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As Disney and James Cameron’s “Avatar: The Way of Water” climbs its way up the box office ladder — as of Monday, it was just shy of becoming the third-highest grossing film of all time — movie theater analysts are spotting an important trend in ticket sales.
While moviegoers have been gravitating towards premium cinema experiences in the wake of the pandemic, “The Way of Water” has easily outpaced the competition. Released in mid-December, the movie has drawn significantly more patrons to higher-priced showings on its way to more than $2 billion globally. Only this past weekend did it give up the no. 1 spot at the domestic weekend box office.
When people go to the movies they have several choices for how to watch a movie. Film formats include traditional 2D viewing, 3D shows and 70 millimeter movies, said Steve Buck of movie data firm EntTelligence. Auditorium formats are digital, often called standard, and then premium, which includes screens like IMAX, Dolby Cinema and ScreenX.
Throughout its run, “The Way of Water” has generated nearly 30% of its domestic ticket sales from premium format showings, averaging $17.80 per ticket, according to data from EntTelligence. For comparison, all other movies released in 2022 — not including “The Way of Water” — saw less than 14% of ticket sales from premium showings, averaging $15.76 a ticket.
Bolstering box office numbers for the film is the push from Disney and Cameron for 3D showings. This format, which can be found at standard theaters and in premium auditoriums, also carries a higher price tag. Since its release, the “Avatar” sequel has seen more than 56% of its tickets sold for 3D showings. These tickets averaged $16.30 a piece, while traditional 2D tickets sold for around $12.12 each.
In 2022, 3D showings accounted for 7.7% of all ticket sales. Removing “The Way of Water,” these tickets were only 3.7% of total sales.
The original 2009 “Avatar,” which is the top grossing film of all time, also did well with 3D and premium tickets. According to Variety, 80% of its haul came from those formats and auditoriums.
“The very essence of the film’s appeal is inextricably linked to the manner in which it is viewed by the audience and perhaps more than any other film series in history has 3D baked into its cinematic DNA,” said Paul Dergarabedian, senior media analyst at Comscore.
To be sure, “The Way of Water” has not reached its historic box office just because of surcharges for 3D and premium format screenings. While some questioned the franchise’s cultural relevance after more than a decade between films, the sequel has lured in moviegoers across the demographic spectrum.
The film has skewed toward male audiences between 18 and 34 years old, but “The Way of Water” has also brought in a significant number of older moviegoers, who, up until recently, had been reticent to return to cinemas.
“When I saw ‘Avatar,’ the new one, I had to see that one in 3D,” said Jorge Rodriguez, a 23-year-old film school graduate living in Miami. Rodriguez sees between two and four films a month, rarely opting for premium showings unless a movie demands it, as was the case for “The Way of Water.”
While “The Way of Water” has generated significant interest for 3D screenings, box office analysts don’t expect the format will experience the same wave of prominence as was seen in 2009 when the first film was released. There was a small window in the wake of “Avatar’s” release where studios marketed 3D heavily and audiences came out in droves for those features. However, that interest has waned in the last decade.
Premium formats, on the other hand, are expected to continue to draw moviegoers. Movie theater operators are investing heavily in upgrades to seating, projectors and sound systems. Many are removing traditional digital projectors and installing laser units, citing cost savings over time and a better picture quality for moviegoers.
One operator told CNBC that traditional digital bulbs need to be replaced after around 2,000 hours and produces so much heat, that theaters have to pay more to air-condition the rooms that these projectors are housed. Laser components last for 20,000 hours, meaning they can go years without being replaced. While there is a higher upfront cost for theaters to install these new projectors, it provides a crisper picture and less maintenance over time.
In the wake of the pandemic, moviegoers have become even more discerning about which films they will leave the house to see in theaters and how they want to view those films. In improving the baseline for these experiences, cinema owners hope to lure consumers back more frequently and persuade them to upgrade to premium screenings.
This can most recently be seen from AMC, which on Monday announced a new ticket pricing scale based on seat locations in its auditoriums. Dubbed Sightline, this new program allows customers to pay less, or more, for a movie ticket based on where they choose to sit.
Avid moviegoer Rodriguez said he is very price conscious when it comes to buying tickets, often only choosing to pay for premium showings for big blockbusters or horror films.
“I love the comfy seats, but mostly I go for the sound,” he said. “I really like the sound in theaters as opposed to the house.”