Analysis: Cineworld's woes highlight uneven moviegoing recovery

Marcus

08/09/2022 11:00

By Dawn Chmielewski
    LOS ANGELES, Sept 8 (Reuters) - A string of summer
blockbusters, from the high-flying "Top Gun: Maverick" to the
near-billion-dollar global gross of "Jurassic World: Dominion,"
suggest the movie business is rebounding from the devastating
COVID-19 pandemic.
    But the industry is still far from returning to the
box-office-busting days of 2019, before the health crisis
shuttered theaters and halted productions around the globe,
theater and studio executives said. 
    Ticket sales in the United States and Canada will likely
reach $7 billion this year, a dramatic improvement over the past
two years but more than one-third lower than in 2019. Major
studios plan to ramp up production in 2023, but it is unclear
whether the number of films shown in theaters will reach
pre-pandemic levels. 
    "It's been a devastating journey," said Rolando Rodriguez,
chief executive of the Wisconsin-based Marcus Theatres,
describing the industry's bumpy recovery. "This summer has put
us back on track, on a positive trajectory. We're going to have
a little softness through the fall, then we're going to come
back to an exciting fourth quarter."
    A move by the world's second-largest cinema operator,
Cineworld Group  CINE.L , to file for bankruptcy protection in
the United States on Wednesday underscored the financial
challenges facing theater owners and the fragile nature of the
box office recovery following the pandemic.  urn:newsml:reuters.com:*:nL4N30E3AG 
    Some worry the global popularity of streaming has
permanently changed viewing habits, and that more cinemas will
go permanently dark. Movie buffs no longer need to leave their
homes to watch new releases such as the spy thriller "The Gray
Man" on Netflix.
    Others point to a break in Hollywood's movie pipeline.
    London-based Cineworld, which owns the Regal Cinemas chain
in the United States and runs movie theaters in nine other
countries, said the lack of new blockbuster films is keeping
moviegoers away, squeezing its cash flow and forcing it to
explore its options.
    Although some individual films are performing well, studios
have sharply cut the number of movies they release. The dry
spell will extend until October, when Dwayne Johnson's "Black
Adam" and Jamie Lee Curtis' "Halloween Ends," open in theaters. 
    Audiences are expected to return to theaters over the
holidays for two highly anticipated sequels: "Black Panther:
Wakanda Forever" in November and "Avatar: The Way of the Water"
in December.  
    Holiday ticket sales should be enough to lift the year's box
office to $7 billion or $7.5 billion in the United States and
Canada, Comscore's senior media analyst Paul Dergarabedian
projected. 
    That's well shy of 2019's $11.4 billion tally, although
analysts forecast the box office gradually gathering momentum,
rising to $10.5 billion next year. 
    For now, there are 71 wide releases scheduled for 2023, just
up from 67 movies planned for this year. The calendar is likely
to fill out, studio executives said, but remains a far cry from
the 102 titles Hollywood released to theaters in 2019. 
    Smaller, independent theater chains -- especially those
stuck in "zombie" malls with few shoppers -- may lack the
resources to survive the fall's movie drought, or the changes
brought by the pandemic, said studio and theater executives.
    "We've always claimed that our margins are so thin," said
Ted Mundorff, president of Pacific Theatres Exhibition Corp,
which filed for bankruptcy in June 2021. "You lose 30% of the
topline, of the total box office, you're going to have some
breaking points."
    Former Disney Chief Executive Bob Iger, in remarks at the
CODE conference in Beverly Hills on Wednesday, said the pandemic
had left a "permanent scar" on the movie business. "It won't go
away, but it doesn't come back to where it was," he predicted.
    

 (Reporting by Dawn Chmielewski and Lisa Richwine; editing by
Richard Pullin)
 ((lisa.richwine@thomsonreuters.com; Follow me on Twitter
@LARichwine; 1-424-434-7324; Reuters Messaging:
lisa.richwine.thomsonreuters.com@reuters.net))