Box Office: As 2023 Begins, Worry and Fear Linger After a Topsy-Turvy Year for Moviegoing

The ups and downs at the 2022 box office were certainly dramatic.

Recovery from the COVID-19 crisis was in full swing during the summer, only to crash in the fall and early winter. There were high hopes for the year-end holidays, but the merriment didn’t quite materialize outside of 20th Century’s Avatar: The Way of Water and Marvel’s Black Panther: Wakanda Forever, both from the Disney empire. Throughout the pandemic era, such films have fared the best because they appeal to a broad swath of people, including those between the ages of 18 and 34, who were the most likely to return to the cinema.

Families and older adults have come out of the pandemic more discerning in terms of how they spend their leisure time — and money. Kid-friendly animated films, once a bankable staple for Hollywood, continued to face headwinds in 2022. And the marketplace for adult-skewing titles remained uneven at best. Some titles depending upon consumers 35 and older worked — Elvis, Where the Crawdads Sing, Ticket to Paradise and The Lost City — while others were quickly shown the door — Babylon, She Said and Don’t Worry Darling.

“You can’t underestimate the overall value of animated films to the box office. Without them, it leaves a big hole. I make the same argument for adult dramas and comedies,” says a studio insider. “Without a diverse slate, exhibition is lost.”

Others readily agree. “At the heart of it is the need for breadth and diversity of content in the marketplace. Consumers need to have interesting choices, not just big, branded IP but a variety of choices to come back,” says Universal president of international distribution Veronika Kwan Vandenberg.

An underlying issue was an overall lack of product. The movie pipeline has yet to return to normal as studios and other film distributors continue to grapple with production and postproduction delays due to COVID-19 (by all accounts, special effects houses are stretched to their limit). As a result, the calendar was sparse for stretches at a time.

While there are plenty of big titles in 2023 — including The Flash, a Mission: Impossible installment, Barbie, Indiana Jones and the Dial of Destiny, Guardians of the Galaxy 3 and a Dune sequel, to name just a few — there is a continued lack of product during some corridors, including for the next six weeks or so. After a terrible fourth quarter in 2022, B. Riley Securities analyst Eric Wold lowered his domestic box office forecast for 2023 from $9.5 billion to $8.9 billion (he was more bullish than many in predicting north of $9 billion).

Adds analyst Eric Handler of MKM Partners: “2022 showed us that people are willing to come back to the cinema, especially for blockbusters and event films. There just wasn’t enough of them. The number of wide releases was down 35 percent from pre-pandemic times.” Handler projects a 10 percent bump in domestic revenue in 2023, to $8.1 billion.

When business was at its busiest in June and July, domestic box office revenue was down just 14 or 15 percent from 2019, the year before the COVID-19 crisis struck. But, at times last year, revenue was down as much as 40 percent from 2019. One studio executive, speaking to The Hollywood Reporter, notes that the concern is “about the quality of the movies and differentiating what you see at home from the big-screen experience.”

Christmas in particular was brutal, even as James Cameron’s Avatar: The Way of Water quickly sprinted past the $1.4 billion mark at the worldwide box office by the end of the long New Year’s weekend. DreamWorks Animation’s Puss in Boots: The Last Wish was the latest animated offering to disappoint (Illumination and Universal’s Minions: The Rise of Gru was the only animated tentpole of 2022 to really work in theaters). And Paramount watched Damien Chazelle’s Babylon, budgeted at $78 million, bomb after an otherwise stellar year for the studio.

Adds a top distributor: “I don’t think we’ll know the state of the box office recovery until we have a more robust release calendar. There’s still not enough titles in 2023.”

A version of this story first appeared in the Jan. 5 issue of The Hollywood Reporter magazine. Click here to subscribe.