Hollywood’s record-busting 2018, explained

A year ago, the movie business was looking bedraggled. The end of 2017 marked a three-year low at the North American box office, even amid rising ticket prices. You could blame all kinds of culprits — Netflix, bad or uninteresting movies, those rising ticket prices — but one thing seemed clear: The theatrical movie business was on the wane.

But like a hero swooping in at the eleventh hour (or maybe a zombie rising from the dead), 2018 arrived, and with it a boom time for the box office. The past year of movies busted records, shattered expectations, and challenged conventional wisdom about moviegoers and their taste.

Whether that success turns out to have been a fluke or the start of a bona fide trend remains to be seen. But looking at 2018’s movie statistics reveals an interesting portrait of a business in flux, looking for its future — and finding no certainty at all.

2018 was a record-busting year at movie theaters in North America. MoviePass may have been partly responsible.

Everywhere you looked in 2018, some record was being broken.

• More than $11.8 billion in ticket sales amounted to the biggest year on record in North America, and a 6.8 percent increase over 2017.
• The number of tickets sold was up too: more than 1.2 billion tickets, representing a 4.8 percent increase over 2017.
• At the same time, the average cost per ticket reached $9.14, the highest ever — though it’s important to note that ticket prices have been steadily climbing since 1995.
• 814 movies were released in theaters in 2018 — the most ever. That’s a huge increase over 2017, the previous record holder, which saw only 740 films in theatrical release.
• The year’s No. 1 film, Black Panther, made more than $700 million domestically before it closed. Only two other films in history have pulled off that feat: 2016’s highly anticipated Star Wars: The Force Awakens and 2009’s Avatar. Black Panther also became the third-highest-grossing film domestically of all time. It’s pulled in a whopping $1.2 billion globally.
• Four months yielded record-breaking box office tallies: February, April, June, and October.

It’s worth noting that some of 2018’s extraordinarily high ticket sales may be due to MoviePass, which started the year on a high with 1.5 million subscribers, who could get one ticket per day for a subscription fee of $9.99 per month, barely more than the national average cost of a single ticket. By June, the service’s subscriber total had ballooned to 3 million.

MoviePass

According to data gathered by the Hollywood Reporter, subscribing to MoviePass changed people’s moviegoing habits, with half the subscribers seeing more movies than they did before joining the service. That may account for some of the uptick in tickets sold. And because theaters were then reimbursed for the full cost of each ticket, it follows that ticket revenues would have increased as well.

But it’s also worth noting that MoviePass’s well-publicized decline began in late summer, with disgruntled customers unsubscribing — and even so, October was a record-breaking month, with A Star Is Born and Venom leading the charge.

Early in the year, some critics had suggested that MoviePass would be bad for the industry because it would alter consumers’ expectations about ticket prices in ways that would adversely affect their moviegoing habits once the service’s business model inevitably proved unsustainable. But the converse may also be true: Perhaps using MoviePass helped cultivate customers’ enjoyment of going to the movies — still an inexpensive night out compared to seeing live theater, sports, or music — and that desire stuck around even after the service started limiting customers’ choices of which movies they could see.

MoviePass ticket sales didn’t account for all of 2018’s box office revenue, of course. But as we look toward the future, it will be interesting to see if more theaters move to subscription services like AMC’s Stubs A-List, which mimics MoviePass in many ways, to help bring a steady flow of moviegoers in the door.

Hollywood is playing it safe

Here are the top 20 films of 2018, ranked by domestic box office earnings:

Looking at this list reveals some interesting facts — and some obvious ones.

Movies based on comics rule the roost, with six of the top 20 films based on some Marvel or DC property: Black Panther, Avengers: Infinity War, Deadpool 2, Ant-Man and the Wasp, Venom, and Aquaman. That final entry is the only one that finished outside of the year’s top 10 films; it’s spent its first two weekends at the top of the box office and is sure to earn much more before it closes.

