Lionsgate's "John Wick: Chapter 4" delivered a strong opening at the box office this past weekend, notching more than $73.5 million domestically and $64 million overseas to reach a new franchise record.
But analysts say it will still be difficult for the box office to recover to pre-pandemic levels this year given the impact of shortened theatrical windows and fewer low to mid-budget titles.
"Across the top 5 studios, 2022 global box office receipts were down 43% vs. the pre-pandemic baseline. While we are expecting 8% growth in 2023, this would still place the industry down 39% vs. pre-pandemic levels," Evercore ISI analyst Vijay Jayant wrote in a new note published on Sunday.
Back in 2014, the original "John Wick" opened to $14 million domestically while "John Wick: Chapter 2" secured a $30.4 million start in 2017. "John Wick: Chapter 3 – Parabellum" held the previous record for the franchise after securing a $56.8 million opening weekend in 2019.
It's an impressive showing to round out a strong month at the box office that saw films like MGM's "Creed III" and Paramount's "Scream VI" set fresh opening weekend milestones within their respective franchises.
Jayant said although average revenue per title is down about 20% to 30% on a normalized basis, it remains possible that metric could improve as "windowing policies change, consumer habits shift back to watching tentpole titles in theaters vs. on streaming, and China’s box office recovers."
"However, it is likely that fewer low and mid-budget theatrical titles is a structural change to the industry going forward," Jayant warned.
According to data from Comscore, domestic ticket sales totaled $7.5 billion in 2022, representing a roughly 70% year-over-year increase but still 30% below pre-pandemic levels when total North American ticket sales hit $11 billion.
Theater chains like AMC (AMC) recently implemented variable seat pricing to help boost box office returns. Not everyone has embraced this strategy, however, with IMAX (IMAX) CEO Richard Gelfond recently telling Yahoo Finance he's not a fan of the pricing scheme.
"I don't generally like it. It's saying one seat is better than the other seat...it's tough to enforce, and I don't think you make enough money to create the complexity," he said at the time.
Other industry watchers say elevated ticketing is a risky bet as inflation remains sticky and moviegoers are already experiencing higher prices.
Hollywood studios reevaluate box office strategies
Evercore's Jayant predicted Disney (DIS) will underperform pre-pandemic highs by the most this year, with theatrical receipts estimated to be down about 50% compared to 2019.
In Jayant's view, three factors explain the majority of the decline against pre-pandemic levels.
"[The] Fox studio has largely disappeared from the slate outside of The Avatar franchise," Jayant noted, "Pixar and Disney Animation titles have struggled at the box office, and Marvel has a tough comp vs. the pre-pandemic baseline. Disney has meaningful opportunity for improvement by leaning back into legacy windows."
He said Paramount (PARA) is the only major studio to operate above its pre-pandemic baseline in 2022 and 2023 due to its turnaround strategy of leaning on franchises, sequels, and existing IP, with the massive success of "Top Gun: Maverick" a standout for the studio.
Comcast's Universal Studios (CMCSA), meanwhile, has had "impressive overall execution" following profitable animated releases and a prioritization of the home entertainment window, the analyst said.
He added Warner Bros. Discovery (WBD) should see continued improvements amid its consolidation efforts and re-focusing of the DC Universe, although it's likely an evaluation of the studio's strategy will not be possible until 2025 given the lead time for movie production.
Alexandra is a Senior Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at firstname.lastname@example.org