The 2020s have not been easy for the broader exhibition landscape. With talk of an economic downturn, and even recession climate, now hogging the headlines, what does this mean for an industry only just starting to shake off pandemic effects? Brandon Blake, entertainment attorney at Blake & Wang P.A, looks deeper into the facts.
The Box Office Recovery
As the first half of 2022 recedes in the rearview mirror, it’s clear that talk of a larger-scale theatrical recovery is not wishful thinking. However, while the film and TV industry is somewhat insulated from wider economic woes, the recent depression in the economic state of the US and globally will inevitably have knock-on effects.
While quarter 2 earnings have yet to be finalized and released, we’ve seen recent downgrades to both 2022 and 2023 domestic Box Office revenue projections. This time, not from within the industry, but as part of the wider economic issues. Still, there’s no need to be gloomy just yet- these are simply aiming to project a more realistic face to the recovery in a tougher climate, rather than a sign of any lack of potential or effort.
Theaters Still Reasonably Strong
Likewise, despite this downgrade, theater stocks for those chains listed on the stock exchange have managed to maintain the status quo, with either ‘buy’ or ‘neutral’ ratings. The demand for high-profile films is still there, and the fact that the theatrical demographics appear to have widened greatly in the last few months is encouraging, too.
Currently, it’s expected that 2022’s takings will come in 28% lower than 2019s. While it is a small drop from the 20% originally predicted for the year, it’s still impressive enough from an industry many were predicting was ‘doomed’ just a year ago. 2023’s projections are even more buoyant- it’s been revised from a 3% below 2019 to a 7% below 2019, both of which are more than encouraging.
Overall, Wall Street remains bullish on most theatrical properties, and audiences seem to be returning to the theater no matter what the overall economic climate has to say. While it’s another challenge to overcome, this one doesn’t seem as insurmountable as COVID once did.
Film and Television 