Jonny Cournoyer/Paramount Pictures

But if you widen the net, it’s clear that movies based on any existing property are the big earners. Technically, only one of 2018’s 20 highest-grossing films, A Quiet Place, is based on a wholly original idea. Every other film on the list is based on a comic or a best-selling novel (Crazy Rich Asians, The Meg), a remake of a previously successful film (Dr. Seuss’s The Grinch, A Star Is Born), or a sequel or “sidequel” to a previously successful film (Incredibles 2, Jurassic World: Fallen Kingdom, Mission: Impossible — Fallout, Solo: A Star Wars Story, Ralph Breaks the Internet, Hotel Transylvania 3, Halloween, Fantastic Beasts: The Crimes of Grindelwald). The lone outlier is Bohemian Rhapsody (no biopic about a famous and beloved figure is “original”), and that movie had a built-in audience in fans of Freddie Mercury and Queen.

That’s fairly predictable in an era when remakes, reboots, and sequels are king. But contrast 2018’s top earners, for instance, with the top earners of 1999, more than half of which were based on original ideas.

What emerges is a portrait of movie studios that are fundamentally risk-averse and may have, in 2018, figured out how to get people in the door: Promise them more of what you know they already love.

That’s not a surefire formula, nor is it an indictment of 2018’s top films in particular. Some of them, like Black Panther and Crazy Rich Asians, represented leaps forward for onscreen representation. Some, like Ralph Breaks the Internet, Halloween, and A Star Is Born, have been hailed as genuinely great films in their own right. And even the movies based on comic properties (which have long been side-eyed for a lack of originality by many critics and even some audiences) pulled in stronger-than-average reviews. If Hollywood is going to play it safe with source material, it’s great to see the resulting movies taking risks in creative and artistic ways.

But if it’s truly original storytelling you’re after, you’d better look elsewhere, to what the industry calls “specialty” box office (and much of which isn’t playing at the local multiplex outside major urban markets). Films like Eighth Grade, Sorry to Bother You, Suspiria, Can You Ever Forgive Me?, The Favourite, and Shoplifters performed very well in their opening weekends. And documentaries like Won’t You Be My Neighbor, RBG, Three Identical Strangers, and Free Solo raked in money as well, exceeding expectations for documentaries.

Not all of these films are based on wholly original ideas, and you might expect documentaries about Fred Rogers and Ruth Bader Ginsburg to do well in 2018, with interest in those figures running high. But it’s still clear that for Hollywood’s big studios, making a movie with a mostly black or mostly Asian and Asian-American cast is what counts as a gamble, and one that has paid off; if you want something more daring, you’ll have to look elsewhere.

Warner Bros.

Critics and audiences agree more than you might think

2018’s top films do offer one surprising insight, however. Common wisdom suggests that critics hate popular films, while “real people” choose which movies are actually good by going to them. By the same logic, if critics love a film, it’s not something “normal” audiences will enjoy. Surely, grim, snobby, fun-hating critics will hate any film the masses might love by default. Those movies are for fans, not critics, right?

That’s a narrative that has been occasionally weaponized by people who want to sell tickets to particularly bad movies; the marketing campaign for 2018’s big bomb Gotti (partly produced, coincidentally, by MoviePass), which tried to lure in audiences by suggesting critics “didn’t want them to see” the movie, provides the template.

20th Century Fox

But 2018’s box office data doesn’t seem to bear out the idea that critics and audiences are hopelessly out of sync. All but three of the year’s 20 highest-grossing films in North America scored above a 50 on Metacritic, which indicates at least a moderately positive critical reception from leading critics and publications. A quarter of them scored 80 or above. (I’m citing Metacritic rather than Rotten Tomatoes here because Metacritic’s data is more granular and focused on professional critics, while Rotten Tomatoes’ data tends to imitate a bell curve.)

The three movies that scored below 50 are Venom, The Meg, and Bohemian Rhapsody. I’d characterize the first two as “silly but pretty fun,” the sorts of movies that often appeal to audiences looking for some light entertainment. And Bohemian Rhapsody rode to box office glory partly thanks to many, many fans of Queen and Freddie Mercury, who delighted in seeing a film packed with the band’s songs and were less concerned with its quality.

A good critical score is likely to only improve the numbers for a movie that already had a built-in audience; not only will those fans buy tickets, but others who were on the fence about seeing it may also be persuaded.

But it’s clear that the narrative that fans and critics never agree just isn’t true — and that while some movies might be “critic-proof” (which is to say that people will see them no matter the critical consensus), making a good movie can translate to more ticket sales too.

