Why the fate of ‘mid-tier’ films at the cinema matters
The British Film Institute suggests there are less films grossing ‘middle ground’ totals arriving in cinemas – which may be a sign of things to come, argues James Moore
Is Disney’s hit Prey really a predator that is eating into the returns of Britain’s – and the world’s – cinemas?
That looks like a bit of playful hyperbole to describe the cinema-skipping movie, which is the latest, and maybe the best, iteration of the long-running Predator franchise birthed in the late 1980s with a muscular action flick featuring Arnold Schwarzenegger in his pre-governor of California days.
But here’s the thing: thanks to research conducted by the British Film Institute (BFI), I think I can back my assertion up. Prey would probably become a part of cinema’s “middle ground” had it been released, grossing somewhere between £2m and £20m in the UK.
Working in its favour is the fact that you’ll do well to see a more viscerally enjoyable movie this year. The critics seem to agree. Ditto those who’ve streamed it on the Disney Plus Star channel in the UK, or Hulu in the US.
On the other hand, while there’s no BBFC rating, because it hasn’t appeared on screen, Disney has it at 16+. So a 15 rating is a reasonable assumption, which (usually) puts a ceiling on the audience. Prey is a prequel that charts a new course of its franchise, but previous Predator outings (with the exception of the first) haven’t exactly set the world alight in terms of financial returns. Let’s say £10m-£15m UK? That’s a very good return, and not unreasonable, putting the film solidly in the aforementioned middle bracket.
The trouble for cinemas is that this type of movie has gone missing – and the consequences for the overall box office have been profound.
Over to the BFI research. Happily for lovers of movies, it shows that there is clearly a post-Covid future for the silver screen. In fact, if we look at the performance of the real blockbusters, films grossing more than £20m in the UK, it’s almost as if Covid-19 never happened.
These mega-hits, the movies people talk about seeing around the water cooler on their in-the-office days, are relatively few in number but they have an outsized impact on the overall gross for UK cinemas (as well as the cultural conversation). For this class of film, 2022 has been a hit. Perhaps that shouldn’t come as a surprise given the performance of films like Top Gun: Maverick.
The BFI’s numbers for the first half of the year show that there were nine movies in this class, eight of them new to 2022 plus one from 2021 (Spider-Man: No Way Home, another box office banger released at the end of the year). Combined, they grossed £311.9m (with just Spidey's 2022 numbers included in the total).
That number is comfortably (24 per cent) ahead of the first half of 2019, when six films in this class combined to generate £235.9m. One of those 2019 films was the world-conquering Avengers: End Game. The 2022 number is actually only slightly behind 2018, when eight such films (six new to the year) combed to produce a record setting £313.8m.
But while 2022 has been a fine year for blockbusters, when it comes to the overall box office, the post-Covid hangover is clearly still there. The first half total – £509.3m – is markedly (25 per cent) behind the 2019 return (£643.4m) over the same period. It also trails 2018 (£679.1m).
The reason is the absence of films like Prey. Mid-tier hits that help to keep the popcorn flowing. This year, films in this class combined to generate £147.7m. The number for 2019 was more than twice that – £320.4m. Ditto 2018, which delivered: £303.3m.
It isn’t hard to work out why. In 2022 the “middle ground” has gone missing. The 2019 gross was the work of 44 films, 38 of them new to the year. The 2018 figure was produced by 44 pictures, 40 of them new to the year. This year has seen just 24 of these films, of which 23 are new releases.
The obvious reason for this is streaming. This was always going to have an impact. Netflix has long been buying up and/or funding mid-tier films. Ditto Amazon. However, the streaming wars got started in earnest during the pandemic, which sped-up the trend. Disney Plus launched in 2020 in the UK just as Covid was cranking up (having debuted in November 2019 in the US). It wasn’t alone. It soon seemed as if every US entertainment giant had to have a giant subscription streaming service, all of them in need of bespoke content to lure subscribers in an increasingly crowded market.
While the pandemic presented Disney and its rivals with a challenge, it also offered them the opportunity to turbocharge their streaming subscription growth by tempting people stuck at home with films that would otherwise have had a cinema release. This included some mega-budget blockbusters as well as their middle-ground peers. A variety of strategies were tried with the bigger-budget films. In 2020, the live-action version of Mulan, for example, went direct to Disney Plus in territories where the streaming service was operating. Subscribers were initially offered “premier access” – being asked to pay an additional fee for an early viewing before the film was made available to all. It had a theatrical release only where the steaming service had yet to launch.
The thrice-delayed Marvel outing Black Widow brought a new twist: it was released simultaneously in theatres and through premier access, not without controversy. The move led to the film’s star Scarlett Johansson filing a lawsuit in a bid to recover earnings she said she had lost as a result (stars frequently receive a cut of the box office gross).
Disney copped considerable flack for its initial response, which involved an ill-judged dig at Johansson for standing up for her rights. “The lawsuit is especially sad and distressing in its callous disregard for the horrific and prolonged global effects of the Covid-19 pandemic,” said the company.
