Opinion:

We’re six months into 2023, and Hollywood is in trouble. While the ever-growing pressure from the Writers Guild of America strike shows no signs of ending, studio executives hoped to find relief in their signature summer box-office profit earnings. Going into July 2023, that hope has all but evaporated. Hollywood studios have a spending problem, but unlike previous summers, the tentpole releases are failing in larger numbers than ever before.

Between May 5, 2023, to June 23, 2023, there were six major Hollywood releases (Guardians of the Galaxy Vol. 3, Fast X, The Little Mermaid, Transformers: Rise of the Beasts, The Flash, and Elemental) with budgets of $200+ million. Of these six, only Guardians of the Galaxy: Vol. 3 was a box-office success; the others fell far below studio expectations. While studio executives are reeling at their financial disappointments, it does not take a financial expert to figure out why the summer box-office is flat-lining. Ever-ballooning production budgets, further spending on advertisements, troubling headlines, streaming, and audience fatigue all explain why audiences are not going to the theaters as much as they used to.

Universal Studios and Paramount Pictures have a spending problem. Fast X and Transformers: Rise of the Beasts are clear-cut examples of movies that were destined to struggle to regain their production cost due to how high their budgets are. The rule of thumb is a movie must earn double its production budget to break even financially. The previous Transformers installment, Bumblebee, saw the lowest earnings of the franchise, despite having by far the lowest budget at around $130 million. Despite this, Universal still spent $200 million on the seventh live-action installment, and the film since its release has grossed $341 million worldwide, far below its predecessors. If spending $200 million on Transformers was ill-advised, then spending $350 million on Fast X should be viewed as studio malpractice. Following a troubled production that saw its signature director Justin Lin’s exit and continuing rumors of Vin Diesel’s difficulty on set, the 11^th installment within the franchise stands at $696 million, the lowest gross in the series since 2011’s Fast Five.

Disney made headlines in early June when its latest Pixar outing Elemental grossed $29.6 million on its opening weekend – an all-time low for the studio. This, along with the financial failures of Strange Worlds and Lightyear, suggests Disney animations struggle to get families back in the theater following the pandemic. Disney’s rush into streaming post-pandemic may prove costly as its animated projects continue to wither. Why pay nearly $20 a ticket to take your kids to see a movie in theaters, when they can just wait to see it on Disney+ a few weeks later?

In terms of its live-action outings, Disney may find solace in the domestic earnings for The Little Mermaid (2023), which as of June 25, 2023, has grossed $270 million domestically. While this number is undoubtedly impressive, it has struggled to find an audience outside of the U.S., only grossing $217 million. With a production budget of $250 million, The Little Mermaid may break even by the end of its run; however, it will not gross anywhere near a billion dollars like Disney’s pre-pandemic live-action adaptations of Aladdin, The Lion King, and Beauty and the Beast. Even its biggest success of the year, Guardians of the Galaxy Vol. 3, which earned rave reviews from both critics and audiences and proved to be a major box-office success, still earned less than both of its predecessors, suggesting that superhero fatigue may be real.

Yet, the biggest loser of summer 2023 appears to be Warner Brothers Studios, whose CEO is David Zaslav.  A figure in the ongoing writers’ strike, Zaslav has been subject to ridicule. In the span of one month, he got booed while delivering a commencement speech at Boston University; fired his appointed chief executive and chairman of CNN, Chris Licht; and caused great concern due to the handling of layoffs at Turner Classic Movies. As if the summer could not get any worse for Warner Bros., The Flash proved all expectations wrong.

Hailed “one of the greatest superhero movies ever made” by Zaslav, new DC film head James Gunn, and Tom Cruise, The Flash’s debut was nothing short of a disaster for Warner Bros. The film, which has long been in development hell for the past decade, has spent the past few years under intense media scrutiny due to the trouble allegations of its star performer Ezra Miller. Warner Bros. found itself in the difficult situation of having to market its $220-plus-million movie while hiding its star performer. Despite early positive buzz out of CinemaCon and the promise of Michael Keaton’s return as Batman, The Flash fell far below expectations both critically and commercially, grossing only $55 million domestically during its opening weekend.

The financial failure of The Flash along with Shazam: Fury of the Gods and Black Adam flopping is proof of trouble for DC films. Since the inception of the DCEU in 2013, seven of its 13 releases have been financial disappointments, with eight of the 13 receiving mixed to negative reviews from critics. Plagued with bad scripts, constant studio interference, and unimpressive CGI effects, audiences began to expect mediocrity – thus any goodwill built from successes like Wonder Woman and Aquaman were squandered.

Some movies just beyond the horizon may be able to moderately salvage the wreck that has been the early part of the summer box-office. Films like Mission: Impossible – Dead Reckoning Part 1, Oppenheimer, and Barbie still have the potential to be massive hits for Hollywood. Yet, that does not change the fact that Hollywood studios find themselves in a predicament. With the rise of streaming services and 85-inch TVs with surround sound, the need for theaters is slowly being eradicated.

Yet, last year’s summer box-office smash hits like Top Gun: Maverick and Elvis showed that audiences will flock to the theater for big studio summer releases. These movies were well-reviewed by critics and audiences, featured great performances, and most importantly style and substance from incredible visionaries. Hollywood must understand that audiences want to see a movie in theaters, but with rising ticket prices, they will be far more selective than ever before, and may no longer settle for mediocrity.

Hollywood has never looked weaker. The 2023 summer movie season may well serve as an influx point for the history of the film industry. If studios continue with their outrageous spending habits, mistreating their writers, and overworking their below-the-lines crew, then this summer may be the first sign of worse to come.

Author Bio:

This is an opinion piece by Ben Friedman, who is a freelance film journalist and a contributing writer at Highbrow Magazine. For more of his reviews, visit bentothemovies.com, his podcast Ben and Bran See a Movie, or follow him on Instagram, Twitter, and YouTube: The Beniverse

For Highbrow Magazine