After COVID lockdowns, the true test of a country’s re-opening is how willing movie-lovers are to return to the cinema. After all, would you sit in a dark room packed with strangers if you were panicked about the pandemic? So, the movie box office could provide a useful barometer of economic normalcy. And in recent weeks, cinemas have re-opened in most countries with some big releases, notably the sequel to the wildly successful The Quiet Place, inventively called The Quiet Place 2, and Disney’s Cruella.
Box office data shows people are returning to the cinema – at least compared with the same period last year when attendance was tiny or cinemas were closed. A better comparison would be with the pre-pandemic 2019. On that score, recent box office numbers are unimpressive. In the US, box office grosses for the last three weeks are 67% lower than the same period in 2019. They are 48% lower in the UK, 50% in France, and a staggering 99% lower in Germany (Charts 1 to 4).
Therefore, we are far from normalcy. Some of the low numbers could be a supply issue – that is, studios not releasing their heavy hitters. In the same period in 2019, we had Disney’s Aladdin with Will Smith, Godzilla: King of the Monsters and The Secret Life of Pets 2. The current crop of movies is less attractive, but not by much. So, while there could be a supply issue, the larger issue is likely a combination of cinemas being unable to offer as many seats as before due to social distancing and the public remaining cautious about attending.
The deeper question is whether people prefer to watch movies at home, which would indicate an enduring change from the pandemic. At this stage, it is too early to call. The real test will be the box office grosses of the three Marvel movies due for release in 2021: Black Widow (9 July), Shang-Chi and the Legend of the Ten Rings (3 September) and Eternals (5 November). Watch this space.
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.
Suleiman Javid is a Research Intern at Macro Hive. He is currently studying Economics BSc at Exeter University and is passionate about economics and politics.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)