“Scarlett Johansson is shining a white-hot spotlight on the improper shifts in compensation that companies are attempting to slip by talent as distribution models change,” said Screen Actors Guild president Gabrielle Carteris in response. The dispute was eventually settled out of court, with Johansson saying she “was happy to have resolved” her differences with Disney.
Warner Bros, meanwhile, moved its entire 2021 slate onto its HBO Max platform in the US for the first month of each release, concurrent with their debuts in cinemas where open. They would then be taken off Max, before making a swift return, presumably to mimic the exclusive window cinemas used to demand.
These experiments taught studios a lesson: they still needed movie theatres, which still needed an exclusive window (albeit a much shorter one now). If you’re going to pump nine figure sums into productions, you need the box office revenue cinemas can produce to defray those costs. But that’s not all. A cinematic release helps to establish your property in the pop-cultural conversation, with the help of traditional media hype, social media conversation, critical commentary, publicity and general brouhaha. This is important for franchises in particular. So today’s big budget movies are seemingly back to going to cinemas first.
The economics of the middle, however, are somewhat different.
Theatrical releases inevitably ramp up costs and thus risks. Even fine, critically acclaimed films can end up losing money. A couple of last year’s Oscar contenders provide a good example. Paul Thomas Anderson’s sparkling Licorice Pizza was romantic, funny, and wildly entertaining. It was also lauded by critics. But its $33m (£28m) box office return failed to live up to its reported $40m budget. Guillermo del Toro’s star-studded neo-noir Nightmare Alley sadly suffered the same fate.
Prey came to Disney ready-made as part of its acquisition of the entertainment part of Rupert Murdoch’s Fox. With no pressure to offset production costs, which were already booked, or to spend its own money on a cinema campaign, the film went straight to its various streaming channels.
But Disney has done this with its own properties too. Two of the last three Pixar produced animations, Luca and Turning Red, were released exclusively via Plus rather than being given a cinematic run with the attendant promotional costs. The exception was Lightyear, a spin-off from the long-running Toy Story franchise, and a big disappointment (including at the box office).
It is also possible that the increasing money streamers have made available for mini-series is playing a role in the scarcity of mid-tier films hitting cinemas. These now regularly frequently feature A-list writers, directors and, crucially, stars, who in an earlier era may not have taken on such projects.
Apple’s chilling Taron Egerton-fronted Black Bird, written and developed by Dennis Lehane from the James Keene memoir In with the Devil: a Fallen Hero, a Serial Killer, and a Dangerous Bargain for Redemption provides one recent example. In an earlier era this might have been a film. A latter-day Silence of the Lambs.
But are studios cutting off their noises to spite their faces by eschewing the silver screen for the mid-budget properties made as movies? Said one industry figure to me: “Remember Birdbox? Where’s that gone now?” Good point.
The Sandra Bullock vehicle is an entertaining post-apocalyptic horror that received rather mixed reviews but proved a big hit with viewers according to Netflix, claims which were backed by up by Nielsen.
Birdbox isn’t on a level with Prey in my eyes, but it’s an entraining romp with an intriguing premise (the sighted have to cover their eyes to avoid being driven mad by a mysterious threat) that is just the ticket for a Friday night after a long week at work. Today the film seems to have been eaten by the algorithm. With more recent releases taking pride of place, it lives in the Netflix netherworld, waiting to be dug out by those with the wherewithal to make the streamer’s search function work for them. With a full cinematic release it might have build a stronger foundation, given how important they are for grounding this sort of film in the cultural landscape just as much as it is one of those £20m plus UK grossing blockbusters.
There is also an industrial logic behind bringing this sort of film back. The world’s second biggest cinema chain – the London-listed Cineworld – has confirmed this week that it is considering filing for bankruptcy in the US. Chiefly the result of its unsustainable debt burden.
But the decline in the global box office – the North American one is of a similar order to that in the UK if not worse – has played a role. The company has said it is “welcoming guests” as normal. Those who are part of one of its membership schemes are still good. Move along, nothing to see. However, if it does go down the Chapter 11 route in the US, with what it calls “ancillary proceedings” elsewhere (including in the UK, its second biggest market), the subsequent restructuring may well see cinemas closing. The marginal performers may be doomed.
Trouble is, the message of Prey, from a Disney perspective, is that this sort of streaming-only release can pay off handsomely. It has said Prey bested every other movie and TV series release to have premiered on Hulu, Disney’s majority-owned “grown up” streaming service in the US, in its first three days on release. While racking up similarly impressive numbers in other territories, including Britain.
But a decline in the number of cinemas will not be good for the blockbuster films that generate such impressive returns for studios and require a release on the large scream. And denying cinemas their mid-tier films in pursuit of streaming dreams may not help either. Disney is clearly set fair with Disney Plus. But those dreams may turn into nightmares if the current economic situation – and alarming forecasts over inflation – force people to take a hard look at their subscriptions.
Not all the streamers will survive. America’s entertainment giants may find they need movie theatres more than they think.
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