contrino, chief analyst for BoxOffice.com. “Your social media network is all talking about that movie right away on Friday, and you want to be a part of that conversation.”
The year has had its share of big-budget clunkers, including “Jupiter Ascending” and “Mortdecai,” but several other movies did exceedingly well. Even “The SpongeBob Movie: Sponge Out of Water” beat projections by about $20 million when it opened with a $55 million release.
That has been a big deal for Hollywood, a seasonal industry in which the dog days of January — as opposed to the summer blockbusters and the year-end Oscar nominees — have traditionally been regarded as low-selling dumping grounds. January’s box office has typically averaged half that of July’s, when kids are out of school.
Executives once worried about risking an off-season debut because of how it would reflect on them if the movie bombed. “Nobody ever got fired for doing what worked before,” said Patrick Corcoran, vice president of the National Association of Theatre Owners.
But that idea is changing as studios see the potential for gaining audiences year-round — and for not cannibalizing their own sales during the hottest weekends of the year. “They’re realizing this is a 52-week-a-year business,” Corcoran said.
The revenue boom has been helped by average ticket prices, which climbed to a record-high $8.13 in 2013, theater association data show.
Movie theaters are seeing a windfall even when accounting for their potential losses to piracy. Research firm Irdeto estimated that theaters lost $40 million in revenue from illegal downloads of movies since last month, when Academy Awards nominations were announced.
That’s good news for an industry still recovering from a rough 2014, during which some summer weekends’ box-office revenue was down 20 percent. Even with blockbusters such as “Captain America: The Winter Soldier” and “Guardians of the Galaxy,” the North American theater industry saw ticket sales fall about 5 percent last year over 2013.
The record year could strengthen the industry’s argument to keep big-budget films releasing first in theaters, as opposed to streaming or for download at home. “The Interview,” one of the first big Hollywood films to skip theaters and debut online, probably suffered from missing out on a widespread box-office premiere: The film had made about $51 million by last month, below its approximately $70 million production and marketing budget.
Meanwhile, theaters’ streaming rivals, already growing players in the TV business, have begun to look a lot like Hollywood. Amazon.com plans this year to start making feature-length films for theaters, which would then be offered on its Amazon Prime Instant Video service a month or so later, the firm said last month. Netflix said in September that it plans to produce a sequel to “Crouching Tiger, Hidden Dragon.”
Theaters also have found new ways to capitalize on moviegoers, offering alcohol, pricier food at in-theater restaurants and other creature comforts, including recliner seats. The nation’s third-biggest theater chain, Cinemark, had ticket revenue fall 2 percent in the last three months of 2014, but its food and drink sales, and concession spending per moviegoer, climbed about 5 percent.
More people at Cinemark theaters are buying food and drinks for movies, largely because of the chain’s new self-service concession stands, which chief executive officer Timothy C. Warner said in a Friday analyst call have proven “to be very, very productive. . . . It creates a lot of impulse buying, and people don’t run into any lines.”
Cinemark, which has had concession spending per person climb for 32 straight quarters, also created a special drink tied into “Fifty Shades of Grey,” which Warner said “worked really well.”
Box-office earnings depend heavily on the country’s slate of movies. And a shortening of the window between when movies are released in theaters and at home could lead theater attendance to plunge. But industry analysts say the record-breaking revenue has proved that movie theaters aren’t going anywhere anytime soon.
“People want to get out of the house,” said Contrino of BoxOffice.com. “There’s only so much you want to sit at a computer or sit at a TV screen before you say, ‘I want a night out.’ And I don’t think that’s ever going to change.”