The Fall Guy and theaters’ dim future

The Fall Guy is a throwback, the rare high budget summer movie based on a quasi-original story, leaning on two likable stars to carry a PG-13 mixture of action, comedy, and romance. Helmed by a director who’s proven himself at the box office, it’s about as appealing a draw as you’re going to get that’s not based on four-quadrant-friendly IP.

But The Fall Guy is a flop. The movie made $28 million opening weekend and $110 million worldwide gross after its first two weeks, the slowest start to the summer movie season in fifteen years. With a reported $130 million budget, it’s a likely loss on Universal’s balance sheets.

Cue extensive online discourse regarding The Fall Guy’s stumbles: Ryan Gosling can’t open a movie. Universal should have released the movie in the spring with less competition. The budget was excessive. But the path to success for The Fall Guy, like most movies, was already narrow; for the last decade, the theatrical experience has gotten worse while home viewing has gotten better, and the studios have trained an audience that mega event franchise IP are the only movies worth leaving home for.

Consider the minefield an average moviegoer wades through for a movie night out. In my post on the subject a few years ago, I cited poor theatrical experiences, with a distracting audience, declining screen quality, rundown lobbies, endless advertisements, and skyrocketing ticket prices.

Compare that theatergoing experience to watching movies elsewhere: the sheer selection of options available, affordability, and convenience to watch in a way that suits you (4K Blu-rays to subscription streaming, OLED TVs to tablets and smartphones) is only improving. Movie night at home has its flaws – streaming sites gatekeep picture quality, and recommendation algorithms are poor. Still, it’s trending in the right direction if you know what you want to watch.

Hollywood studios have also commoditized their release strategy as the quality of home versus theater watching moves in opposite directions. For over a decade, the big five studios have almost exclusively prioritized franchise-ready IP for theatrical budgets, marketing, and screen distribution. We’ve also seen the theatrical window – the time a movie stays exclusively in theaters before availability on other formats (PVOD, streaming, Blu-ray) – shrink dramatically. Years ago, the traditional window ran roughly 90 days, but today studios have slashed that average to 37. Some hit VOD even faster; this summer’s Challengers and The Fall Guy appeared on paid streaming in under three weeks from their theatrical debut.

We’ve also seen the rise of more studio-owned and affiliated streaming services like Disney Plus and Paramount Plus. As long as you’re patient, almost every movie in theaters will eventually appear on its studio streaming site of choice, often within a few months. Dune Part Two opened in theaters this March, and by May, being a Warner movie, it was on Max. Likewise, The Fall Guy, as a Universal production, will inevitably be on Peacock sometime this fall.

So, under the backdrop of this shifting movie watching landscape, consider what the average moviegoer factors in when considering a movie theater night with The Fall Guy. For the last decade, Disney, Warner, and other studios have trained everyone that supersized franchise IP “event” movies are the only product worth heading to the movies for. The Fall Guy may have explosions and recognizable faces, but it doesn’t match an obvious event template. The moviegoer’s local theater has had dim screens ever since the 3D movies were hot years ago, over forty minutes of ads and trailers before a feature, audience members who happily tap away at their bright phone screens mid-movie, and it costs $16 for a night screening. To head out as a family – partner, two kids, parking, concessions – prices can blow past $80. Casual browsing at home revealed two other recent Hollywood action vehicles hit PVOD a few weeks after their theatrical debut. Another debuted on Netflix in under three months.

Under such conditions, it shouldn’t surprise anyone that many chose to stay home and wait for The Fall Guy on streaming. And this challenging theater landscape isn’t just for a high budget original, but practically any movie. Even what were generally assumed to be sure bets – The Marvels, Mission Impossible: Dead Reckoning, Fast X – underperformed. Year to date theater gross is down 22% from last year, and the summer to date has fallen in line. By almost any objective measure, theaters are in trouble.

Inevitably, we’ll see Hollywood execs paper over a long term, existential theatrical crisis with excuses and highlights elsewhere. I’ve seen a fair amount of finger pointing to the strikes forcing a temporarily weaker than usual slate of 2024 releases. Also, early signs suggest Deadpool & Wolverine and Inside Out 2 will be the kind of mega hits everyone in the business is craving.

But this once a year box office “event savior” – Top Gun: Maverick in 2022, Barbenheimer in 2023 – is the kind of lucky strike that is far from guaranteed. And even with those singular hits, the total yearly box office from 2022 onward still can’t reach the highs of over two decades ago: 2023 saw a total gross of $8.9 billion, 2003 about $9.2 billion. Adjusting for inflation, the domestic total gross is down about 70 percent from the early 2000s.

Realistically, I expect we’re too far along to reverse trends. I imagine an eventual constriction in the theater market to match dwindling demand. Some theaters will close or shrink in size. Limited markets will remain, optimized around movie nights feeling extra special and semi-rare, like going to a play or the opera. But I don’t know how big Hollywood will adapt in such a constricted future. The biggest movies traditionally rely on the global theater box office to justify costs. I question if a bigger percentage of the audience on premium VOD can close any pullback from theaters.

In this transitional moviegoing landscape, predicting what happens next is hard. The mid-budget original movie may make a roaring comeback to diversify risk. Or maybe Disney et al shift their entertainment bets away from big movies entirely, showing up once or twice a year for that Inside Out sequel and otherwise stay away, reinvesting that blockbuster movie money into gaming, live sports, and other areas. Still, despite rapid change, I’m confident there will still be a vibrant, incredible slate of new movies to watch. I’m just prepared that the ways and means of how I watch them will likely shift significantly over the next few years.