Better Movies and Risky Bets: How 2018 Box Office Hit a Record

Cinema_Loop_Illo - THR - H 2019
Illustration by: Mattias Adolfsson

As the domestic market grows to $11.9 billion on the back of superhero tentpoles (not just from Marvel), watercooler hits (and MoviePass?) are bringing audiences back to theaters — and this year could be bigger with "Disney and then everyone else."

One year ago, Eric Handler was among the many Wall Street analysts who thought that the North American box office — at best — would match the record $11.4 billion collected in 2016. But, as one studio movie after another overperformed and transformed into a watercooler sensation, he and others were surprised to see that domestic box office hit an all-time high of $11.9 billion in 2018. Moviegoing begets moviegoing, and there is nothing like word of mouth.

"The lineup looked broad and deep, and while I told investors we remained positive, we certainly didn't have domestic revenue up 7 percent over 2017," says Handler. "We've never seen a year when three movies grossed more than $600 million domestically."

The boom in the U.S. propelled worldwide box office revenue to a record $41.7 billion. Foreign revenue reached $29.8 billion, a gain of only 1 percent. Hollywood executives, under pressure from consolidation and facing competition from streaming services, aren't being trite when they say they delivered better movies in 2018 — even if some of those hits, such as Sony's Venom, had poor scores on Rotten Tomatoes.

"Our industry as a whole did a terrific job of delivering a diverse slate of films with a fresh take," says Sony domestic distribution chief Adrian Smith. Adds Jeff Goldstein, Smith's counterpart at Warner Bros., which made a rousing comeback, "There were just better movies, and bold chances taken."

Attendance also rebounded, and was up 4 percent to 5 percent over a dismal 2017 (a final figure for 2018 will be released later in January). Hollywood broadened its reach by releasing a number of films appealing to an ethnically diverse audience, such as Black Panther and Crazy Rich Asians.

And while maverick movie subscription service MoviePass may have crashed and burned, it changed consumer habits and prompted major circuits AMC Theatres and Cinemark to launch their own bundled pricing plans that drive traffic to the multiplex and art house. (AMC's service now touts 600,000 members.)

Big tentpoles certainly dominated — including superhero pics, which took up six of the top 10 slots on the worldwide chart, an unprecedented showing — but midrange and smaller films, including Peter Rabbit ($351.3 million), A Quiet Place ($340.7 million), Crazy Rich Asians ($238 million) and Bohemian Rhapsody ($703.8 million), prospered at the worldwide box office, enjoying huge multiples.

"There was a $100 million-plus movie domestically in almost every single month," says 20th Century Fox film distribution chief Chris Aronson, whose studio, which is about to be absorbed by Disney, released Bohemian Rhapsody. "It points to the power of the communal moviegoing experience."

There also were major casualties. Lucasfilm and Disney suffered a blow to the brand and the bottom line when Solo: A Star Wars Story topped out at $392.9 million globally. A Wrinkle in Time, which lost north of $100 million, also bet big and crapped out. "We never take anything for granted. We’ve been around long enough to know
there are movies that work, and there are movies that don’t work. Even this year, not everything resonated," admits Disney distribution chief Cathleen Taff.

The Disney empire can certainly withstand the dings. Its films took three of the top five spots on the worldwide chart, led by Avengers: Infinity War ($2.04 billion) and Black Panther ($1.35 billion). The studio commanded 17 percent of global market share, including 26 percent in North America.

"In 2019, it will be Disney and then everyone else," predicts BTIG analyst Rich Greenfield. "People love great content and will still get off the couch to go to the theater, but attendance is being driven by fewer and fewer movies."


Biggest Box Office Losses of 2018

A Wrinkle in Time Ava DuVernay’s adaptation of the children’s book topped out at less than $130 million globally. Disney spent north of $125 million to make the film before a hefty marketing spend. Analysts say the movie lost $100 million or more. 

? Mortal Engines The Peter Jackson-produced event pic may be the biggest bomb of the year, grossing just $63 million worldwide to date and likely to lose $125 millionplus for Universal and MRC, say multiple sources. (MRC is owned by Valence Media, THR’s parent company).

? Robin Hood The reboot, starring Taron Egerton and Jamie Foxx, is expected to lose about $100 million after earning less than $75 million globally. The pic capped a tough year for Lionsgate, which saw its domestic share slide from 8 percent in 2017 to 3.4 percent in 2018, when revenue topped out at $389 million.

Honorable Mentions The Christmas season brought two massive lumps of coal: Sony’s Holmes & Watson, starring Will Ferrell and John C. Reilly, and Universal and DreamWorks’ Welcome to Marwen, which will lose at least $50 million, say sources. Holmes & Watson is likely to lose at least $20 million. Earlier in the year, Solo: A Star Wars Story racked up notable losses for Disney, which also stumbled at Thanksgiving with The Nutcracker and the Four Realms. Then again, if there’s any studio that can take some lumps, it’s the Mouse House.


Specialty Report: Docs Delight, Features Struggle

The late Fred Rogers would be proud of the booming box office neighborhood populated by documentaries in 2018. Won’t You Be My Neighbor?, chronicling the life and career of the gentle, open-minded kids TV host, quickly became the No. 6 doc of all time, excluding nature and concert pics. It wasn’t the only summer surprise: Ruth Bader Ginbsburg film RBG, opening a month earlier in May, also landed on the top 10 list of best-performing docs. They were followed by Three Identical Strangers and Free Solo. However, one doc voted off the marquee was Michael Moore’s Trump-era treatise, Fahrenheit 11/9.

On the narrative feature side, it was a challenging year. The hope now is that indie films opening over the Christmas holiday will be buoyed by the final stretch of the awards race. “People feel like 2018 ended on a sour note because the year before was so strong with The Shape of Water, Three Billboards Outside Ebbing, Missouri and Lady Bird. You aren’t seeing those same sexy numbers this time,” says Lisa Bunnell, distribution chief at Focus Features, home of the Fred Rogers doc and BlacKkKlansman. “But I’m confident the indie industry will continue to grow. The streaming services actually increase the talent pool.”

This story appears in the Jan. 4 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.