How ‘Avatar: The Way of Water’ can help give theaters a lift

How big is the pressure on Avatar: The Way of Water to hit the box office when it hits theaters this weekend?

Think what James Cameron’s submarine endured while exploring the Mariana Trench in 2012. In other words, a lot.

For the Oscar-winning actor, the new film, which hits theaters on Thursday, is the culmination of five years of production – much of it underwater – and special effects that come 13 years after the first “Avatar,” which set a new standard for set blockbusters. For the Walt Disney Co., it’s a revival of what the Burbank-based entertainment titan hopes for in a long-lasting blockbuster franchise.

And for cinema owners a much-needed thirst quencher after a severe dry spell in ticket sales.

A tenuous release slate has hampered the box office recovery after high hopes earlier this year.

The last big hit with audiences was Black Panther: Wakanda Forever, which was released over a month ago and has grossed $770 million worldwide. With few popular new releases and a string of high-profile flops (Disney’s Strange World, Universal Pictures’ She Said), the box office has slipped in recent weeks. Last weekend, the total for all films in the US and Canada grossed a dismal $38 million in three days, almost a low for the year.

“A lot depends on it,” said Brock Bagby, chief content, programming and development officer of B&B Theaters in Liberty, Mo., the fifth largest cinema complex in the US with 529 screens in 57 locations. “If ‘Avatar’ works, ours [fourth quarter] is saved.”

The long-awaited sequel, which has cost at least $350 million to produce, has weathered dramatic changes in the entertainment business, as well as multiple delays and a transfer of corporate ownership from 20th Century Fox to Disney, with the latter taking over the former in 2019. As a result, the COVID -19 pandemic in 2020 productions, including Cameron’s in New Zealand, and cinemas closed.

“Even after we were allowed to go back to work, the question was… ‘When we finish this film, will there be any theaters to show it at that point?'” said Cameron at the launch of “The Way of Water” at its world premiere in London, according to a video posted by Variety on Twitter. “Tonight isn’t just about a new ‘Avatar’ movie. It’s about the cinema itself.”

The expectations are staggering. The first “Avatar” remains the highest-grossing film of all time, not adjusted for inflation. When originally released in 2009, “Avatar” generated $2.74 billion in box office worldwide. That total rose to $2.92 billion on new releases, including one in China last year, and edged out Marvel’s Avengers: Endgame at the top spot.

Cameron has said in interviews that the film has to be one of the top five grossing films of all time to be considered a success. That puts the goal at an astronomical $2 billion. Cameron already has two of the top three pictures in the world – “Avatar” and “Titanic” from 1997 ($2.2 billion). If “The Way of Water” hits its target, it will take three of the top five spots.

Avatar has the potential to become the most valuable film property Disney has acquired through its $71.3 billion acquisition of Rupert Murdoch’s entertainment assets from 21st Century Fox. Disney has already listed “Avatar 3, 4 and 5” in its 2028 release schedule. Even before purchasing Fox, the company was building a theme park attraction based on the fictional world of Pandora from the film at its Animal Kingdom in Florida.

Disney provided no executives to comment on this story.

According to the exhibitor, advance sales are strong. 3-D demonstrations, which were crucial for the success of the first “Avatar”, are weighted in the presale. The “Avatar” sequel is expected to gross $150 million to $175 million in U.S. and Canada ticket sales Thursday through Sunday, according to box office analysts, which would make it one of the biggest domestic debuts of the year.

Like its predecessor, “The Way of Water” will need to attract viewers to achieve its goals. The first “Avatar” started in the USA and Canada with only 77 million US dollars. Luckily for Disney, there’s little competition in the coming weeks.

Big screen supplier Imax Corp. has been preparing for this moment for six months, ensuring its technology can support Cameron’s specifications, preparing marketing plans and installing additional cinemas, said the company’s CEO Richard Gelfond.

“I don’t think the industry realizes how big this is going to be,” Gelfond said. “Not for a weekend, but for the life of the film.”

