The accelerated growth of digital streaming services raised many alarm bells that ‘the film industry is dead’. But cultural moments like #Barbenheimer remind us why it’s not going anywhere.
That portmanteau, of course, refers to the two major blockbusters of this American summer. Hitting cinemas last week, $MAT’s Barbie and $CMCSA’s Oppenheimer grossed US$537m combined worldwide on their opening weekend, breaking a number of box office records. For the former, it was the highest-grossing debut for any toy-based movie, while the latter made history as the largest global opening for a biopic. Investors have responded accordingly – $MAT and $CMCSA have recorded strong gains in recent weeks despite the Hollywood writers’ strike sending $DIS and $PARA to 52-week lows.
COVID-19 brought a spike in subscribers to the likes of $NFLX, $DIS (Plus) and $AMZN (Prime). But these box office records prove that, rather than spelling doom for cinemas, the pandemic just accelerated the consumer mindset shift from commodity-based to experience-based. Meaning that, if a movie release is seen as an event, people will turn up.
And why wouldn’t we? If we were so content with home-based entertainment, then ticket prices for concerts and music festivals wouldn’t continue to soar after the emergence of $SPOT. Restaurants and cafes would no longer have customers who dine in, with $UBER delivering most meals to people's homes. And sporting events wouldn’t be attracting big crowds into stadiums. In fact, the emergence of television decades ago would have been enough to decimate the film industry. Yet cinema doesn’t die – it evolves.
There’s no denying, however, that global box office revenues remain 30% below pre-pandemic numbers. The outlook is mixed, with some researchers estimating a recovery by 2025, while others believe cinema will only survive by developing into a leaner, higher-quality business model; one that recovers market share by enhancing the experience with $DLB Atmos speakers, laser projections and plushier seats.
Watching in a Christopher Nolan-approved IMAX cinema to avoid ‘Croppenheimer’, or being pretty in pink alongside hundreds of other Barbie fans, are just the sort of experiences some movie lovers need to get off the couch and out the door.
Stella is a markets analyst and writer with almost a decade of investing experience. With a Masters in Accounting from the University of Sydney, she specialises in financial statement analysis and financial modelling. Previously, she worked as an equity analyst at Australian finance start-up, Simply Wall St, where she took charge of the market insights newsletter sent out to over a million subscribers. At Stake, Stella has been key to producing the weekly Wrap articles and social media content.