NYC Reopening, Disney’s ‘Raya’ Breathe New Life Into Box Office

(Bloomberg) -- The struggling U.S. box office is expected to rebound this weekend, when theaters in New York City, the second-largest U.S. movie market, reopen after a yearlong hiatus.

Walt Disney Co.'s “Raya and the Last Dragon,” an animated film about a young warrior girl, is expected to take the No. 1 spot, generating about $12 million in ticket sales, according to an estimate from Boxoffice Pro. “Tom & Jerry,” from AT&T Inc.'s Warner Bros., is expected to come in second, with about $7.4 million. It could be the most popular moviegoing weekend since the Covid-19 pandemic took root in the U.S. a year ago.

Rising revenue, along with the return of about 250 theaters in New York, may give more studios confidence to release their bigger pictures sooner. While many analysts predicted box-office figures would remain muted until at least June, the recovery appears to be happening faster. Some big-budget films, including “A Quiet Place Part II,” from ViacomCBS Inc.'s Paramount Pictures, have moved their premiere dates forward to take advantage of the improving economics.

“As the second-biggest movie market in the U.S., I think New York reopening is a really important step on this road to recovery,” said Paul Dergarabedian, a senior media analyst at analytics firm Comscore Inc. “I think that will embolden studios. We may have a summer movie season after all.”

At the start of the year, circumstances were far different. About two-thirds of U.S. theaters were closed, those that were open had strict capacity limits, and release dates for major films, such as Metro-Goldwyn-Mayer Inc.'s James Bond installment “No Time to Die,” were delayed until nearly the end of 2021. Some theaters buckled under the strain of a year with limited revenue. Alamo Drafthouse Cinemas Holdings, the popular chain known for its craft beer, filed for Chapter 11 bankruptcy protection on March 3.

Getting Out

However, coronavirus case numbers have started to slide and more people are getting out the house. Last week, though Warner's “Tom & Jerry” was available to audiences on the streaming platform HBO Max, fans still poured into theaters. The movie generated $13.7 million in ticket sales, the second-best showing for a new theatrical release in a year.

The addition of New York theaters will provide another boost. Though auditoriums will be limited to 25% of capacity, the city is key for film studios. The U.S. is the largest moviegoing market in the world, and New York makes up about 7.5% of the total, just behind still-closed Los Angeles, according to Comscore data. This weekend, about 45% of U.S. theaters should be open, Dergarabedian estimated.

It will still take a long time for the industry to recover, after ticket sales plummeted about 80% last year. And some studios are still wary about putting out big pictures right away. Comcast Corp.'s Universal Pictures pushed back its next major blockbuster, “F9,” from May to June, two months after Chairman Donna Langley said to expect more film delays. Still, cinema reopenings represent an improvement.

In a nod to pandemic times, “Raya and the Last Dragon” will also be available on the Disney+ streaming platform for $30. At least one major chain, Cinemark Holdings Inc., said it won't show the film. Disputes over when and how theatrical releases can be made available on streaming platforms have been ongoing for at least a year.

That won't hold the movie back from reaching No. 1, according to Boxoffice Pro. Disney Chief Executive Officer Bob Chapek said at a conference this week that theaters need to get used to movies being released in different ways, since customers have grown accustomed to having more viewing options at their disposable.

“People have more choices now than ever,” Dergarabedian said. “But we've seen movies that are available on the small screen and big screen, and some people are still choosing to go to the theater. The theater isn't going away.”

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