2024 is set to be a poor year for cinema. This is already evident after the first six months. Even the previous year was lacklustre compared to the pre-pandemic year of 2019. According to the German Federal Film Board (FFA), the number of tickets sold in 2023 was 95.7 million, a drop of nearly 20% compared to 2019. However revenue fell by only 9.3% to 929 million euros, due to the average ticket price rising from 8.63 euros (2019) to 9.71 euros (2023).

And in 2024? The first half of the year was marked by flops. One of the biggest disappointments was the dystopian action film Furiosa: A Mad Max Saga. Despite good reviews, the film grossed only 31 million dollars on its opening weekend in the US. While it topped the box office, it was the weakest Memorial Day weekend in nearly three decades (excluding the pandemic years 2020-2022). That weekend, traditionally one of the strongest for US cinemas, saw revenues 40% below those of 2019.

The reported production budget for the Mad Max spin-off was close to 170 million dollars, which is equivalent to its global box office earnings, not accounting for promotional costs. A rule of thumb is that marketing costs 1 to 1.5 times the production costs. Hence, Furiosa likely resulted in about 200 million dollars in losses from its theatrical run.

As it became clear that Furiosa would fall short of expectations, theories over why it failed quickly emerged. Typical prequel issues with a new cast (without the titular anti-hero of the series) were identified, along with the realisation that the Mad Max series, despite its cult status, had never actually been a major crowd-puller. Furiosa also only appealed to a limited number of new viewers outside its predominantly older and male fanbase. But these insights were something Warner Bros. could have anticipated before starting the project.

Another failure was Sony’s superhero film Madame Web, which was also panned by critics and audiences. The production costs ranged from 80 million to 100 million dollars, with global box office earnings around 100 million dollars. The marketing spend was relatively low at 60 million dollars, with 75% of that going to social media advertising. Such a minimal promotion relative to production costs usually indicates that problems were already evident during production – with direction, script, or actors – or poor test screening results.

A film that went by largely unnoticed was Apple’s spy comedy Argylle. Originally intended to start a new franchise, it became Apple’s biggest financial failure due to its disastrous box office performance – reportedly grossing just 100 million dollars worldwide against production costs of 200 million to 250 million dollars.

Taking marketing costs into consideration, Argylle cost Apple approximately 500 million euros in total, and recouped only a fifth at the box office. Plans for a franchise with sequels, series, spin-offs, etc., have unsurprisingly been shelved.

Other films with supposed blockbuster potential also disappointed, such as Ghostbusters: Frozen Empire (grossing just over 200 million dollars) and The Fall Guy (about 150 million dollars) – a loose film adaptation of the 1980s TV series which ran in Germany under the title Ein Colt für alle Fälle. Why the action comedy did not use the well known series name in the German market, which would have drawn attention from middle-agers and older, only those in charge of the publicity can answer.

Better than expected was Warner Bros.’ Dune: Part Two, grossing 725 million dollars worldwide, making it the biggest box office hit of the year so far. Godzilla × Kong: The New Empire (produced by Legendary Pictures; distributed by Warner Bros.) and Kung Fu Panda 4 (Dreamworks/Universal) each grossed around 550 million dollars, placing them second and third. However, the fourth ranked, Disney’s Planet of the Apes: New Kingdom, fell short of the 400 million dollars mark and performed well below its predecessor Planet of the Apes: Survival,“ which grossed about 500 million dollars.

Notably, a few small-budget films achieved respectable box office results, such as the biopic Bob Marley: One Love (nearly 180 million dollars worldwide), the science fiction action film Civil War (110 million dollars), and the drama Challengers – Rivals (70 million dollars). But unlike in previous years, none of these films became massive surprise hits.

The most successful German film in the first half of the year was Chantal im Märchenland, a spin-off of the Fack ju Göhte series. It attracted nearly 2.6 million cinema goers in Germany, making it one of the top three domestic box office hits. At first glance that appears to be a big success. But it falls far short of the audience numbers for the three original films: Fack ju Göhte (2013) drew audiences totalling 7.4 million, „Fack ju Göhte 2“ (2015) 7.7 million, and „Fack ju Göhte 3“ (2017) still drew 6.1 million. The bar for success has clearly been lowered.

Upcoming potential blockbusters include A Quiet Place: Day One (June 27), Deadpool & Wolverine (July), Alien: Romulus (August), Joker: Folie à Deux (October), and Gladiator II (November). Nonetheless, after the experiences of the past two years, audiences seem weary of sequels, prequels, spin-offs, remakes, reboots, superhero films, and bombastic action films. Consequently, even strong box office numbers of predecessor films are no guarantee of similar success for the new releases. The surprise hits of 2023 – Barbie and Oppenheimer – show what people crave – new stories that avoid excessive CGI (Computer Generated Imagery) and are compellingly told.

