As franchises lose steam, variety will drive the next decade of cinemagoing.
Omdia view
Summary
Global box office rose by a provisional 28.6% in 2023 to $33.1bn, making 2023 the first year since 2019 not to be affected by cinemas closing because of COVID-19. This encouraging result hides some industry shifts (shorter industry-agreed windows) and some struggling markets (e.g., South Korea) but also a return to near normality for some (e.g., India, Bulgaria, the Netherlands). Film production levels are almost back to where they were in a record 2019, but this has not yet filtered into theatrical distribution pipelines, and the strikes in 2023 will affect the number of films available and therefore the box office in 2024. The dip in franchise success during 2023 suggests that some movie IPs have run out of steam, and new genres, sources, and properties are needed to reenergize people into increasing their cinemagoing habit.
Cinema recovery is underway but setbacks prolonging fragility
Box office grew by 28.6% in 2023, the first year for four years without any COVID-19 closures. The global box office is at 80% of where the market was in the average of 2017–19 and can be expected to remain relatively flat in 2024 because of the impact of the strikes on film supply. Most markets are recovering steadily, if more slowly than exhibitors would like. There are some exceptions, such as South Korea, where a combination of high ticket-price rises and narrowing genres among film producers has depressed a successful market to the extent that the 2023 figure is still 45% behind that of 2019.
The global picture looks more positive in 2025 as studio content comes back to higher levels with at least 10 major films pushed into 2025 from 2024 because of strike-related production delays. At the other end of the scale, 2023 box office in Bulgaria exceeded that of 2019 as it did in the major market of India, while the Netherlands is at 94% of the 2019 level and Finland is at 95%. Each country is following a different path to recovery, and while learnings can be transferable, the market structure, competitive environment, success of local-language films, and consumer shifts vary and alter the dynamics in play. However, it seems that markets can recover fully, and Omdia forecasts that nearly all markets will have recovered by 2025/26. A barrier to that could be people’s preference for watching movies at home, but nearly everyone who regularly went to the cinema has come back at some point, even if they now go less frequently than before the pandemic. The habit needs to be re-formed. The most oft-cited reason for not going to the cinema is expense in a time of significantly raised living expenses. This also suggests that as this pressure eases in 2024/25 (assuming it does), people will return to the cinema once again.
Studios disappointed globally in 2023
The five major studios earned gross revenue of $17bn in cinemas worldwide in 2023, up from $16.1bn in 2022 but still down significantly from the $25bn minimum earned in 2017, 2018, and 2019 when Disney’s Marvel Universe was driving box office and China was a booming market for Hollywood. Those days seem to be over, and the disappointing returns from the Marvel franchise titles in 2023 may also spell an end of this era. For the first time in a quarter of a decade, the top three movies globally do not include a franchise but are original content with a variety of source material.
The reduction of studio dominance has been matched by the growth in revenue generated by local films. This applies especially to China, where local movies now take 84% of the market (in both 2022 and 2023), up significantly from pre-COVID-19 norms and driven by a marked increase in the popularity of domestic movies, which are now higher quality and reflect local culture. In addition, Hollywood has been at times frozen out of the market for economic or cultural reasons.
Another relatively new market, Saudi Arabia, is also showing signs of local success: 13% of releases were local language, but these achieved 36% of the box office. This is encouraging for the nascent Saudi production sector. Across Europe, a number of local films also shone during 2023, underlining a positive trend for domestic producers and distributors that may have started as tactical following COVID-19 supply issues but could become longer term. The quick bounce back by producers also indicates wider optimism in the theatrical market.
Franchises are running out of steam
Returning to franchises, in North America, 29 franchises took a lowly 54.7% of the box office earned by the top 50 movies, well down on the high of 79.7% in 2021 but with a similar number of movies. This may spell the end of a period dominated and driven by the excitement generated by franchise films such as the Marvel and DC universes, animation, Star Wars, and Fast and Furious.
Figure 1: North America, franchises as a share of total box office (top 50), 2013–23
Source: Omdia
As the studios experienced a decade ago, film ideas have a shelf life if they are exploited frequently because audiences lose interest over time. The phenomenal success of the Marvel Cinematic Universe underlines both points: the Disney-owned brand drove box office to new heights, but overexposure (not just on the cinema screens) has diluted the impact and interest.
Variety and new ideas will drive the next decade of cinemagoing
The global top three in 2023 were Barbie (toys IP / female targeted), The Super Mario Bros. Movie (gaming IP), and Oppenheimer (issue-led biography), none of which came out of an existing franchise, even if they might form the basis of new ones. With regard to Super Mario, Omdia has released two recent reports highlighting the increasingly successful transition of video games into movies, an area that used to be seen as a graveyard of ideas but is now spawning a range of successful projects on film and TV.
New movies based on toys are a distinct possibility for the next few years, building not only on Barbie, but also on the success underpinning Transformers, Dungeons and Dragons, and to a lesser extent GI Joe. Those latter titles came out of Hasbro, while Mattel (which is behind Barbie) is reportedly developing 45 different projects for theatrical titles, including Barney the Dinosaur, Hot Wheels, and Uno. Mattel set up a film division, Mattel Films, in 2018. Hasbro bought eOne in 2019 but disposed of it in 2022 to Lionsgate and is now, in a marked change of strategy, channeling its film properties through Hasbro Entertainment.
Other successes in 2023 suggest possible genres that could be exploited, not including staples such as horror films that are already on the up: Taylor Swift (theatrical musical concert), Hunger Games (literary adaptations), Demon Slayer (anime/subculture), Mean Girls (musical comedy), and the upcoming Bob Marley: One Love (biography) are just some of the avenues that could drive the next few years. In fact, it is entirely plausible that all these genres and more will drive the market as a wider variety of original content and source ideas come back to our cinema screens.
The desire for people to see films reflecting their culture is a core part of cinema, and it looks to be on the up. People also seem to embrace diversity and variety. The differentiating factor between now and pre-COVID-19 is that both Hollywood and local films were thriving up to 2019, whereas now Hollywood seems to have reached another plateau that requires a shift in the types of films the studios make to drive the next decade of global audiences. There is room for both strong local filmmaking and global movies, but with a weak 2023 and the impact of the strikes to come in 2024, the job of the studios seems that much harder. They need to focus on making theatrical films, not filling streaming pipelines, but they worked out a way to adjust a decade ago when their dominance was again under threat, and they will no doubt adjust and adapt again. It is in the interests of the cinema industry, and cinema audiences, that they do so.
Appendix
Further reading
Movie Content Tracker, 2023 (March 2023)
Author
David Hancock, Chief Analyst, Media & Entertainment
