The Hollywood Reporter
How will the global box office look years from now?
Accounting firm PwC’s annual “Global Entertainment & Media Outlook” contains forecasts for 2023-2027 across various industry sectors, including some noteworthy projections for cinema revenue, both in terms of box office and in terms of movie theater advertising.
Among them: Global cinema admissions will reach 7.2 billion in 2027, at a lower level than pre-pandemic 2019, which counted around 7.9 billion admissions. But helped by higher ticket prices, global cinema revenue will finally reach pre-COVID pandemic levels by 2025, when it is predicted to hit $46.5 billion, followed by further growth to $52.1 billion in 2027.
Plus, China will “lead global total cinema revenue for much of the forecast period,” hitting box office revenue of $13.2 billion in 2027, compared to a forecast for $11.9 billion for North America. The two giant cinema markets have in recent years been jockeying for the top position.
Despite the admissions prediction, the overall forecast of global cinema revenue returning to pre-pandemic levels will be likely seen as welcome news in Hollywood, even though some will have hoped for a faster pace of recovery. 2025 will also mark the year when global box office revenue will overtake 2019’s tally of $39.4 billion to hit nearly $43.0 billion after reaching $38.8 billion in 2024.
The U.S. trend line is somewhat different from the global curve. Box office revenue in the U.S. reached $6.9 billion in 2022, PwC noted, calling out this “sizeable upshift on the 2021 figure of $4.3 billion” and citing it “as evidence of the sector’s continuing post-COVID-19 recovery.”
The firm sees more good U.S. news ahead. “That figure is expected to rise further in 2023 and to continue edging upwards throughout the forecast period,” PwC’s report notes. “By 2025 box office is predicted to exceed the $10.0 billion mark regularly achieved in the pre-pandemic era.”
In 2026, PwC forecast calls for a U.S. box office of $10.7 billion, up from $10.2 billion in 2025 and finally slightly exceeding the figure achieved un 2019. In 2027, U.S. box office is projected to hit $11.0 billion, exceeding 2018’s $10.8 billion.
But the nearly $11.7 billion in total U.S. cinema revenue reached in 2019 and the $11.8 billion hit in 2018 will not be reached again until 2027, PwC estimates. That year, it sees U.S. cinema revenue climbing to nearly $11.9 billion.
Here is a look at key highlights from PwC’s analysis of and predictions for the film sector.
The biggest blockbusters will account for most all revenue
“In 2022, 442 films were released in North America, down from the 873 films that reached cinemas in 2018,” PwC’s Outlook report highlights. “But a tiny proportion accounted for a huge part of overall revenue. By late February 2023, James Cameron’s Avatar: The Way of Water, released by Disney on Dec. 16, had accumulated global revenue of $2.3 billion, making it the third-top-grossing film of all time.”
Three films released in 2022 passed the $1.0 billion mark. In addition to the Avatar sequel, they were Top Gun: Maverick ($1.5 billion) and Jurassic World: Dominion ($1 billion). “These three films, then, had worldwide revenue of around $4.7 billion,” PwC notes. “As a point of comparison, in 2022, total box office revenue was $7.4 billion in North America, $4.5 billion in China and just over $6.5 billion in Europe, the Middle East and Africa.”
PwC’s key takeaway: “The revenue generated by these three films reconfirmed the tentpole nature of a cinema-going market in which a handful of titles accounts for 90 percent or more of all revenue.”
Improving supply of movies
In 2022, exhibitors in North America and Western Europe were complaining about film supply issues, leading to a shortage of new blockbuster titles. “In 2023, though, supply line issues should be resolved,” PwC’s Outlook report predicts.
Why? “There is again a strong pipeline of superhero movies, despite Warner Bros. shelving Batgirl amid a ‘strategic shift’ in mid-2022,” the firm mentions. “Other films in the pipeline include big-budget animated features and high-profile sequels. This should ensure no further box office lulls like the ones experienced in the summer of 2022.”
In the U.S., things are also trending back to normal. “Over the forecast period, releasing patterns are expected to become closer to those experienced in pre-pandemic times,” PwC writes. “But longer term, there will be some instances of a shortening of the theatrical window.”
Admissions remain under pressure
“Global cinema admissions dropped precipitously in 2020 and 2021, plummeting to 1.9 billion in 2020 from just over 7.9 billion in the two preceding years,” PwC’s report states. “Admissions are forecast to be at 7.2 billion in 2027, still at a lower level than before the pandemic.”
For the U.S., PwC notes that “in spite of the slower-than-anticipated post-pandemic recovery, the sector is expected to show steady growth over the forecast period.”
Its conclusion: “The underlying appetite for film-going remains, as does the audience’s willingness to pay premium prices for the big-screen experience.”
China to bounce back
“China has been driving global box office revenue over the past decade,” explains PwC. “Total cinema revenue in China overtook that achieved in North America in 2020 and grew in 2021.”
Then came COVID. “Chinese box office dropped dramatically in 2022 because of COVID-19, which closed cinemas for large parts of the year, and because of quota and censorship policies that kept several of the highest-profile U.S. movies out of the Chinese market,” the PwC report explains.
Now the tide will turn once more, predict the Outlook experts. “China will again lead global total cinema revenue for much of the forecast period,” forecasts PwC. “Cinemas are reopening. In early 2023, U.S. movies were again being allowed into the Chinese market, and homegrown blockbusters such as Full River Red and The Wandering Earth II, were also doing strong business.”
Source: Hollywood Reporter
