Cinemagoers Are Back but Theatrical Biz Still Faces Challenges

Industry representatives at the Zurich Film Festival are optimistic that moviegoers are returning to cinemas and signs are aplenty that business is improving as the international theatrical sector recovers from the impact of the pandemic and two Hollywood strikes.

Discussing the disruption and current state of the sector at the Zurich Summit industry forum were Rebecca Kearey, head of international and business operations at Searchlight Pictures; Neon CEO Tom Quinn; Stefanie Fahrion, head of distribution and sales at Film4; and MK2 Chairman Nathanaël Karmitz.

Business may not be back to normal, but it is picking up and there are positive signs, according to Kearey.

“The pressures are enormous and have been enormous and continue to be fairly large. I think though, like everything, resilience and creativity come through, trumping some of that.”

The cinema lovers are still out there and still coming to theaters, she said. “It may be taking a little bit longer to get some of them back, but we feel like we are getting them back over time.”

The impact of the COVID crisis and the strikes that followed left the sector in a trench, she added. Yet things already began to improve a year ago.

“Last fall was the beginning of what I thought was our business coming back with some of those phenomenal award season movies that were released … and really delivered for audiences. So I feel like we’re coming out of this trench. We may not be fully out, but we’re definitely coming out.”

Kearey also pointed to the differences between international audiences, noting that local cinema played a part in sustaining regional markets.  

Quinn agreed: “The easiest way for me to illustrate that focusing only on domestic box office would be to look at the average gross per film last year in 2023, which was $15 million per film. The highest mark in the last 24 years was $19 [million].” The rest of those years saw box office revenue range between $16 million and $17 million, he added.

The highest total in that period was in 2018 with about $11.8 billion across 993 movies, he noted. Last year, total box office reached $8.9 billion with only 591 movies. “So even though it’s a 41% less number of movies, it’s only 25% less total box office. So to me, that actually is quite encouraging.”

Offering additional figures, Quinn pointed at the strong performance of independent films this summer, making the case that the market is indeed picking up. Sony Classics scored its best grossing film since 2018 with “Wicked Little Letters”; Magnolia Pictures had its best grossing film since 2018 with “Thelma” at $9 million; and IFC Films enjoyed its highest grossing film since 2014 with “Late Night With Devil,” which conjured up $10 million.

“We had our biggest film ever, $74 million with ‘Longlegs,’ but we also had another great success with ‘Immaculate,’ $15 million.”

Offering a U.K. perspective, Fahrion likewise provided an optimistic outlook. She noted that awards films appear to have had a slightly easier time in the U.K. post-pandemic and that younger audiences were coming out for films.

“We saw, for example, with ‘The Zone of Interest,’ where [people under 25] were going to see that film, were going to Q and As. So I think that kind of traditional adult specialty awards audience, whatever you call it, is changing and is being mixed up with younger audiences who are coming back, or not coming back, but are just discovering the joy of going to cinemas.”

Fahrion noted that films like “Aftersun” and “Kneecap,” both debut features, have earned strong box office revenues in the U.K. “So again, that’s a kind of younger audience mixing with a specialty audience. And I think that at Film4 definitely gives us cause for optimism as well.”

For MK2, a producer-distributor that also operates cinemas in France and Spain, it’s been a little tougher, said Karmitz.

“It’s been very difficult for the past years because it’s a fixed-cost business and it’s an offer business and we don’t have enough movies.”

There are, however, different situations for the company, he added. “The first one is that it’s going great for independent movies, independent cinemas. And we see that people, regular audiences for cinema are there and willing to come.”

At the same time, it’s a global industry and the global theater industry is facing a huge challenge in totally transforming itself, Karmitz explained. “It’s the same thing every 20 years. You go from complex to multiplex to all these luxury cinemas and extras.”

In those periods of transformation, where huge investments are needed in the theatrical business, it’s a struggle, he said.

“So I think people are here, movies are coming back, the situation is not yet as before, but it is coming back and there’s no doubt about it. And we all see that younger audiences are there despite everything that has been said all over the world for the last 10 years.”

While there’s a big appetite among cinemagoers, there is also a big need for change and investment in theaters themselves, and that’s a challenge, he added.