Weekend estimates: Lift-off?
March 21, 2021
We’ve seen glimmers of a light at the end of the tunnel already this year, but this weekend provides the strongest sign so far that the theatrical market is starting to recover from its pandemic lows. Every returning movie in the top six is outperforming our model’s expectations by about 20%, and The Courier will come in around 40% ahead of our prediction. And our model factors in reopened theaters, so those figures indicate that an increasing number of traditional moviegoers are returning.
Here are the details…
What’s particularly encouraging about this weekend’s results is how nicely they line up ahead of our predictions. As the right-hand column in the chart above shows, every film out-performed expectations, and they did so very consistently. That’s a strong indication that this weekend marks a genuine shift in the market rather than case of one or two films happening to do better than expected. By comparison, Tom and Jerry’s opening weekend saw a couple of movies come in ahead of expectations, but most films underperforming. That weekend was enough to convince me that family films are doing better than other genres during the pandemic, but that alone was enough to account for Tom and Jerry’s out-sized debut. This weekend strongly suggests that the market as a whole is getting better.
The key questions this prompts is how much better is the market already? And, how quickly will it grow going forwards?
Our model is cautious about reading too much into a single weekend. The reason for this is that the model is working with a small amount of data—simply put, not many movies have been released in theaters during the pandemic. It would be bad practice to have build a model that pretends to be very sensitive when there’s not much data to go on.
By way of example, perhaps this weekend’s good performance is simply because Los Angeles theaters earn more on average than theaters in other areas. The model doesn’t take that into account—it assumes each theater earns about the same wherever it is in the country—so a boost from high-performing theaters wasn’t part of its prediction. Warner Bros. reported this morning that five of the top ten theaters for Tom and Jerry are in California, and that Los Angeles is now the number one market for that movie. So clearly the overall market uptick had something to do with the newly-opened theaters drawing larger audiences than the ones that were already open. According to the studio, open theaters now represent about 92% of the usual total market, compared to 80% last weekend. Based on that figure, one would expect the market to improve by about 15% this weekend. So an overall increase of 23% (per our model) would come about 15% from reopened theaters and 8% from additional audience enthusiasm.
Our pandemic adjustment will tick up again based on this weekend’s results, but only a modest amount. The model estimated 26% of moviegoers are currently going to theaters going into this weekend, and it now puts that share at 27%. As I said earlier, that small change is mostly because the model is cautious about reading too much into a single weekend—that 8% measured increase in audience enthusiasm could just be statistical noise! But it’s worth noting that if we just looked at the films released in March our pandemic adjustment would now be 37%. That honestly feels a shade high to me, but I wouldn’t be surprised if the share of the usual movie-going audience now willing to go to theaters is closer to a third than a quarter.
As for the growth of the market going forwards, the model I built last Summer estimates that box office can increase at around 32% a week during early part of the recovery phase, and take about six months to fully recover. While that model could do with an update now we have data from more international markets, I still think that’s a reasonable baseline assumption. If so, we should see a few more weekends like this one, with returning films holding their box office steady and new releases doing comparatively well, and the total box office perhaps doubling each month for the next two to three months, before moving around the bend of the S curve and settling down at whatever the “new normal” level turns out to be in September or October.
Bruce Nash, bruce.nash@the-numbers.com
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Filed under: Weekend Estimates, Ironbark