What the future looks like for movie theaters in 2022, according to top industry execs

Zendaya and Tom Holland in "Spider-Man: No Way Home."

Sony Pictures

• This year's box office is well ahead of 2020, but still far from pre-pandemic figures.
• Theatrical and distribution executives laid out their outlook and concerns heading into 2022.
• One of the biggest long-term threats they raised was a smaller supply of movies in theaters.

After two years of chaos brought on by the coronavirus pandemic, theatrical industry insiders are cautiously optimistic about the future of moviegoing. 

"We'll keep an eye on variants and how that may or may not affect theater capacities going forward, but generally speaking there's a lot of films coming, and markets are open with few exceptions, so we're excited about the slate that we have for 2022," Jim Orr, the president of domestic theatrical distribution for Universal, told Insider.

But the numbers tell a story of an industry still far from recovery, despite signs of hope like "Spider-Man: No Way Home," which opened over the weekend with $260 million at the US box office, the second biggest domestic debut of all time. 

The data firm Comscore is projecting the North American box office to end the year at around $4.4 billion, nearly double 2020's total but down more than 61% from 2019. Comscore is projecting the global box office to end the year with more than $20 billion, up from $12 billion last year but down from 2019's $42.5 billion.

Part of the problem for theaters is that older audiences have been the slowest to return amid the pandemic, impacting adult dramas like "West Side Story," Steven Spielberg's $100 million musical remake that has made just $19 million domestically since opening earlier this month.

But even the most successful movies this year — IP-driven tentpoles — have underperformed compared to pre-pandemic numbers, save for "No Way Home." Insiders say that it is more of a marathon than a sprint.

"Less than half of a normal year can still be seen as a win for an industry coming off the most challenging two years in its history," said Paul Dergarabedian, the Comscore senior media analyst.

But the box-office performance raises questions of how and when theaters will fully recover — and if they ever can to 2019 or 2018 figures again.

Insider spoke with executives close to the theatrical business about their outlook for the future of moviegoing, how the industry can rebound, what their most concerned about, and what long-term effects the pandemic will have on the theater business. 

Here were the key takeaways.

"Black Widow."

Marvel Studios

Windowing and release strategies will evolve

Throughout the pandemic, movie studios have experimented with streaming as an alternative or supplement to theaters. Warner Bros. released all of its movies this year simultaneously in theaters and on HBO Max, for instance. 

But heading into 2022, some major studios have announced plans for exclusive, but shortened, windows for their theatrical releases, including Warner Bros., giving theaters a degree of exclusivity while allowing studios to premiere movies on streaming services earlier than they typically would have.

The traditional pre-pandemic window of between 75 days to 90 days will be a thing of the past for most releases. 45-day windows have emerged as a potential new standard, though it's not concrete.

"It seems that the industry is coalescing around 45 days but that certainly doesn't seem set in stone and it won't be for every single title," said Orr, the Universal distribution exec. "There may be titles from certain studios that might not have any theatrical exclusivity. I don't know if we'll ever get back to one specific windowing model like we had back in 2019. Even then I think there was a lot of talk about how windows may look going forward, and the pandemic just accelerated that."

The National Association of Theatre Owners (NATO) has pushed hard for exclusive theatrical windows this year. After "Black Widow" debuted simultaneously in theaters and on Disney+, the organization released a scathing statement calling simultaneous releases a "pandemic-era artifact."

The criticism was mostly around increased piracy, but John Fithian, the NATO CEO, said simultaneous releases also "blurred the distinction between a theatrical movie and a made-for-home movie."

Simultaneous releases aren't going away in the new year, or maybe even beyond (Universal is releasing its romantic comedy "Marry Me" in theaters and on Peacock in February). But with some major studios committing to a degree of theatrical exclusivity, Fithian is now more concerned with a "shrinking slate of theatrical releases." The pending acquisition of the MGM film studio by Amazon embodies his concerns.

"MGM makes movies for theatrical release and Amazon's all about Prime Video," Fithian told Insider. "MGM makes the kind of mid-budget movies that we need. That's a potential harbinger of the impact of big tech."

Even so, Fithian said that theaters are in conversations with Apple and Netflix. Exhibitors had previously been hesitant to play Netflix films because of the streamer's windowing demands.

"It makes sense for some of their movies to go theatrical," he said. "We'll look for additional suppliers where we can find them."

Rachel Zegler as Maria in "West Side Story."

20th Century Studios

Older audiences have stayed home, but could be back

Those aforementioned mid-budget movies, the kind that skew toward an older audience, have struggled at the box office this year. Younger moviegoers have driven the most successful releases, from "No Way Home" to "Shang-Chi."

"Older demographics, the 50-plus audience, are the last to come back," Mark Zoradi, the Cinemark CEO set to retire at the end of the year, told Insider during a recent interview. "But it's a matter of them feeling a bit more comfortable. I think if that happens and movies come out that appeal to them, I think we'll see them come back." 

Others feel the pandemic has shifted consumers' appetite for what they're willing to pay to see in a theater versus streaming it at home. 

"I think the less expensive movies will go straight to streaming," Imax CEO Richard Gelfond told Insider. The pandemic "accelerated the drive towards blockbuster movies in theaters," he added.

Getting older audiences back may take more than good movies that attract that demographic. As far as innovation goes, Fithian thinks it's rather simple: Moviegoers want things they can't get at home, like reclining seats and high-end food and beverage options (like those at the Alamo Drafthouse Cinema chain, where customers order from their seats).

But a robust supply of good movies is a start.

"It's fair to say that an older audience isn't running out to theaters like they did in the past," Orr said. "But I think quality storytelling will win out in the end."

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Contributer : Business Insider https://ift.tt/3qkQOZf

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