“Peak movie season” is getting longer

The chart above underlines another point: The shape of the movie release calendar is changing.

Early summer and fall used to be “peak” movie seasons. Summer was for blockbusters; fall was for movies with Oscar hopes. January through April and the month of August were where studios dumped their bad movies or genre fare, like horror, that pulled in devoted audiences.

But as Vox’s Todd VanDerWerff pointed out earlier this year, the “summer movie season” has been steadily expanding for a while now. You can see that in the release dates for the year’s top-grossing films, which range from Black Panther in February and A Quiet Place in April to late releases like Ralph Breaks the Internet in November and Aquaman in December. The range of dates for big films keeps widening.

Marvel Studios

But as VanDerWerff also wrote, the real reason for this may have less to do with Hollywood changing its ideas regarding the release calendar and more — as I noted above — with risk-averse studios making more of the same kind of big-budget popcorn fare, and subsequently spreading it out across the calendar to avoid competing with other big-budget popcorn fare. That tactic pays off at the box office. But it might mean the movie business is getting more monolithic too.

Streaming may not be hurting the theatrical business as much as we think

You have to take this next statistic with a grain of salt, given that it came out of a study commissioned by the National Association of Theatre Owners, but it’s still interesting: Research conducted in 2018 found that people who go to movie theaters also consume more streaming movies at home.

The study, conducted by Ernst & Young’s Quantitative Economics and Statistics group and published in December, found that respondents who went to the movie theater nine times or more in the past year had also watched more films via streaming services like Netflix. As the number of movies they saw in a theater decreased, so did the number of streaming movies they watched. Those who hadn’t seen a movie in the theater at all were the least likely to have watched one at home.

This seems to fly in the face of a logical assumption: that services like Netflix, Hulu, and HBO Now, which allow potential moviegoers to stream movies at home rather than spend money on tickets and go to the theater to see them, would cut into the theater business.

Saeed Adyani/Netflix

That’s especially interesting at the close of a year in which Netflix aggressively tried to shake up the market, whether by releasing and relentlessly campaigning for awards-hopeful Roma or buying up movies like The Cloverfield Paradox and Bird Box from studios, then turning them into hits on its streaming service. Will moves like this eventually break the old studio business?

It’s too early to tell. But it’s worth stepping back and remembering two things about this data point. First, the study was commissioned by the National Association of Theatre Owners, the professional organization to which all the major exhibitors (including chains like AMC, Regal, and Cinemark) belong. They certainly have a vested interest in suggesting to filmmakers and distributors that the theater business is thriving, and that theatrical release shouldn’t be bypassed in favor of straight-to-streaming options.

And, of course, the data bears another interpretation: People who like movies watch more movies, whether it’s in a theater or at home. They might go to see a movie they’re interested in when it first comes out and watch a totally different movie at home. That’s hardly a shocking conclusion.

But it could also mean that people who are able to watch a wide variety of movies at home develop a taste for film and are more willing to go to the theater and try a movie that doesn’t center on their favorite character or franchise. And that’s good for business across the board.

A recession could still bring everything tumbling down

Even though 2018 was a great year for the movie business, it could prove to be a blip in a downturn, especially with a service like MoviePass no longer feeding a steady stream of subscribers into movie theaters.

And should the economy fall into a recession — something that some in Hollywood fear is imminent — the entertainment industry could take a hit, though cinema in particular has historically managed to keep going through economic downturns. (After all, Hollywood was birthed shortly before the Great Depression.)

Netflix

But a few factors, including the reliance of studio-owning parent companies like Disney on advertising dollars and high debt, could translate into problems for the industry if the economy tanks nationally or globally. There are some ways the theater business can help prop it up: Subscription-based services like Netflix allow consumers to translate their entertainment costs into predictable expenditures (and thus attract younger customers, who tend to prefer subscription models), and theaters are experimenting with new options for concessions that bring in revenue as well.

Still, the future of the industry is uncertain. Drawing a straight line from 2018’s boom year to 2019 and beyond is foolhardy. If Hollywood knew how to make a surefire hit, it would have figured it out by now. Tastes, consumer habits, technologies, and audiences keep changing.

But that’s show business, baby.

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