Disruption is ravaging Hollywood at a pace that I cannot remember. What is most fascinating is how public this is and we can all watch the meltdown before our eyes.
This is how technology works, something few fail to realize. It starts slowly then picks up steam. Over time, it becomes like a snowball rolling down a hill, destroying whatever gets in its path.
So what is the latest inspiration for another Hollywood article?
The results.
Lowest Box Office In 40 Years
In the United States, Memorial day weekend is a big deal. It kicks off the "Summer season". Schools are about to get out, providing businesses with opportunities. Things such as theme parks see their attendance rise during this time of year.
For the movie industry, this is huge.
The weekend is the official open of its Summer release schedule. Many look to the results as an indicator for the prospects for the rest of the season although some movies are sometimes released ahead of this weekend.
If the early results are any indication, it is going to be another losing year for Hollywood.
Here is the headline from the New York Times:
‘Furiosa’ Is a Memorial Day Weekend Box Office Dud
Memorial Day weekend ticket sales in North America are expected to total $125 million, down 40 percent from last year.
Read the last part again: down 40 percent from last year.
It doesn't matter what business you are in, a 40% year-over-year decline is tough to take. The sad thing is that was down from 2022.
As for the top film, this is what it looked like.
“Furiosa,” which cost $168 million to make, not including tens of millions of dollars in marketing costs, collected an estimated $25.6 million in the United States and Canada from Thursday night to Sunday. Box office analysts expected the film to take in about $5.4 million on Monday, for a holiday-weekend total of $31 million.
Some are claiming that with marketing costs factored in, the film will have to bring in around $500 million when accounting for the splits with the theaters to break even.
It is not off to a good start.
So what is the reason for this?
An Industry In Decline
Why are we seeing this?
There are many reason feeding into this. Jerry Seinfeld opined on this exact matter last month:
Jerry Seinfeld says the movie business is over: ‘No longer the cultural pinnacle’
Source
It is hard to argue with a guy who pulled in over $1 billion in his career. That said, I think this is only part of the issue.
There was a picture of a Tweet in a video I came across (I couldn't locate the Tweet itself) that might explain the situation.
In the area for the one making the post, at an AMC theater, the price of an adult was $28 with children tickets going for $25 apiece.
This could be one major factor.
Of course, this is not the end of the story. Another major obstacle for Hollywood is the fact these entities all have to fill their streaming services. This means we are conditioned to wait for a film to come out on that platform.
With a price of two going to the theater costing near $60 just to walk in the door, it is no wonder people wait. Based upon the reviews of films that most people discuss online, there are very few must see. Barbie, Oppenheimer, and Maverick all did well out the box office last year so there is a market if people really want to see the picture.
For most, this is not the case.
A final reason is one that rarely gets mentioned but I think is at the core of this issue.
People have more options today with regards to where their attention is placed. With so many options to receive entertainment, movie theaters are low on the list. Even seeing the movies themselves, anywhere, is fading as expressed by Seinfeld.
I regularly post the stats for YouTube. This is not done because I am some Google fan. Actually, that is a company that I am not very high on personally. However, they have done a tremendous job taking over the streaming market. Along with their television service, Google is a major player in the world of entertainment.
The point is that, with over 30K hours of video uploaded daily, there are many choices. Even if most of it is garbage and uninteresting, the numbers are in their favor.
Plus, YouTube charges nothing for the service, instead opting for the ad-revenue model.
Denial About What Is Happening
The problem for Hollywood is they appear to be clueless as to what is happening. While they can see the result, they are in denial about it.
Furiosa had the makings of a successful film. It was another in the Mad Max series. From the reports it was a pretty good script with the writer (and director) being the one who did previous films. Hence, we are not dealing with someone who is unfamiliar with the genre or lacks the ability to create a success.
The challenge Hollywood is facing is technology is making them obsolete. There are a lot of choices for people. Being down for the year is not a good sign considering where things were the past couple years.
Here is what Llama3 had to say about the previous two years:
According to Box Office Mojo, a reliable source for box office data, here are the worldwide and US box office grosses for 2022 and 2023:
2022:
- Worldwide gross: $23.3 billion
- US gross: $2.3 billion
2023:
- Worldwide gross (as of December 31, 2023): $21.4 billion (note: this figure is subject to change as more data becomes available)
- US gross (as of December 31, 2023): $1.8 billion (note: this figure is subject to change as more data becomes available)
Comparing the two years, we can see that:
- The worldwide box office gross in 2023 is lower than in 2022, with a decrease of approximately 8%.
- The US box office gross in 2023 is lower than in 2022, with a decrease of approximately 22%.
It is not as if 2024 is chasing a smashing year. In the US, 2023 saw a 22% decline in box office sales. Globally, as we see, it fared a bit better.
This is the epitome of an industry in decline. The disruptors are grabbing attention while the incumbents make excuses. It reminds me a great deal of the sentiment within the shopping mall business a decade or so ago. At that time, the retail apocalypse was in full swing, with holiday shopping seasons suffering while online sales were skyrocketing.
The Internet was filled with articles by industry "experts" offering excuses as to why that was the case. Ultimately, it came down to not acknowledging what was truly taking place.
What is ironic is you can spend time on YouTube watching videos that people made of abandoned shopping malls and their decline.
Just one more thing movie theaters have to compete with.