The biggest challenge for cinemas is streaming, i.e., the continuous transmission of films and series over the internet. The largest providers include Netflix, Disney+, Amazon Prime Video, Paramount+, and Apple TV+. Since all major film production companies now have their own streaming services, there is a potential conflict of interest. On one hand, a new film should be available for streaming as soon as possible. On the other, the longer a film runs in theatres, the higher the box office revenue – albeit decreasing over time. Ten years ago, successful films ran for many weeks. The film appeared on DVD no sooner than six months after its release and approximately two years after its theatrical premiere, it aired on free TV. These release windows have become much shorter, not least because streamers need content (audiovisual content). Today, the average time between a cinema premiere and appearance on a streaming platform is 30 days. The film is available for purchase or rental even before that.

However, the average of 30 days slightly distorts the picture. Some cheaply produced films are shown for a very short time and sometimes only in a few cinemas, although there is no prospect of significant revenue because they can be better marketed as „cinema films“ afterward or because actors are contractually assured of participation in a „cinema film“. These films then quickly move to the home entertainment market and streaming platforms, shortening the average release window.

An example of the timeline for an A-film: The aforementioned Apple-produced spy comedy Argylle was released in German theatres on February 1 and in US theaters the following day via Universal’s distribution. The digital home release was on March 5, 34 days after the cinema premiere, and on April 12 – a total of 41 days later – it was available on Apple TV+ for streaming.

When discussing the reasons for declining cinema attendance, ticket prices cannot be ignored. In Germany, the average ticket price in 2023 was 9.71 euros, according to the FFA. Many cinema goers pay significantly more, depending on the region, day, time, and cinema density, as well as the film itself (3D, blockbuster, etc.). A family (two adults, two children) pays almost 40 euros on average just for tickets. That's not cheap. Adding drinks, snacks, or ice cream quickly brings the total to 60 euros or more.

For many families, it makes more sense to wait four to six weeks after the cinema premiere to watch the film in the comfort of their own home as a purchase or rental video for the price of less than two tickets or via streaming. If the film is included in an existing streaming subscription, no extra cost is required. Even if not, the monthly subscription fee for most streaming providers is less than the cost of two cinema tickets.

The significantly increased cinema prices in recent years are not due to profit greed. Operators are passing on increased costs, with energy and food being the smaller part.

And film studios are facing a tremendous increase in production costs. It's not new that stars like Tom Cruise, Johnny Depp (before the trial against ex-wife Amber Heard), Vin Diesel, and old stalwarts like Harrison Ford, aka Han Solo, aka Indiana Jones, command princely sums for their appearances in their iconic roles. But over the past two decades, the demands for special effects have become so high and consequently expensive that they constitute a significant portion of cost increases. Among the 15 most expensive films in history, only two are older than nine years. The list includes five Star Wars films and four from the Marvel Universe, which would be unthinkable without special effects. All 15 films share the commonality of relying on action sequences and elaborate set designs.

In addition, production companies are equally affected by cost increases in energy and logistics, similar to other economic entities. This cost escalation at the beginning of the film value chain is continually passed on through price hikes, ultimately reflected in the price of a cinema ticket.

Cost-increasing effects of new technologies also play a role. When 3D technology was rediscovered towards the end of the 2000s and numerous blockbusters, led by James Cameron's Avatar (2009), utilised it, a huge hype around spatial presentation ensued. No cinema could afford to be without 3D projectors. This hype has long proven to be a passing trend, and the once exorbitantly expensive machines now largely sit idle.

The 3D flop should have taught cinema operators a lesson not to hastily adopt costly trends. Similar caution applies to movie fans. Currently, the market is flooded with virtual reality (VR) goggles and headsets. Naturally, there is an allure to experiencing the unfamiliar, and immersion into an artificial (film) world is enticing. However, practical barriers exist. Wearing a headset is physically demanding. Progress in weight and comfort has alleviated but not resolved this issue. The technologies for 3D films and VR experiences have existed for ages. There's a reason why they have never permanently established themselves.

Besides ticket prices, another aspect dampens the cinema experience, which is the increasingly antisocial behavior of some patrons. It's increasingly common to encounter individuals in theatres who show no consideration for others. People talk loudly during films, consume popcorn or nachos noisily, and keep their phones active, checking Instagram every two minutes or even making calls. Such behaviour can ruin the movie experience even for the most dedicated cinema goers.

Of course, there are still theatres where such behaviour is penalised. Initially, a warning is issued, followed by a request to leave on a second offense. But many cinemas no longer enforce such sanctions. Is this due to the assumption that those who shamelessly violate the simplest rules of decency will not shy away from minutes of loud arguments that would disturb other guests if they are expelled from the cinema, and may even have a low inhibition threshold when it comes to violence?

According to Destatis, Star Wars: The Force Awakens (2015) is the most expensive film of all time, with production costs alone (excluding equally high marketing costs) totaling around 533 million dollars. Consequently, the film (produced by Lucasfilm and distributed by Disney) needed to gross at least 1.1 billion to 1.4 billion dollars at the box office to break even. While this can happen, as seen with Star Wars: Episode VII, it remains a high-risk gamble.

