With "Tenet" having failed to breathe life back into the U.S. box office and studios delaying future film releases, theater owners remain in critical condition, according to analysts.
Exhibitors spent all summer eagerly awaiting the release of Warner Bros.' "Tenet," the sci-fi blockbuster from director Christopher Nolan that was supposed to bring moviegoers back to multiplexes. But after the film debuted to just $20.2 million stateside, studios began postponing releases for other big-budget titles, leaving theaters owners without a major film release through October. While some exhibitors may be able to weather the dearth of blockbuster titles into 2021, others are entering dangerous territory.
"Warner Bros. didn't even wait to see what the second weekend grosses were for 'Tenet' before they pushed 'Wonder Woman 1984.' That pretty much tells the box office tale. They just can't risk another $200 million film in this unsettled marketplace," Jeff Bock, senior analyst at Exhibitor Relations, said in an interview.
Source: Warner Bros.
While a $20.2 million opening weekend is not terrible, that result may have included a week of prescreenings and a long holiday weekend, with the Friday-to-Sunday frame grossing just about $9 million, according to Variety.
Prior to its release, BoxOffice.com projected "Tenet" to collect a three-day opening between $18 million and $23 million, not including the Labor Day holiday. Including early-week prescreenings, the Thursday night debut and the Labor Day holiday, the film was forecast to tally between $30 million and $40 million.
After Warner Bros. pushed back "Wonder Woman 1984," Comcast Corp.'s Universal Pictures followed suit, saying it would postpone the debut of writer Jordan Peele's remake of horror film "Candyman." Moreover, reports began circulating that The Walt Disney Co. would delay its superhero flick "Black Widow." Given that Disney and Universal Pictures have already forgone theatrical debuts to release new titles as premium video-on-demand streams, it is uncertain whether either feature will find its way to the silver screen at scale domestically.
With theater owners having already spent precious cash on re-staffing and upgrading theaters to accommodate pandemic-era health-and-safety standards, some exhibitors may be left "high and dry," according to BoxOffice Pro's chief analyst Shawn Robbins, if further titles are pushed back.
Analysts agreed that consumers will need time and a compelling film slate for the moviegoing market to return to normal.
This creates a kind of paradox for exhibitors. Before debuting their big-budget films, studios will want more clarity on whether consumers are willing to come back to theaters, but the only way to get clarity is to release those big-budget films.
"This is a chicken-and-egg problem," Wedbush Securities analysts Michael Pachter said in an interview. "If box office is going to be $20 million for films like 'Tenet,' it's unlikely that the studios will release movies like 'Bill & Ted' or 'Mulan' [in theaters]. If movies keep going direct to video-on-demand, it will be hard to return to normal for the exhibitors."
The results for "Tenet" were not all bad. International audiences turned out, and "Tenet" brought in over $200 million globally through the second weekend of September.
Domestically, a film's holdover performance is "definitely more important now," Thomas Beranek, chief analyst at Gower Street Analytics said in an interview. There are some signs that "Tenet" will keep momentum as theaters continue to open, and it is difficult to assess the success of a film on its first weekend with only a fraction of screens operating. Theaters in major markets like Los Angeles and New York were closed for the debut.
Further complicating matters, many theaters opened at the last minute. AMC Entertainment Holdings Inc. announced 140 theater reopenings just days before "Tenet's" Sept. 4 debut, with some New Jersey announcements coming as late as Sept. 3. Only 41% of all potential moviegoers were aware their local cinema was open at the time, according to Deadline Hollywood, which cited a National Research Group survey.
"Tenet" may also have been a difficult title to revive a dormant box office. The film is highly cerebral with a plot involving complicated twists of time travel. The title may be a little esoteric for the casual moviegoer to return to theaters, Robbins at Box Office Pro said in an interview.
"'Tenet' alone cannot support every theater for the next two or three months," the analyst said. "Cinema owners took the first step to reopen, and Warner Bros. took the first step to release a major film. But now, the impetus is on studios to continue delivering new product as promised [and] take on a more significant role in the marketing of reopenings."
In a bit of good news for theaters, Universal pushed up the release date of its animated sequel "The Croods: A New Age" to Nov. 25, the day before Thanksgiving, from its previous release date of Dec. 23.
But Thanksgiving is still two months away. And without further support from studios, theater operators will struggle through the fall, particularly those with challenged balance sheets like AMC, Bock at Exhibitor Relations said. AMC ended the June quarter with debt totaling $10.94 billion.
"Playing small-ball for two months simply isn't going to work for most smaller cinemas, not to mention the big chains, which really lean on a billboard full of blockbusters," Bock said.