But theaters face problems that even Cameron can’t solve: namely, a shortage of films.

During the recovery from the pandemic, exhibitors have been teased with Hollywood films that reached and occasionally surpassed pre-COVID blockbusters, such as Spider-Man: No Way Home ($1.9 billion) and Top Gun: Maverick” ($1.45 billion).

Still, domestic box office sales are down 34% this year from the same point in 2019, according to data company Comscore, largely because there are fewer big movies in theaters. The ongoing impact of the pandemic preparedness left visual effects companies with a backlog, prompting studios to delay some titles until next year. Meanwhile, companies have continued to release a number of their films directly to streaming services in hopes of boosting subscription numbers.

So far this year, 67 films have been released on 2,000 or more screens, down 36% from the same period the year before the pandemic. according to the National Assn. the theater owner, a Washington, DC based trade group. The average box office for those titles this year is $89.23 million, similar to the average gross per film in 2019, the organization said.

Theaters are suffering from a “clear volume problem,” said Eric Handler, an analyst at MKM Partners. It’s a situation he and cinema operators expect to improve over the next year as the industry gets closer to normal release rates. In the meantime, a movie like Avatar: The Way of Water can provide audiences with trailers for upcoming movies, helping to build momentum.

“A movie can’t save an industry, but with a movie like ‘Avatar,’ it definitely raises awareness of the business,” said Handler. “When you have a high-profile film like this, it can make you go to the movies.”

There have been skeptics about the film’s prospects since the sequel was announced years ago. 3-D, once seen as the next big thing in the film show after Cameron revolutionized the technology, has fallen out of fashion after too many films were poorly converted to the format. With a running time of more than three hours, the running time could limit the number of showings and test the audience’s attention span and appetite for repeated viewing.

A common critique concerns the cultural relevance of “Avatar,” or lack thereof: how many people can even name the main character of the original “Avatar,” just as several generations of fans know every major character in the “Star Wars” universe?

Cameron has answers for the doubters.

“If people remember Jake Sully less than, say, Luke Skywalker, that’s partly because ‘Avatar’ is just a movie in its mythology,” Cameron told the Hollywood Reporter. “Marvel had maybe 26 films to build a universe where the characters would fertilize each other. So it’s an irrelevant argument. We’ll see what happens after this film.”

Some of those worries have dissipated over the past few weeks and months.

Cameron has a long history of defying long odds with films like Terminator 2: Judgment Day, True Lies, and Titanic. That track record has inspired a mantra for studio executives: Never bet against James Cameron.

Reviews were largely enthusiastic, praising the sequel’s innovative motion capture effects and great storytelling. According to Rotten Tomatoes, 83% of critic reviews are positive.

A hype-building re-release of Avatar earlier this year grossed an impressive $75.5 million, including $24.7 million in North America. The studio also managed to secure a coveted release date in China, although that market has been challenging for Hollywood films lately. “Wakanda Forever” and “No Way Home” were not released there. With films coming in, China remains uncertain due to the coronavirus situation in the country.

As for the 3D output, post-pandemic audiences tend to gravitate towards premium formats in hopes that their experience will become more of an event worth leaving home. “The Way of the Water” was made with 3-D in mind, not as an afterthought.

According to online ticket seller Fandango, the percentage of purchases for 3-D screenings for The Way of Water is the highest for any film since 2015’s Star Wars: The Force Awakens. Bagby said that “Avatar: The Way of Water” on Tuesday represented the fourth-highest pre-sale figures for the company since 2018. About 60% of pre-sales were for 3-D screenings, he said.

Thinking of the running time of over three hours, Bagby joked that he wished the film had a break so he could sell more popcorn. But he downplayed the extent to which it might alienate audiences.

“I wish we could get more seasons, but I also think that a movie like Avatar has a perceived value of great spectacle length,” Bagby said.

Also, it’s not like there are many other films competing for its screens.

Portions of this article are adapted from the Wide Shot newsletter, a weekly email about the entertainment business. Sign up here.