In third place among the most expensive film productions is Indiana Jones and the Wheel of Fate from last year, costing over 400 million euros. This film epitomises many of the issues currently plaguing Hollywood. It is a completely unnecessary sequel that nobody needed (similar to the Star Wars sequel trilogy); its storyline is simply ludicrous; costs have spiraled out of control, as despite a tremendous amount of effort, the film doesn't really show its spectacularly high production budget; and last but not least, it disrespects a character who was a childhood hero for many people now over 50 years old. The dismantling of familiar cinema heroes, with corresponding feedback from the fanbase, was already seen in Episode 8 of the Star Wars prequels, The Last Jedi, (in this case Luke Skywalker).

The cherry on top is the well-intentioned but poorly executed emphasis on diversity and gender parity in casting. In Wheel of Fate, there's a female lead character likely intended to succeed Indiana Jones, but she came across so unsympathetically to the audience that there will certainly be no sequel or spin-off featuring her.

Such inexplicably negative character portrayals were also one of the reasons behind the mega-flop The Marvels (2023), where all the main roles were played by women. With global earnings of just under 210 million dollars (against estimated production costs of 270 million dollars), The Marvels is the financially weakest Marvel film to date, and a financial disaster for the studio.

Disney, in particular, is accused of overly focusing on diversity even if it comes at the expense of the story or the film itself. Indeed, projects from Disney-owned studios such as Marvel, Lucasfilm, Pixar, and the acquired 21st Century Fox have been particularly attentive to gender equality and the inclusion of minorities for the past three to four years. Parts of the moviegoing audience find this excessive. Several films, including the science fiction action film Eternals (Marvel; 2021) and the animated film Strange World (Walt Disney Animation; 2022), may have also underperformed at the box office for this reason. Whether the catchphrase „Go woke, go broke“ holds true or turns out to be a myth remains to be seen.

Due to its many weaknesses, the fifth installment of the Indiana Jones series was nominated in two categories at the Golden Raspberry Awards for Worst Remake or Sequel and Worst Screenplay. Film critics consider Indiana Jones and the Wheel of Fate the weakest part of the series, casting a somewhat brighter light on its predecessor, Indiana Jones and the Kingdom of the Crystal Skull (2008), which received many negative reviews upon release. However, this isn't a good sign for the current film. Similar sentiments apply to the initially heavily criticised Episodes 1 and 2 of the Star Wars prequel trilogy, which were somewhat redeemed by the even harsher criticism from both critics and audiences of the sequel trilogy.

Based on recent experiences with long-established franchises such as Star Wars, Indiana Jones, or the Marvel Cinematic Universe (MCU), it's difficult to imagine that the frequently disappointed audiences will return to the theatres as they did in the first two decades of the century.

The question of whether and when a film has flopped is easily answered from the perspective of theatre operators – it's when it's pulled from the schedule and the cost-benefit analysis is made. But from the perspective of a corporation that produces a film through a subsidiary and has the option for second-hand sales through a streaming platform – not to mention sales and rentals – the narrative of what constitutes a flop has changed. Films that sank at the box office can become hits on a streaming platform, such as the animated film Wish (2023) on Disney+ or Madame Web from Sony/Marvel on Netflix. However, the public generally does not find out about this because streaming providers almost never publish their sales, rental, and viewing figures for individual films.

For the corporations and their studios, theatrical revenues are increasingly becoming secondary to revenues from streaming platforms and other digital sales. This has significant consequences. Theatre operators must give studios/ distributors around half of their box office revenues. In contrast, more than 70% of digital sales revenues go directly to the film production company. Therefore, economically, it may not make sense to keep a film in theatres until every potential viewer has seen it.

Streaming providers have established themselves as a fixture in the entertainment industry alongside theatres and linear television. Nevertheless, it remains to be seen how much potential they still have for acquiring new customers. Netflix and the rest will likely come to realise by next year at the latest that achieving endless growth is not feasible.

But the problems for theatre operators are likely to worsen. Unlike in previous downturns, some of the causes leading to half-empty cinemas are likely to be permanent. And it's not a good sign that Sony has decided to gradually withdraw from the cinema projector business. While the Japanese still offer some products, they're not developing new ones anymore. As a result, the number of major manufacturers of professional digital cinema projectors will shrink to three: Barco, NEC, and Christie.

Some movie theaters are trying to retain visitors by offering more services and comfort. Especially multiplex cinemas now have reclining chairs, adjustable footrests, or small stools. There are menus for snacks and drinks, with orders delivered to seats. Naturally, these extra services come at a cost to the theatre operator, and whether they will save them from closure remains questionable.

It's expected that the number of cinema operators in Germany, which has remained fairly stable at just over 1,200 in recent years, will decrease due to acquisitions and business closures. Similarly, the number of locations, which was just under 950 recently, is likely to decline. The same applies to the number of cinemas (just under 1,750) and cinema screens (4,900).