Hollywood’s Summer Slump: Sequel Saturation and Box Office Blues

June 11, 2024 FilmTake Exhibition Comments Off on Hollywood’s Summer Slump: Sequel Saturation and Box Office Blues

So far, 2024 has seen a dramatic decline in theatrical revenue, exacerbated by the absence of major releases due to delays associated with industry strikes. Box office numbers have suffered significantly, with fewer original films to draw audiences back to theaters.

Domestic box office revenue is down 24% as we near mid-year compared to the same period last year, standing at just $2.68 billion. This stark drop has reignited fears about the long-term viability of the theatrical model in a post-lockdown world dominated by streaming and Hollywood’s challenge in competing with short-form, user-generated content.

Dwindling Attendance: Audiences Reject Rehashed Releases

Many films released this year have failed to meet even the most modest expectations. One bright spot was Bad Boys: Ride or Die, released over the weekend. It exceeded its projected $48-50 million opening after raking in $56 million domestically. However, the film still fell short of the $62.5 million opening of its 2020 predecessor, Bad Boys for Life, released in January of that year and collecting $200 million before the lockdowns in March were mandated.

Warner Bros.’ Furiosa, a highly anticipated follow-up to 2014’s Mad Max: Fury Road, failed spectacularly at the box office. Despite mostly favorable reviews, the $160 million R-rated action film barely surpassed $50 million by its second weekend, losing to Sony’s animated Garfield movie.

Nearly every spring and summer studio film this year is a remake or sequel. The top five major spring releases included Dune: Part Two, Godzilla x Kong, Kung Fu Panda 4, Kingdom of the Planet of the Apes, and yet another Ghostbusters. Of these, only Dune: Part Two was a success. With ever-increasing production budgets, profitability is becoming even more difficult.

The rest of the summer looks equally grim. The lineup includes a slew of sequels and rehashes, such as Deadpool & Wolverine, Despicable Me 4, Alien: Romulus, Inside Out 2, Bad Boys, and a Quiet Place prequel.

Furthermore, the number of wide releases from major studios this summer is shockingly low. By the end of August, fewer than 20 films from traditional studios will have hit theaters, the lowest since 2020. This decline reflects the industry’s ongoing struggles and the audience’s shifting preferences.

Global Box Office Set for Shocking Downturn in 2024

Before the year started, many analysts predicted that the global box office would drop 5% in 2024 to reach $31 billion compared to 2023’s $33.4 billion. However, after a string of disappointments and a very muted performance in Europe, the drop is shaping up to be severe.

The decline will be extreme in North America, where takings could drop 20% or more from 2023. International receipts excluding China could fall as much as 10%, while China’s box office is expected to rise by at least 5% from $7.6 billion in 2023. Through the first four months of 2024, the China box office has already broken $2.8 billion before considering stellar receipts in May.

Global Box Office Receipts – 2017-2024

This poor performance is troubling for theaters already struggling to recover. May was the worst in decades, excluding the anomalous years of 2020 and 2021. Box office earnings were down over 30% from May 2022, marking a sharp decline from last summer's unexpected successes.

The trifecta impact of the writers' and actors' strikes, combined with the 2020 and 2021 lockdowns resulting in production cancellations, has profoundly affected film production schedules. The writers' strike, which lasted five months, delayed script development and pre-production activities, while the actors' strike halted filming for many anticipated blockbusters. This disruption has left studios scrambling to adjust their release calendars.

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Declines Amid Sparse High-Profile Releases

The lack of high-profile releases has left the early summer box office in disarray. Every week of 2024 has seen lower revenues compared to the same period in 2023. This consistent decline has sparked renewed debate about the sustainability of the theatrical model in an era of streaming services. Analysts and industry insiders acknowledge the ecosystem's fragility, but there remains cautious optimism that moviegoing will recover with upcoming releases.

Industry observers hope that releasing anticipated films like Inside Out 2, Despicable Me 4, and Deadpool & Wolverine will reignite audience interest in theaters. However, the steady stream of content that characterized pre-lockdown years won't return until at least 2025. This gap raises concerns about maintaining audience engagement in the interim, especially since Hollywood cannot deliver dynamic content.

The Long Road to Recovery or New Normal?

Despite the current struggles, some industry insiders remain optimistic about the future of theatrical releases. They argue that the box office will rebound when the release calendar normalizes, and audiences are presented with a steady stream of compelling content. However, each underperforming movie heightens concerns that studios might scale back production, further exacerbating the problem.

The May 31 to June 2 weekend is a stark example of the crisis. Domestic box office revenue plummeted 69% without a major new release compared to the same weekend last year.

The summer box office crisis underscores the delicate state of the theatrical model. While there is hope that upcoming releases will revive audience interest, the industry faces significant challenges. The strikes have disrupted production schedules, leading to a content drought that won't fully resolve until 2025.

As studios navigate these turbulent times, the focus must be on creating compelling content that draws audiences back to theaters. The long-term survival of the theatrical model will depend on its ability to adapt to changing consumer habits and the competitive landscape dominated by streaming.

The theatrical film industry desperately needs a turnaround, but the current outlook is unpromising.