Covid-19 and the concurrent worldwide lockdown that followed likely needs little introduction. The deadly disease has made its way all around the globe and continues to wreak havoc on individuals, governments, and the world economy. Attempts to counteract and slow the spread of the Coronavirus have changed everyday life for almost everyone, and the theater industry is no exception. It seems now that with revenues devastated and media consumption fundamentally changed for the time being, this may be the theater industry’s most difficult period in modern history, and as such, it behooves us to examine what exactly has happened to movie-going experience, and what it may mean for its future.
As social distancing orders went into place and lockdowns began in earnest, estimates put the potential financial hit to the theater industry somewhere in the neighborhood of nearly 5 billion dollars. Some theaters, particularly in the United States, announced their intention to remain open despite social distancing rules, but this proved untenable. Country by country, theaters were closed by government orders, beginning in China around January, and finally the United States followed suit in March, signaling the beginning of many hardships for the industry.
The Financial Toll
Economically, the impact was immediate, with the U.S seeing one of the biggest box office drops in history, plunging to a 22 year low, even worse than the weekend after 9/11. Drive-in-theaters saw a boost in popularity, but alone, they could not account for even a fraction of what was lost. As a result of this sudden cratering in revenues, many studios made the difficult decision to postpone their release dates for upcoming films. The list of delayed films includes many that were projected to be blockbusters, including Black Widow, Mulan, No Time to Die, Trolls: World Tour, Scoob!, Minions: The Rise of Gru, and many, many more. With nothing to show and no audiences to show them to, theaters realized they were going to have no choice but to try and swallow the losses for as long as they could. AMC in particular, which was already struggling pre-Coronavirus, has been forced to take on serious financial restructuring in attempts to prevent itself from going under.
Adaptation
The lack of movie theaters however, has not led to a complete shutdown of releases. As the pandemic continues with no clear end in sight, many studios have opted to explore new options for releasing their high-priority projects. With audiences stuck at home, many realized they could capitalize on the sudden explosion in demand for in-home entertainment. Frozen 2 led the way, opting to release on Disney+ much earlier than planned, with Disney CEO Bob Chapek praising the movie’s “powerful themes of perseverance and the importance of family, messages that are incredibly relevant.” Several other films followed suit with early releases like Birds of Prey and Sonic The Hedgehog. The early home releases were mostly relegated to already released films however, until Warner Bros. took the bold step of releasing Trolls: World Tour direct to video-on-demand rentals.
This decision became a massive point of contention between studios and cinemas. The film itself did well, raking in over $100 million in revenue despite the lack of theater showings, with Warner Bros. announcing they were considering simultaneous releases for streaming and theaters for other films in the future. AMC in particular took great issue with this, declaring that they would now refuse to show Warner Bros. films in theaters until a new agreement had been reached between the organizations. The National Association of Theater Owners as well as Chinese regulators also took the side of theaters, arguing that other studios should refrain from releasing movies to both theaters and VOD on the same date.
What’s Next?
While the Coronavirus continues its spread throughout the U.S. and lawmakers continue to struggle with how to address it, other countries have been more fortunate. China in particular, as one of the earliest hit, is now recovering, and has begun to reopen its theaters slowly, showing big films again such as Christopher Nolan’s upcoming film Tenet, which is expected to be a major moneymaker. U.S. theaters are still struggling under lockdown, unsure if they’ll be able to open anytime soon.
AMC and Warner Bros. have resolved their differences in an unprecedented new deal, which allows studios to, for the first time in decades, release their films on other platforms after only 17 days in theaters instead of the traditional 90. The agreement could potentially re-shape how audiences access big budget films, allowing quicker and more convenient digital releases for those who prefer the comforts of home. Disney has already revealed they are also planning a straight to VOD release for Mulan, which was delayed several times, but will now be coming directly to Disney+.
Despite the current difficulties and changes, some believe things will return to normal eventually. Marcus Theaters CEO Greg Marcus argues that people will want to return to the status quo in time: “We believe human beings have an innate desire to get out of the house.”
Whether or not Coronavirus has permanently changed the theater industry is difficult to say, but the effect it has had is unprecedented, inestimable, and will likely leave lasting damage. Whether theaters will rise to prominence again, or be forced to adapt to a new status quo remains to be seen. The usual methods of film creation and delivery are being bent and broken in ways they never have before, and the future is uncertain for everyone.
