Australia’s gross box office revenue of $941m in 2022 was 23pc lower than pre-pandemic levels

Blockbusters and more ‘premium experiences’ on offer has put Australian cinemas on track to crack $1bn in box office revenue. So what are the top movies to look out for?

Chris Herde

@ChrisHerde

4 min read

January 15, 2023 - 10:46PM

The Australian Business Network

Avatar: The Way of Water has taken the Australian box office by storm.

QLD News

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Adapting to the lingering impact of the Covid-19 and a previous scarcity of blockbuster movies, cinemas operators are tackling streaming services by offering “experiences’’ to get people off the couch.

According to the Motion Picture Distributors Association, the Australian gross box office was $941m in 2022, which was 55 per cent above 2021’s figure of $605m and up 135 per cent from the $401m it generated in 2020 during the height of the pandemic’s lockdown.

However, last year’s box office was just over 23 per cent lower than revenues of $1.28bn in 2019, before the Covid-19 pandemic.

Majestic Cinemas chief executive Kieren Dell, a former president of the Independent Cinema Association, said he expected the box office to improve in 2023 with a wave of new blockbusters and the end of health restrictions.

“In general, pundits are saying we won’t get back to the pre-Covid figure in 2023 and might be 10 to 15 per cent off,” he said.

“But I think from the middle of the year we could outperform 2019 and the general consensus is that we will get back to pre-Covid normality in 2024.”

Mr Dell said 2022 was an uneven year with states going into lockdown at different times. The pandemic caused delays in receiving new content and movie production ground to a halt, creating a blockbuster movie black hole for part of the year.

Cinema goers are heading back to the movies.

The top films in 2022 grossed a very similar amount to the biggest in 2019. While Spider-Man: No Way Home spilt over from a December run into January, lockdowns stopped the sector in its tracks until Elvis ($33.5m), Thor: Love and Thunder ($44.3m), Jurassic World Dominion ($35.8m) and Top Gun Maverick (92.7m) pushed the box office higher.

However, a lack of big movies resulted in only three major films being released in the second half of the year – Bullet Train, Black Adam, and Black Panther: Wakanda Forever — which performed to varying degrees of success, until Avatar: The Way of Water became the second highest grossing film of 2022 in its first two weeks.

Tom Cruise in Top Gun: Maverick.

Mr Dell said the “billion dollar question” was how to entice people from streaming services and into cinemas.

“It comes back to content. People are not going to see B-grade movies. They think ‘I don’t need to see that. I don’t need to get my good pants on and get off the couch’,” he said.

“The other thing to get them off the coach is the experience – reclining seats, food and beverage, and a premium format like IMAX. People want the premium experience and we’re finding that they’re prepared to pay for it.”

National Association of Cinema Operators executive director Cameron Mitchell said there were many positives from 2022 despite a reduced number of blockbuster movies on offer and there was much to look forward to in 2023.

“A strong theatrical line-up has again (given hope) that records will be broken as cinemagoers flock back to cinemas to immerse themselves in great content, and we are expecting more growth in 2023 given the strength of the line-up,” he said.

“The line-up for 2023 is exceptional. We are seeing a very strong start thanks to Avatar and all studios have slated an incredible line-up given production facilities are normalising and guests are returning to cinema en masse.”

But, Mr Michell said, there was a “definite trend globally towards experiences over products”.

Avatar: The Way of Water became the second highest grossing film of 2022 in just its first two weeks of release.

He said there has been a massive investment by cinema chains in upgraded foyers and bars, bigger screens, brighter projection, enhanced sound, and comfortable seats. There are also targeted loyalty programs that reward frequent visitation with discounts.

“You can’t match the experience of cinema at home, irrespective of the size of your TV and how loud your sound system is,” Mr Mitchell said.

“There was experimentation during Covid surrounding the exclusive window that movies enjoy in cinema, and it has now been universally agreed that an exclusive window benefits the movie’s performance … which equates to more movies.

“Streaming ultimately reminds older generations, and teaches new generations to love movies, so while there is friendly competition, we are all telling a story – albeit ours can be seen in a superior environment that satisfies our love of the social experience.”

A recent Queensland University of Technology study – in which 10,000 Palace cinemas patrons were surveyed – concluded that a trip to the movies was still on most people’s to-do list.

QUT Digital Media Research Centre chief investigator Tess Van Hemert said that going to a cinema has always been about more than just watching a film.

“Some of our strongest memories may be linked to the cinema. The first film we saw as a child, our friends or on a special date. The value of cinema is tied to the collective experience, and understanding this experience is at the heart of our research,” she said.

Dr Van Hemert said the data revealed that on a scale of one to 10, audiences rate a definitive nine in agreement to the statement: “I usually pay more attention to what I’m watching in the cinema”.

“As the number of screens in our home expands, and we pay more attention to the mobile devices that may easily interrupt our home viewing, cinema is increasingly appreciated as a site of focused attention where audiences can give themselves over to sustained, immersive storytelling,” Dr Van Hemert added.