2022/23 market prediction: strong Summer boosts 2022 market prediction to $7.4 billion

August 18, 2022

While Top Gun: Maverick has continued to power through the Summer, picking up records along the way and looking as though it’ll end with around $700 million at the domestic box office, it’s not the only film that has outperformed expectations. In fact, since Elvis and The Black Phone opened in theaters at the end of June, we’ve had a Summer that’s looked, well, normal. Our pandemic adjustment, which estimates how current revenue compares to historical averages, now stands at 87%, easily the highest level it’s reached. For July and August it’s running at 98%.

That increased level of current activity has boosted our market projection for 2022 up to $7.4 billion, an increase of $500 million from mid-July. In this month’s update, I’ll dig into the details of that, and also present our first predictions for the first quarter of 2023.

Here’s an overview of how everything looks right now…

The bars in the chart estimate the total box office for all films released in a particular month, and that big dark red bar in May is mostly thanks to the stellar performance of Top Gun and over $400 million from Doctor Strange in the Multiverse of Madness. June would have a very short bar if it wasn’t for Jurassic World: Dominion picking up over $370 million. Then July is helped by having two films, Minions: The Rise of Gru and Thor: Love and Thunder, bring in around $350 million each.

The bad news, of course, is that August and September (and to a lesser extent October) all look like they will be horrible at the box office. The model currently predicts that the biggest new release between now and Halloween Ends will be The Woman King, with around $50 million. The re-release of Avatar could top that number, which isn’t exactly a ringing endorsement of what’s coming up in the next couple of months.

With all that said, however, the fact that our pandemic adjustment has risen so much has caused a significant shift in our model going forwards. Here’s how much things have changed since the beginning of last year:

My assumption when theaters started reopening was that our pandemic adjustment would settle around 70% by the middle of this year. In March and April, that looked prescient, but since May it has continued to climb, and is showing signs of returning to something around 100%. That’s a remarkable recovery given what the theatrical business has been through.

I should note that our pandemic adjustment is based on revenue, and so it’s affected by the average ticket price paid by moviegoers. NATO hasn’t published a new average ticket price estimate since the beginning of the pandemic, so we’re in the dark on how much the return to pre-pandemic levels of revenue is down to increased ticket prices. It’s possible that 80% of the theater-going public has returned, and they are paying about 10% more for ticket. Or that 95% of moviegoers have returned, but are paying 10% less. That’s something we’ll need to look into.

Whatever the cause, theatrical revenue is looking healthy right now, with the lack of big new releases the biggest issue for the industry. I’m still being a little cautious in my forward-looking predictions, and I’m now assuming that the market will recover to 90% of its pre-pandemic level over time, but is already at 87%. That boosts our prediction for the year by about $300 million compared to last month, with another $200 million increase coming from better than expected performances by films released in May, June and July.

Here’s how that breaks down on a film-by-film basis for the top 10 influences on this month’s updated prediction:

I’ve also added predictions for Q1, 2023 to the report this month, and the beginning of next year is looking fairly healthy. In particular, John Wick: Chapter 4 is getting a lot of early buzz, and currently stands as the film we’re most aggressively adjusting based on current audience interest.

If you’re interested in getting more details, purchase our Bankability and Box Office report for a full list of predictions for all movies coming out between now and the end of March, 2023, the movies that our audience tracking suggests will have breakout performances, and the latest updates to our Bankability values for acting and creative talent in the industry.

Methodology

Our market prediction is based on the same model as the weekend predictions that we’ve been running since theaters started reopening towards the end of 2020. We are now running the prediction model for every announced wide release on the release schedule and estimating the size of the market as a whole by assuming a relatively small amount of additional revenue from limited releases. The prediction for each movie is based on six factors:

The performance of similar films in recent years, and cast and crew Bankability. So far as possible, the model uses films in the same genre released by the same distributor as points of comparison. The predicted performance of franchise films is based on previous releases in the franchise. Cast and crew Bankability is weighted more heavily for non-franchise than for franchise films.

The current state of the theatrical market. We update our model after each weekend with a wide release to estimate what proportion of formerly-regular moviegoers are currently going to theaters. As of today, that figure is 87%. We also monitor Morning Consult’s weekly survey of moviegoers, and may make adjustments to our analysis if our number varies significantly from theirs.

Adjustments for specific genres. The pandemic has affected different segments of the audience in different ways. We are currently adjusting movies with romantic content down by 20%, but not adjusting any other genres.

Adjustments for day-and-date streaming releases. This was taken into account when films were being simultaneously released on HBO Max and in theaters on the same day. Since that’s no longer happening, and we haven’t seen a measurable impact from films being released simultaneously on Peacock and Paramount+, no adjustment is currently being made. We are continuing to monitor this aspect of the industry.

Potential breakout hits. Films that have the potential to break out beyond what the model otherwise predicts are identified and their predictions increased accordingly. These films are currently selected based on our measurement of audience interest.

The expected recovery of the theatrical market as the pandemic is brought under control. The model assumes that the market will settle back to 90% of its pre-pandemic size at the end of the recovery. Growth was slow at first, accelerated as more people become confident in going to theaters, and then will slow down as more cautious moviegoers take time to return to attending. This is the classic ''S-shaped'' curve seen in economics textbooks (and in many cases in the real world). (For more on this see my previous article, How quickly can the box office recover?) The model assumes that this recovery started on April 1, 2021, plateaued in July due to the wave in COVID in infections caused by the Delta variant, and started again when cases waned at the beginning of October. The rise of the Omicron variant at the beginning of 2022 caused another slowdown. Those parameters are likely to be adjusted as the market situation evolves.

- Current release schedule
- Recent release schedule changes
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Bruce Nash, bruce.nash@the-numbers.com