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October marks best box office month but hybrid releases threaten 'long-term potential': Analyst

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Comscore Senior Media Analyst Paul Dergarabedian joins the Yahoo Finance Live panel to discuss October's record box office results.

Video Transcript

- The box office is in recovery mode. According to new numbers from Comscore, October was the best month of the pandemic, with domestic ticket sales clocking in at $6.38 million, significantly surpassing the previous record of nearly $584 million. That was set back in July.

Now, theater stocks are surging across the board on the heels of this news. And joining us to discuss is Comscore Senior Media Analyst Paul Dergarabedian. I hope I got that right, along with--

PAUL DERGARABEDIAN: "Der-gare-uh-beedian," you did great.

- Thank you. Thank you so much-- along with Yahoo Finance's Alexandra Canal. And I just-- let's get your big-picture view on what's happening with the box office. We just had "Dune." I think it's clearing some pretty decent numbers but not quite as high as some of the makers would have expected or hoped. How is the box-- the box office right now?

PAUL DERGARABEDIAN: Well, you know, to be where we were a year ago, when the box office was literally at a standstill, to where we are now, with an October that generated more business in terms of revenue in North America, generated more dollars than the month of July? That never happens, because July is in the heat of the summer, movie season, generally posting big numbers. You had the month of July generate over $1 billion in certain years, depending on the movies that were out in theaters.

But to have October, this October of 2021, be the biggest-grossing month of the pandemic era, meaning since March 20, 2020 when theaters essentially shut down, is a testament to how much people want to go back to the movies. But also you've got to have great movies out there to draw people to the multiplex.

ALEXANDRA CANAL: And hey, Paul, speaking of those big movies, we had "James Bond," "Venom 2" leading the way last month, along with "Halloween Kills" and "Dune." Now, those last two titles were hybrid releases. Many analysts have said that this hybrid model cuts into box office sales. So what's your take when it comes to the future of day-and-date releases? And does this mean we have to lower our box office expectations for those types of films?

PAUL DERGARABEDIAN: Well, that's a great question, Alexandra. I mean, really, it's all about the quality of the movies. And take "Dune," for instance. I think the reason that earned $40.1 million when it opened a week ago is even though it was available on HBO Max, is because true film fans who love Denis Villeneuve and saw the trailer, they were like, wow, I could watch this at home. But I want to see this in a movie theater. That's great news for theaters.

And though I do believe that hybrid releases, meaning opening a movie same day in theaters as at home, hurts the long-term potentiation for box office. In the case of a movie like "Halloween Kills," which horror movies are great to view at home, but also a lot of people chose to sought out-- to see that movie in theaters. And that movie generated about $50 million in its opening weekend on open with about $55 million. "Venom" opened with $90 million just a few weeks ago. And that really drove this October to have a $90 million opening, which, by the way, was the biggest opening of the pandemic era for a movie in North America.

We're still waiting for the $100 million opener. I think it may be on the way. We'll have to see.

ALEXANDRA CANAL: And just to piggyback off of that, we have gotten reports that "Dune" is the most-pirated movie two weeks in a row since its debut in theaters and on HBO Max. Do you think studios have to look at the piracy issue a little more closely for these hybrid films?

PAUL DERGARABEDIAN: Absolutely, because you can, literally, if you're unscrupulous, make a perfect copy at home. You're literally having that film beamed into your living room in a digital format. And I think that is a big issue beyond just the potential for box office, I think, being hurt long term by going day and date. There's nothing wrong with a 45-day window. And actually I think it enhances a film's prestige, that exclusivity of having it just in theaters.

But again, "Dune" was a special case, did actually better than I think-- I mean, it would have potentially done more pre-COVID. But given that it's available on HBO Max, which, by the way, isn't free-- it's not like everyone just gets a day-and-date movie automatically. You have to subscribe or pay a premium. So there is a bit of a heavy lift there, not as much as buying into the heavy lift of going to a movie theater.

But I think this is great news for theaters, the fact that we had a record month for the pandemic era. We've got a big couple of months coming up, November, December, with a lot of huge movies in the pipeline. And this October performance creates a big tailwind momentum heading into November and December of this year.

- Well, let's talk about some of those movies and the expectations for them. You just mentioned that we're still waiting for our first $100 million movie or weekend in North America. What are some of these titles? And what's some of the buzz around them?

PAUL DERGARABEDIAN: Well, I think Spider-man if you look at how many people have been talking about that movie on the social media platforms, how many views the trailer's had on YouTube and the excitement surrounding that movie, and Tom Holland's just a brilliant Spider-man, I think that's one to really look out for. Of course, you have "Eternals" on the way. You have "Ghostbusters-- Afterlife," which I think is getting already a lot of momentum because of the buzz surrounding that film.

"West Side Story" is on the way, of course, "The Matrix-- which will be-- Resurrections--" which will be a day-and-date release as well available on HBO Max. So there's a lot going on here, a lot of moving parts. And the fact that we have still hybrid releases out there, but also the movie theaters simultaneously doing really well with this record October for the pandemic era I think should make people very excited about the future of cinema, the big screen experience. And going out to the multiplex is something we all want to do. We have to have great movies too, for sure.

ALEXANDRA CANAL: Yeah, we definitely have a very strong slate to round out the year. But do you have a particular number in mind for how the domestic box office will close out 2021?

PAUL DERGARABEDIAN: Yeah, you know, that's an interesting one because right now we're at about $3 billion in North America year to date. Contrast that with 2019 when we were out at over $9 billion. So you could see we're not back to normal. But we're on that road to recovery. I think a solid number for this year-- I mean, if we're at $3 billion now, we have another couple of months. Usually, the last week of the year is huge at the box office.

I don't know. Maybe we get $4 billion plus. I would love to see $5 billion. But I think 2022 and '23 or the years where we can start approaching more of that typical $11 billion in North America and $40 billion plus around the world. It's just going to take some time. The signs are all there that the movie theater is recovering in a big way, that people want to go out to the movies.

- $40 billion, it's a big number, pretty impressive there. Thanks for that. Paul--

PAUL DERGARABEDIAN: You bet.

- Paul Dergarabedian, Comscore--

PAUL DERGARABEDIAN: Paul D. Paul D is fine.

- Paul D, well, I'm going to use that from now on. You're definitely coming back.

PAUL DERGARABEDIAN: Please. It's all good.