2023 market prediction: Mario and major new announcements push market prediction above $10 billion for the year

May 4, 2023

Super Mario Bros. Movie

The absolutely spectacular performance of The Super Mario Bros. Movie at the box office, plus new announcements from Apple, among others, gives our 2023 market prediction a substantial power-up this month. Our overall market prediction currently stands at slightly over $10 billion, up a massive $800 million from last month.

Subscribe to our Bankability and Box Office report for full details, or read on for an overview of what our model thinks of the next 12 months in movie theaters…

Here’s how 2023 looks compared to the last four years. The bars in the chart estimate the total box office for all films released in a particular month from 2019 to the end of 2023.




The model thinks that Mario will be the highest-grossing film of the year, ending with close to $600 million at the domestic box office. That’s far ahead of where the model thought it would land before it came out, and its incredible feat of beating our pre-release projection by over $350 million accounts for almost half of the increase in our market prediction.

Another $100 million comes from two films that were originally destined for Apple TV+ and will now have exclusive theatrical runs: Ridley Scott’s Napoleon, starring Joaquin Phoenix and Vanessa Kirby; and Martin Scorsese’s Killers of the Flower Moon, starring Leonardo DiCaprio and Robert De Niro.

Ten years ago, the thought that films like that wouldn’t get extensive marketing around major theatrical releases would be ridiculous. Two years ago, their only home would be on a streaming platform. So it’s hard to overstate how important their release is to the theatrical business. Between them, the model thinks they will generate about 1% of total box office earnings this year. With the distributing studios (Sony Pictures for Napoleon and Paramount Pictures for Killers of the Flower Moon) likely to earn a decent profit on each one, and Apple benefiting from what will likely be major Oscar contenders showing up on their streaming platform ahead of Awards Season, this is a win-win-win for the industry. Amazon has already taken note, and I’d be surprised if Netflix doesn’t follow suit with wide theatrical runs (and reported box office, please!) in the next 12 months, at least for their more prestigious titles.

The good news for the theatrical business doesn’t end there. All told, there are now 125 films announced for wide release in 2023, compared with 107 as of the beginning of April. If, as a rule of thumb, you expect a wide release to make $20 million on average, then adding 18 new wide releases will boost the expected box office for the year by $360 million. If you’re keeping track, a $350 million over-performance by Mario, $100 million from Apple's releases, and $320 million from the 16 other newly-announced wide releases adds up to a $770 million boost to the market prediction.

There are huge variations of course, and there are plenty of newly-announced titles that the model doesn’t think will make much of a ripple, but the likes of Anyone But You, Five Nights at Freddy’s, and Thanksgiving will help sustain the box office recovery.

Here’s a summary of the films making the biggest impact on the overall prediction this month:


Lurking within all this upbeat news, I should mention a couple of words of caution.

First, and perhaps most importantly, the model doesn’t adjust its predictions based on how much competition each movie has when it opens. That hasn’t been a problem over the past couple of years because so few films have been released. I think that will become an issue this year. In fact, I think it already has, with films like A Thousand and One, A Good Person and Chevalier struggling to get much attention in the past month.

One way to think of this is that the box office tally for the year needs to increase by 33% from last year if we’re going to hit $10 billion. About 5% of that increase will come from increased ticket prices. We will have around 27% more wide releases this year. So if each film sells the same number of tickets on average, we’ll basically hit the target (give or take a few million dollars here or there). But if two similar films open on a given weekend, many people will pick one of them to watch rather than going to both, which will harm the average ticket sales per movie.

That other dimension—the total number of people going to the movies, and how many films they will watch on average—will ultimately determine whether we hit $10 billion this year. My hunch is that we’re getting close to saturation point, and it’ll only take a slight underperformance from a couple of films to miss that number.

I would argue that the “saturation point” is showing up in our measure of overall market strength.




The trend-line is still looking positive, but the sheer number of films coming out at the moment means the estimate is jumping around quite a bit. That’s partly because the market strength estimate weights all wide releases equally—the over-performance of Mario is balanced by the under-performance of Chevalier, for example. I still think that’s the right thing to do from a modeling perspective, but I’ll continue to monitor the situation.

On the flip side, two films are really standing out as the breakout favorites through the rest of the year:




Barbie and Wonka both got marketing pushes at CinemaCon last week, and are the buzziest movies coming up this year according to the model. Our full report (click here to purchase) has full details on the top ten potential breakout hits through the end of the year. It also has our early predictions for films coming out in January and February, 2024.

Methodology

Our market prediction is based on the same model as the weekend predictions that we’ve been running since theaters started reopening towards the end of 2020. We are now running the prediction model for every announced wide release on the release schedule and estimating the size of the market as a whole by assuming a relatively small amount of additional revenue from limited releases. The prediction for each movie is based on six factors:

The performance of similar films in recent years, and cast and crew Bankability. So far as possible, the model uses films in the same genre released by the same distributor as points of comparison. The predicted performance of franchise films is based on previous releases in the franchise. Cast and crew Bankability is weighted more heavily for non-franchise than for franchise films.

The current state of the theatrical market. We update our model after each weekend with a wide release to estimate what proportion of formerly-regular moviegoers are currently going to theaters.

Adjustments for specific genres. The pandemic has affected different segments of the audience in different ways. We are currently adjusting movies with romantic content down by 20%, but not adjusting any other genres.

Adjustments for day-and-date streaming releases. This was taken into account when films were being simultaneously released on HBO Max and in theaters on the same day. Since that’s no longer happening, and we haven’t seen a measurable impact from films being released simultaneously on Peacock and Paramount+, no adjustment is currently being made. We are continuing to monitor this aspect of the industry.

Potential breakout hits. Films that have the potential to break out beyond what the model otherwise predicts are identified and their predictions increased accordingly. These films are currently selected based on our measurement of audience interest.

The expected recovery of the theatrical market as the pandemic is brought under control. The model assumes that the market will settle back to 90% of its pre-pandemic size at the end of the recovery. Growth was slow at first, accelerated as more people become confident in going to theaters, and then will slow down as more cautious moviegoers take time to return to attending. This is the classic ''S-shaped'' curve seen in economics textbooks (and in many cases in the real world). (For more on this see my previous article, How quickly can the box office recover?) Those parameters are likely to be adjusted as the market situation evolves.

- Current release schedule
- Recent release schedule changes
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Bruce Nash,

Filed under: Robert De Niro, Leonardo DiCaprio, Joaquin Phoenix, Martin Scorsese, Ridley Scott, Vanessa Kirby