‘Godzilla vs. Kong’ is a hit, but movie theaters’ fate is still far from certain

The Warner Bros. sequel has sold at least $49 million in tickets in the United States since coming out a week ago. That is now the biggest seven-day total for any new film since coronavirus lockdowns struck in March 2020, a feat all the more notable given that the film is playing simultaneously on the company’s HBO Max steaming service.

But those box office totals remain small by both normal standards and the metrics of the Legendary-financed picture’s $160 million production budget, in the process offering as many caveats as reassurances.

“On one hand it’s very exciting and thrilling because it says theaters are back,” Chris Johnson, chief executive of Classic Cinemas, which operates more than 100 screens in Illinois and Wisconsin, said of the results. “On the other hand I do caution everybody that we have to see if this is sustainable.”

For the past year the question has been whether theaters can reopen. Now that they increasingly can, the question is whether consumers will come back — and more important, keep coming back — or whether a year of gorging on high-end streaming content has dimmed their interest.

Studios have attempted to put films in theaters over the course of the pandemic, often in conjunction with free or paid availability on digital platforms. The results were less than stellar.

Warner Bros did it with “Tenet” (no simultaneous digital) and “Wonder Woman: 1984” (simultaneous digital), Disney tried it with “Raya and the Last Dragon” (digital), and Universal with “The Croods: A New Age” (no simultaneous digital). All of them have yielded modest box office — the highest domestic totals were for “Tenet” ($57 million) and “Croods” ($56 million), a fraction of typical figures.

Warner Bros. was keen to call the film a theatrical smash. Though the movie had “a larger viewing audience than any other film or show on HBO Max since launch,” according to direct-to-consumer leader Andy Forssell — 3.6 million views, said data firm Samba — it also marked a great return to theaters.

“The numbers don’t lie,” said Jeff Goldstein, WB’s president of domestic distribution. “It’s clear that wherever audiences are ready to safely return to the theater, they have.”

“Godzilla” is certainly a hit by the standards of 2020-2021, experts say. But there are questions over what that means when so many theaters are still closed or limiting capacity, lowering expectations and, with so few movies out, eliminating competition.

In an attempt to find meaningful comparisons, Bruce Nash, who runs the box office analysis site the Numbers, built a model to determine the strength of moviegoing.

He looked at comparable movies (previous “Godzilla” and other big-budget monster movies, for example) to calculate average non-pandemic box office. Then he factored in the fewer seats and screens to come up with an expected figure.

So if a movie is normally being shown on 4,000 screens, as many big-budget blockbusters are, but are now shown on 3,000, as “Godzilla” is, he would lower his expected figure by 25 percent — and then cut that again based on the limited-capacity requirements in theaters where it is being shown.

What he found in recent weeks was that, overall, movies have been at about 29 percent of their non-pandemic box office.

“Godzilla’s” totals, however, were strong enough that they single-handedly pushed that number up above 35 percent, suggesting the health of overall box office is dramatically improving.

But there is a mathematical flaw to inferring a healthy general return based on an individual film, Nash notes. Normal times, after all, see the release — and need for success — of several big movies at once. And it’s unclear there’s enough audience for all of them.

“The question is if there was another big movie out at the same time, would that bring a whole new group out to see that?” he said. “Or would it just cut into Godzilla’s numbers?” In other words, the overall number of people willing to see movies in theaters may in fact have shrank but is being disguised by the lack of competition.

Nash said based on these factors, it was difficult to know whether moviegoing has taken a permanent hit from the pandemic. But he remains optimistic.

“I do believe that we can get up to 70 percent of normal box office by July, and then grow from there in September and October,” he said.

He added that he based the fall target on international openings, with countries such as China approaching pre-pandemic box office levels about six months after reopening. (The country this year has seen movies even surpass that standard. The cop-buddy sequel “Detective Chinatown 3” has taken in $685 million in the country since coming out in February, a significant bump over the $541 million of its predecessor in 2018.)

That slow ramp-up would make guinea pigs of the major studio releases on the upcoming calendar, including “A Quiet Place Part II” next month, the “Fast and Furious” sequel “F9” in June and the long-awaited “Top Gun: Maverick” in July.

“Godzilla,” meanwhile, has grossed more than $235 million overseas — nearly a third of that in China — suggesting that the appetite for theatrical moviegoing abroad, at least in places not besieged by covid-19, is strong.

Those who work with theaters say they don’t see “Godzilla” as a one-off.

“There’s no doubt the industry had a big dip over the last year. It’s shaken the foundation a little,” said Wim Buyens, the chief executive of the laser-projector company like Cinionic who follows the industry closely. “But a movie like ‘Godzilla’ says the fundamentals of the business are sound.” He said he expects a nearly full return to the business in 2022 and is producing technology for it accordingly.

There remain forces lined up in opposition, however. Last week, Netflix paid $450 million to buy the sequels to the 2019 mystery smash “Knives Out.” In addition to taking one of the biggest original theatrical hits out of movie theaters, the move further reinforces to consumers streaming’s big idea: that the most desired films can be viewed at home.

Nash allows that theatrical moviegoing could still be down as much as 20 percent to 30 percent next year, as consumers up their streaming spend instead.

And it remains to be seen what role traditional studios’ decisions to put theatrical movies simultaneously on streaming will play. (Disney has just opted to do that with Marvel title “Black Widow,” another potential cannibalization.) “Godzilla” would have nearly doubled its opening-week box office if every one of the 3.6 million people who watched at home had come out and bought a ticket, though of course there’s no way to know how many would have.

It’s not certain if studios, under pressure to grow streaming subscriber numbers, will still be willing to make a lot of their movies exclusive even after vaccines are widespread, or if they would choose simultaneous release, “day-and-date” in industry parlance. That would create a situation in which the movie theater business faces one of its greatest existential threats from an unlikely source: its own suppliers.

“I think the ‘Godzilla’ numbers prove that movie theaters are a good business model,” said Johnson, the theater owner. “But I think it also proves that day-and-date isn’t viable. I just hope studios understand that and bring back exclusivity.”

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