By: Kaytlin Thornton | Contributor
The coronavirus pandemic has massively impacted the movie theater industry in 2020, as social distancing guidelines caused films to halt production and cinemas to close. With the rise of video-on-demand streaming services, many wonder what this will mean for the future of the movie theater.
Before COVID-19 shook the world, the movie theater industry was already experiencing dramatic change. According to the World Economic Forum, with the time that movies are shown exclusively in theaters getting smaller and a decline in film attendance, both contributed to growing competition between the movie theater and streaming services.
“If content creators go direct to digital, they cut out the potential box office collections and satellite rights as a massive source of revenue generation for the producers,” said Siddharth Jain, Director at INOX Group, one of India’s top multiplex groups.
On April 10, 2020, in the midst of the pandemic, Universal’s “Trolls World Tour” became available as a digital rental for $19.99. Within the first three weeks, the movie had amassed nearly $100 million. Over the next few months, other studios followed suit, releasing several mid-tier budget films straight to video-on-demand. These releases include Warner Bros.’ “Scoob,” and Disney’s “Artemis Fowl.”
Though these movies have experienced success, studios have yet to take the plunge and ditch movie theaters completely. Many big-budget blockbusters, such as the latest James Bond film, “No Time To Die,” and Marvel Studios’ “Black Widow” have been pushed back to be released in-theater at a later date.
In recent months, movie theaters have slowly been trying to reopen in the wake of the coronavirus closures, but have seen little success. Director Christopher Nolan’s “Tenet” with a production budget of over $200 million, barely broke even globally.
Theaters are struggling to draw an audience without the presence of the bigger blockbusters. This loss of revenue is forcing some of them to shut down for the time being.
“In response to an increasingly challenging theatrical landscape and sustained key market closures due to the COVID-19 pandemic, Regal will be temporarily suspending operations at all of its Regal theatres in the U.S. as of Friday, Oct. 9.” Regal Cinemas stated.
However, for anyone still eager to see what is being released in theaters, AMC has vowed not to close any of the theaters that reopened, due to their recent deal that allows Universal to release their films on-demand after 17 days of being in-theater. In return, AMC will get some of the digital profits.
“Fortunately for AMC, our groundbreaking agreement with Universal Studios announced earlier this summer puts AMC in a position where we can open our theatres when others may feel the need to close,” AMC chairman-CEO Adam Aron said.
So, it seems for fans of the movie theater that all hope is not yet lost despite many challenges that the industry has been facing.