Following our last piece exploring the relationship between box office numbers and the post-Covid re-opening and return to normality, we offer an update. With the Euros just gone, the NBA finals in their closing stages, could now be the time for cinemas to recoup their pandemic losses? In recent weeks, cinemas hosted big releases, notably F9: The Fast Saga and Black Widow. Were they enough to draw people back?
In our 8 June report, box office data suggested people had toyed with the idea of returning. Some had committed. But back then, it was hard to draw a strong conclusion muddied by the conversion to streaming services such as Netflix, Amazon Prime, and Disney Plus over the pandemic.
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Following our last piece exploring the relationship between box office numbers and the post-Covid re-opening and return to normality, we offer an update. With the Euros just gone, the NBA finals in their closing stages, could now be the time for cinemas to recoup their pandemic losses? In recent weeks, cinemas hosted big releases, notably F9: The Fast Saga and Black Widow. Were they enough to draw people back?
In our 8 June report, box office data suggested people had toyed with the idea of returning. Some had committed. But back then, it was hard to draw a strong conclusion muddied by the conversion to streaming services such as Netflix, Amazon Prime, and Disney Plus over the pandemic.
Five weeks on, we now have a full two-month period over which to compare box office figures. In the US, grosses are still 44% behind an equivalent 8-week period in 2019 (Chart 1). However, this difference falls to just -19% if we look back over the last three week. This is a big improvement on our last report – which showed a -67% shortfall – and suggests US movie fanatics are returning to the big screen.
A similar comparison reveals Germany still down 76% on 2019 figures (Chart 2). Although, this is also heading in the right direction, with the gap -42% over the last 3 weeks instead of -99% previously. Impressively, box office grosses in France are down just 12%, and over the last 3 weeks are actually 1% ahead of 2019 figures compared with -50% in our previous report (Chart 3).
Progress in the UK has been somewhat slower. In June, box office numbers were 48% behind 2019, which has only improved by 10pp to 38%. The joint hosting of Euro 2020 could explain part of this relatively sluggish improvement. Since indoor screenings were permitted in the UK, cinemas have grossed just over $80mn, less than half of the $170mn in 2019 over the same period (Chart 4). Only Germany is further behind.
Our main argument against using box office statistics to measure re-opening is the large switch to on-demand services such as Netflix, Amazon Prime, and Disney Plus during the pandemic. However, the US, which hosts these services, saw a strong resurgence in box office statistics nonetheless. In fact, across the board key numbers are heading in the right direction and with big movies like Space Jam 2 and Suicide Squad to come, we could see the US, UK and Germany return to 2019 levels.
Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.
Ben Ford is a macro research analyst at Macro Hive, and is currently finishing an MSc in Finance at Cass Business School.