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Not Another Box Office Test Balloon

As theatergoing once again falters in the face of the delta variant, the performance of Disney’s ‘Shang-Chi and the Legend of the Ten Rings’ could have major ramifications in Hollywood

Disney/Getty Images/Ringer illustration

Since movie theaters began reopening across the country this spring, Hollywood has eyed seemingly every major release as a stress test of the cinema industry’s vitality. First, it was Godzilla vs. Kong, then A Quiet Place Part II, then F9, and so on. Everyone wanted answers to the same questions: Are the worst days of the pandemic behind us? And if so, are movie theaters finally back?

Just under two months ago, the response to both questions was a tentative “yes,” at least in the United States. Vaccines were widely available to those eligible, and returns at the box office were rising. There were some caveats: Many theaters continued to operate at reduced capacity, meaning no blockbuster could ever hope to replicate pre-COVID revenues. But in June, F9 crossed the $100 million mark in record time for a pandemic release, and weeks later, a strong opening-weekend showing from Marvel’s Black Widow cemented a growing feeling of encouragement. Audiences were once again willing to see superhuman characters duke it out on a big screen.

Then, of course, the delta variant began to surge, the enthusiasm to return to public spaces dwindled, and DC’s The Suicide Squad tanked at the box office despite critical acclaim. Less than a month after Black Widow brought in an almost-normal total of $80 million in its first weekend, the next superhero blockbuster on the calendar barely managed to crack $26 million.

That brings us to the next superhero tentpole on the calendar, Marvel’s Shang-Chi and the Legend of the Ten Rings, yet another film that stands as a bellwether for the future of theatrical releases. Shang-Chi has a lot going for it ahead of its release next Friday. After Black Widow premiered simultaneously on Disney+ for a fee of $29.99, Shang-Chi is the first Marvel movie to debut exclusively in theaters in more than two years. It features the first all-new lead character of Phase 4 of the Marvel Cinematic Universe. Early reviews are strong. And it has historic appeal as the first Marvel film to feature a predominantly Asian cast.

But Shang-Chi also has a couple of key disadvantages. Besides the obvious threat of delta, the film’s arrival on Labor Day weekend could diminish returns—historically, the holiday is one of the lowest-grossing periods of the year for theaters. With summer nearing its end and schools soon resuming, Americans tend to flock from their homes for one last getaway before chillier weather. Combined with the reality that the pandemic has become worse than ever before in some places, it’s not difficult to imagine crowds wanting to avoid indoor spaces.

Stakes are high for Shang-Chi, as well as Marvel and Disney at large. The movie’s success could determine how Disney decides to release movies in the future. In an earnings call earlier this month, Disney CEO Bob Chapek called the film “an interesting experiment” and “another data point” as the company evaluates whether to continue pursuing a day-and-date release strategy in theaters and on Disney+, as it did with Black Widow. In Shang-Chi’s case, Disney was forced to adhere to a 45-day exclusivity window in theaters due to agreements it struck with exhibitor companies. That didn’t stop Shang-Chi star Simu Liu from lambasting Chapek’s comments on Twitter, saying, “We are not an experiment … we are the celebration of culture and joy that will persevere after an embattled year.”

Even in the near term, Shang-Chi could have a domino effect on the next Marvel film to follow it, Chloé Zhao’s Eternals. Unlike Shang-Chi, Disney has the ability to shift Eternals to a day-and-date release on Disney+, and studio sources told Vulture that Eternals November 5 release date could be delayed if Shang-Chi underperforms. That rollout strategy has proved to be controversial, and perhaps not as financially successful as studios would have the public think. Yes, Black Widow pulled in an additional $60 million through Disney+ on top of its $80 million domestic opening, but it earned just $26.3 million at the box office the following weekend—a 67 percent decline, and the sharpest drop ever for any MCU movie. The numbers suggest the hybrid-release strategy cuts into profits long term as some viewers no longer see a blockbuster in theaters—possibly more than once—and then buy or rent the film again at home later down the line. Creators themselves may not favor the strategy as well; Scarlett Johansson certainly doesn’t.

But Disney executives won’t be the only ones making release decisions if Shang-Chi disappoints; the whole industry will be monitoring its results, as film after film from studios across Hollywood has suffered extensive pandemic-related delays. “It’s an indicator not just for what Disney decides, but the entire industry,” Shawn Robbins, chief analyst at Box Office Pro, tells The Ringer. “They’ll want to get a firm read, and it’s going to help every studio decide what it’s doing for the rest of the year.” MGM declared that the new James Bond feature No Time to Die, already delayed thrice, will drop in October no matter what; Warner Bros. has already committed to a day-and-date release for Dune in theaters and on HBO Max. But the fate of the new Venom movie, for example, remains less clear.

What should we expect, then? Box Office Pro estimates a range of $35 million to $55 million for Shang-Chi’s opening four-day weekend, which could best the Labor Day weekend record of $35 million. Ultimately, the only way Shang-Chi will truly set off a chain of Hollywood reschedulings is if it’s an abysmal failure. Should it be successful, moderately or massively, it’ll be less of an encompassing statement on the health of theatergoing and more a testament to Marvel’s dominance and Disney’s penchant for making crowd-pleasing popcorn fare. After all, one week after The Suicide Squad, Disney’s Ryan Reynolds–led Free Guy beat projections by more than 40 percent, adding an unexpected layer to the narrative on delta’s debilitating power at the box office. “At the end of the day, it seems like if the quality of the movie and the overriding sentiment is very positive—and it’s only available in theaters—that bodes very well for a movie,” says Paul Dergarabedian, a senior media analyst at Comscore. “As serious as the pandemic is, it now feels like a ‘dog ate my homework’ excuse for movies—you can’t hang your hat on that if it’s the reason a movie doesn’t do well.”

Dergarabedian points to the 15 to 35 age group that’s driving the box office at the moment, a favorable factor for Shang-Chi. It’s also not rated R like The Suicide Squad, nor does it suffer from confusing branding or share a title with a film that was widely panned five years ago. Beyond that, Robbins says, the significance of Shang-Chi’s diverse representation can’t be underestimated; Black Panther and 2017’s Wonder Woman performed impressively. Plus, the weight of Marvel’s brand obviously shouldn’t be discounted. “Just look at the new Spider-Man trailer, it was the talk of the internet for 24 hours. It really reaffirms everything we’ve been talking about—people want to see it in theaters,” Robbins says. “Who knows where things will be in four months, but if things stay level or even get better, it’s easily going to be the biggest movie of the year.”

With Shang-Chi on the docket first, Disney will be hoping the passion for Spider-Man translates into passion for the MCU at large.