The box office is down 8% this summer. Not sure if you’ve heard. Some media reporters are acting like it’s the swan song of a dying industry. Of course, they are comparing figures to 2016’s frame, which was part of a record year at the box office. Honestly, it’s not that bad. Every studio has a major hit it can cheer about (some even have two) and a bomb they are scratching their heads over (like they do every summer). And almost every studio also has a major player this fall or holiday season to right the ship, from “Justice League” (Warner Bros) to “Pitch Perfect 3” (Universal) to “Jumanji: Welcome to the Jungle” (Sony Pictures) to “Ferdinand” (20th Century Fox) to “Star Wars: The Last Jedi” (Walt Disney Studios). Things are gonna be O.K. (especially if you have Disney stock).
And let’s not forget, with the story of the summer far from over, there have been major wins such as the incredible success of “Wonder Woman,” “Baby Driver,” “Spider-Man: Homecoming,” “Guardians of the Galaxy, vol. 2” and an art house market that just won’t cool down.
To be fair, there are a number of other intriguing topics that deserve your attention more than a slight decline from a record tally. Even some good news to ponder. Such as…
Sony Classics comeback summer
Summer has been a major player for art house business. Just look at the pseudo-art house success of “The Big Sick” and “The Beguiled,” two movies that went wide fairly quickly after limited debuts. But if you’re sticking to straight limited runs — under 500 theaters — special kudos already have to go to the impressive late spring and summer SPC is having. “Norman: The Moderate Rise and Tragic Fall of a New York Fixer” earned more than $3.7 million in no more than 373 theaters. “Paris Can Wait” took $5 million in no more than 474 venues and “Maudie” has made $3.1 million in no more than 67 theaters (somewhat remarkable). Granted, these tallies don’t make up the production budget for most of these films, but they are profitable based on SPC’s model and what the mini-major paid for to distribute them in the U.S. How are they doing it? If A24 has the pulse on the younger, millennial moviegoer than SPC continues to mine older audiences like no other (well, maybe Roadside who is pretty damn good at that demo too).
China box office skewing global totals
It was only a year ago that members of the media were praising the overseas success of Duncan Jones‘ “Warcraft” for helping the Legendary production break even. Chinese box office accounted for $213 million of “Warcraft’s” $386 million international bounty (the film made just $47 million in the U.S.). The dirty secret that the public still does not seem to understand about the Chinese box office is that because of government regulations Hollywood studios only earn a quarter of that total. In every other market, including the U.S., the split with theater owner is closer to 50% (and in very special cases more). “Warcraft” averted being a box office bomb by the skin of its teeth, but there are a number of franchise “hits” this summer which are not as profitable as they seem. $172 million of the $734 million in ticket sales for “Pirates of the Caribbean: Dead Men Tell No Tales” is from China. $91 million of “The Mummy‘s” $385 million global take is also in Chinese ticket sales. In theory “Alien: Covenant” looks like it squeaked into the black with $232 million worldwide off a $97 million production budget, but $45 million of that is from China so it really hasn’t (And, then there is “Transformers: The Last Knight” which is we’ll tackle in a moment). The takeaway is that China is a gigantic market that is often outpacing domestic grosses, but, until Hollywood can figure out a way to get a bigger return of the receipts, it’s not the long-term cash cow many entertainment multinationals were hoping it would be. The deal sure is making a ton of money for the Chinese government, however.
Comedies appear on life support
Remember when R-rated comedies such as “Bridesmaids” and “The Hangover” movies were killing it at the box office? Geez, even “Neighbors” was only three summers ago. Well, we’re already in July and there hasn’t been one “true” comedy that’s been a legitimate hit this year, let alone one that’s R-rated (we’re not counting “Baby Driver,” it’s an action-comedy thriller). This year “Baywatch,” “Rough Night,” “The House” and “Snatched” bombed across the board. Last summer “Central Intelligence,” “Bad Moms” and “Sausage Party” were all big hits and even “Why Him?” did moderately good business over the holidays. Clearly, it helps if the movies are actually funny, but that hasn’t always mattered in the past. At this point moviegoers are telling Hollywood they are in no mood to laugh (we’re not saying it’s the mood of the country after the start of the Trump presidency, but we’re not not saying it’s that either). Of course, Universal’s “Girls Trip” is expected to open next week to over $30 million, so moviegoers may not be totally turning their backs on straight comedies yet. Maybe.
Michael Bay may have killed the “Transformers” franchise
Optimus Prime may really be dead. After the last two ‘Transformers’ installments each made over $1 billion globally, ‘The Last Knight’ crashed in a manner that even Paramount executives could not have anticipated. Michael Bay’s fourth film has earned just $494 million worldwide to date. The problem is that 44% of that worldwide gross is from China. And that means Bay’s latest opus may not recoup its production budget of a reported $217 million theatrically (at this writing it still hasn’t and we’re not even taking into account the massive marketing budget). This is a major red flag for Paramount, which counts on the usually profitable ‘Transformers’ films to boost the rest of their sagging slate. Especially if they’ve had a particularly weak year (like this one, so far). Bay has remarked publicly he might want to return for another go around, but new Paramount head honcho Jim Gianopolous will have to figure out how to convince him that probably isn’t a good idea for everyone involved. Because, at this point, even launching the spin-off “Bumblebee” movie will find the studio battling a very negative perception in the marketplace (except China of course).
