‘Avatar: The Way of Water’ expected to earn $150mn from US debut
Struggling cinema operators are looking for a strong opening weekend from Avatar: The Way of Water, the sequel to the highest-grossing film of all time, to help salvage another difficult year for the industry.
The Way of Water, filmed in 3D and clocking in at more than three hours, opens on Friday and is expected to gross $150mn at the North American box office this weekend.
The animated film, directed by James Cameron, is hitting screens around the world as cinemas suffer from a dearth of films — and customers. Only five wide-release films will open in December, usually a busy month when studios launch a mix of holiday fare, potential blockbusters and contenders for awards.
“There’s not as many movies this year as is traditional,” said Paul Dergarabedian, senior analyst at Comscore, who believes that this is a hangover from the coronavirus pandemic-induced production delays. In all, 2022 will end with 40 fewer films being released than in 2019.
The Way of Water is expected to gross almost $650mn in the US and $930mn overseas, according to projections by box office forecaster Cinelytic. However, even if it performs as well as expected, the North American box office is estimated to end the year with $7.3bn in total sales, down sharply from pre-pandemic levels of about $11bn.
There have been some bright spots at the box office: Wakanda Forever, the sequel to 2018’s Black Panther, is closing in on $800mn worldwide, and Top Gun: Maverick has grossed more than $1bn worldwide.
But cinema attendance has dropped off sharply since the end of the summer.
The problem has been the lacklustre performance of films outside of the big franchises. Steven Spielberg’s latest film, The Fabelmans, has underperformed despite good reviews and a marquee director. It has earned less than $10mn at the box office — a poor showing for a film budgeted at $40mn.
“The Academy Award-type movies . . . have struggled this year,” said Chad Beynon, an analyst at Macquarie. The weak performance of mid-tier movies had been a blow to cinema chains such as AMC and Cinemark, he added.
“We need to fill the screens, particularly the US, where there are 40,000 screens,” Beynon said. “You need product — good product — to drive attendance.”
If there is good news for the cinemas, it is that spending on food and beverages on site has risen strongly this year, and operators are encouraged by an uptick in promising film releases in 2023. They include an Ant-Man sequel in February, Creed 3 in March, the final Indiana Jones movie in June and Barbie in July.
“Our audiences are there, we just need movies,” said Tim Richards, chief executive of Vue, Europe’s largest privately owned cinema chain. He said cinemas had been “suffering from a production lag” that would not resolve itself until “the back end of next year”.
Cinema groups may also benefit from the rethink among the big studios about their streaming strategies. Investors have shifted their focus from seeking growth in streaming subscriptions towards profitability — meaning that studios such as Warner Bros are once again emphasising the role of the box office in generating revenue and profits.
“A commitment [from the big studios] back to theatres is something we are hoping for,” said Beynon.