From sequels to horror films, global movie business back in motion

More horror, more franchises, falling production, rising occupancies and broken film habits. The global film business is looking good, albeit a bit bruised after its encounter with the pandemic and the take-off of streaming services.

That is the first thing that stands out from all the numbers and analysis in the Movie Content Tracker 2023 by Omdia. London-based Omdia is a global research firm specialising in technology and media. “Things are moving to normalcy. In France, business (ticket sales) is back to 88 per cent, in the UK 82 per cent, and in the US 76 per cent of pre-pandemic levels (in the first five months of 2023 versus the same period in 2019),” says David Hancock, chief analyst, media and entertainment.

Avatar: The Way of Water, Top Gun: Maverick and Jurassic World Dominion among others led the global box-office recovery in 2022. Note that they are all franchises or sequels to earlier films. The global box office grew by a provisional 24.6 per cent in 2022 to reach $25.6 billion. That is way lower than the peak of $42 billion in 2019 but, and this is the second thing, the pandemic had knocked film production off schedule across the world. From Mission: Impossible - Dead Reckoning to Maidaan and Jawan, every major release both in Hollywood and in India has been delayed. This will take time to bounce back given how badly film production has been hit. The supply of films has gone to about half of pre-Covid levels. That means there is “less opportunity to generate revenues. This year is not seeing the same level of mid-budget films”, says Hancock (see chart). Till production schedules are back and the content pipeline is moving smoothly a full recovery is difficult.

Much of this, incidentally, is true for India as well.

“Markets, where there is more content flow and the movie-going index is higher, have bounced back to 90 per cent (ticket sales) of pre-Covid levels. This is all south — Andhra Pradesh, Kerala, Tamil Nadu, Telangana and Karnataka. But the moment you come to the West, East, North and Centre, we are at 50-60 per cent of pre-Covid levels,” says Ajay Bijli, managing director, PVR Inox.

From Rs 19,100 crore in 2019, total cinema revenue in India crashed to Rs 7,200 crore in 2020. Last year it climbed back to Rs 17,200 crore. About 994 million Indians bought tickets to a film in 2022. That is a very good number but it is still far from the pre-pandemic total of 1.46 billion tickets. While India is still the major producer of films in numerical terms (one-quarter of the world’s output), the US is the leader in financial terms, with studio titles regularly budgeted above $200 million.

The horror of cinema: And that brings this to the third thing that jumps out from the report — the rising importance of horror. “The success of M3GAN and Scream VI so far in 2023 underlines the growing popularity of the horror genre at cinemas. The number of horror films in the market has nearly doubled over the past five years and will remain popular during 2023,” says Hancock. The report states that horror accounted for 18 per cent of titles in the top 100 box-office rankings in 2022 and 9.3 per cent of the box-office revenue generated during the year ($705 million).

The reasons are not hard to find. “Horror is relatively easy to build franchises on. It has lower budgets and a lucrative subsequent lifecycle,” says Hancock. The average budget of horror titles in the North American top 100 was $20.8 million in 2022, compared to an average box office of $39.2 million.

The last, somewhat worrying part for the business is that “the habit of going to the cinema is broken and getting it back is taking time”, says Hancock. For all its success, streaming alone cannot support the average $200 million spent on a film. There is talk of shortening windows (time taken to release a film on digital or TV after the theatrical run). Many films now go straight to OTT. “Theatrical exclusivity is still a fact, and required for building IP (intellectual property) value, but consumer trends need different approaches for some movies,” says Hancock.

Bijli reckons: “Every few decades, a phase happens when change has to be brought about creatively. OTT is forcing everyone to look at the kind of content they are making. It is a phase. We are going through a transition but will bounce back. It is a matter of two quarters.”