Hollywood Falls Back in Love With Cinemas
- Posted On:April 13, 2023
Cinema chains have started to come back into the black and into profit once more, proving that the old ways are still the best with the cinema business truly alive and kicking.
Overall, the domestic box office stands at $2.3 billion, up 36.8% from the same period last year and an astounding 589.5% improvement over 2021, according to Comscore.
In recent years, Hollywood had a serious case of Netflix envy, with studios opting to launch their own streaming services. To do that, they amassed a lot of red ink, building splashy streaming shows and shrunk the amount of time that movies screened exclusively in cinemas as a way of generating enthusiasm for the likes of Disney+, Paramount+ and HBO Max.
Box office revenues are an increasingly vital part of their overall financial health. “Studios have found religion,” says Eric Handler, an analyst at Roth Capital Partners. “They’ve come to recognize that having an exclusive theatrical window is the best way to maximize profits instead of releasing everything simultaneously on demand. There’s a lot of marketing value in having your movie in cinemas.”
For now, Netflix is largely holding firm to its model of releasing nearly all its movies directly on its platform, with only a handful of awards contenders enjoying in-theater runs. But streaming companies like Amazon and Apple are moving in a different direction and taking movies back to the cinema’s prior to releasing on the streaming service.
“There are only so many people who will subscribe to your streaming service, so if you want to attract eyeballs to your movies, theatrical becomes a much more efficient option,” says Eric Wold, an analyst with B. Riley Securities.
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