Studios Are Rescheduling, Theaters Are Closing, But Movies Are Not Dead
Welcome to part one of our deep dive into the state of your favorite pastime, movies. In this installment, we look at how studios and theaters are dealing with the effects of the pandemic. Next week, we discuss streamers and your film-watching behavior. Are movies dead or dying? Let us know what you think.
Over the last few weeks, a number of outlets and respected filmmakers have discussed how COVID-19 is accelerating the death of cinema. Few other industries are as reliant on mass gatherings as film from both production and consumption standpoints. Every week brings news of theater closures, production delays, and rescheduled blockbusters. It cannot be denied that the industry is looking down the barrel of great change. Is this change, however, necessarily death?
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Studios are having a rough time…
It is important to understand where most of these statements are originating from: Hollywood. While coronavirus hits every sector of the film industry, it should be noted that no one is being affected by the pandemic like major studios.
Streaming has been an interesting development in the last decade, but the major studios still focus on products intended for theatrical release. While films like The Batman have famously been delayed due to production issues, others like No Time to Die and Dune have been pushed back due to the current theater environment around the world, such as in the United States, where both New York and Los Angeles have been slow to reopen theaters amid safety concerns.
While the U.S. is not the only film market in the world (China is now, in fact, the largest), Hollywood studios make most of their money back on a film’s domestic gross, so their decisions are mostly made with their domestic market in mind.
Tenet, which was released in late September, has so far managed to gross $50 million in the United States from an estimated $200 million budget. At the moment, the last major blockbuster still scheduled for 2020 is Wonder Woman 1984’s Christmas release, but insiders predict this may also be pushed back. In an interview with Reuters, Wonder Woman director Patty Jenkins expressed her fears of how the industry will lose interest in making films for theaters and create content exclusively for streaming instead, saying “we could lose movie theater-going forever.” The interview also mentions that “expensive action movies like Wonder Woman would be much less common on streaming.”
While all these issues are relevant, it should be noted that these pessimistic statements are primarily coming from blockbuster directors. Jenkins statements, in addition to Nolan’s well-publicized battle with Warner Bros to open Tenet this year and keep it a theatrical exclusive, and that the fact that 2020 is the first year since 2009 without a Marvel film, show who is really taking a loss from the pandemic.
But studios are still planning big movies.
Prior to coronavirus, however, the industry had been experiencing a boom. Twenty-seven of the top-grossing films of all time were released between 2015 to 2019, with nine of those films being from 2019 alone, one of them being the highest-grossing film of all time. One of those 2019 films, The Lion King, has just had a sequel announced, with Moonlight director Barry Jenkins stepping up to the helm.
Three days after the Patty Jenkins Reuters article was published, it was reported that Jenkins had booked the job to direct Cleopatra for Paramount. Both the 1917 Cleopatra and 1963 Cleopatra have the distinction of being the most expensive movie made at the time, with the 1963 version almost bankrupting 20th Century Fox. So, while blockbuster filmmaking is certainly going through a rough patch that, yes, may extend years, it does not seem as though the studios are crying out just yet.
Theaters are losing money…
This may not be the death of cinema, but is this the death of the theatrical experience?
One of the noisiest players in the issue has been AMC Theatres, the largest movie theater chain in the world. Recently, it was reported that AMC may not have enough cash to last it past the end of the year and it may have to file for bankruptcy. It seems that, prior to COVID-19, AMC was playing it close to the chest and relying on its cash flow to keep it afloat. After all, who could’ve predicted that its sole income stream would be completely decimated?
Indiewire writer Tom Brueggemann, however, writes that AMC is being especially noisy about the death of theaters as a means of signaling to its various contractors and business partners, such as studios, landlords, and vendors, that it may need financial or operational leeway. According to Brueggemann, “Its bottom line is: We’re in trouble, but it’s not in your interests for us to go down; for your own good, work with us.”
The pre-corona model for film grosses was that a bulk of the gross would come from the first few weekends, then it would experience a significant drop-off and films would go out. If theaters are unable to get back to capacity soon, what may happen is that the roll-out period will be extended and films are kept in theaters longer and make their money steadily over time.
Will the current pandemic alter consumer habits to the point of no return?
In May, AMC CEO Adam Aron made the declaration that they will never again show Universal Pictures after it skirted the theaters and dropped Trolls World Tour onto premium VOD to not unpleasant results. Disney experimented with something similar by putting Mulan as a bonus on-demand title on Disney+ and was reportedly happy with returns, but refused to give data. Despite how “happy” they were with it, Black Widow was still moved to May 2021.
But theaters are still the best vehicles for gaining cultural traction.
While streaming companies like Netflix may sometimes resemble studios like Paramount and Universal, they are inherently different in how they generate their revenue. Since Netflix makes money from its subscriptions, it only creates content in support of its platform. It almost doesn’t even matter what you watch on Netflix, or if you even watch anything at all, as long as its offering is enticing enough for you to continue your subscription.
Speaking on her experience with her 2019 film The Farewell, Lulu Wang claims that she turned down a $15 million deal from a streamer in favor of independent entertainment company A24, who was able to give her movie a theatrical release. The theatrical release of The Farewell won a number of awards and, more important, kept the film in the cultural conversation.
The impact of keeping films within the discourse can be big, not just for the film, but the filmmakers themselves.
While less tangible than a cold, hard box office gross, the impact of keeping films within the discourse can be big, not just for the film, but the filmmakers themselves. Since The Farewell’s run, Wang has already booked her next projects, the sci-fi epic Children of the New World and the Nicole Kidman Amazon show The Expatriates (both of which were booked within months of The Farewell’s release).
On the other hand, Netflix’s similarly themed Tigertail, directed by Alan Yang of Master of None fame, was quietly dumped on the platform in April to moderately positive reviews, but has yet to garner the awards buzz The Farewell had or any (publicized) movement for Yang’s career.
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While these psuedometrics may not be as reliable as box office figures, it should be noted that these are some of the only metrics available as Netflix is famously guarded over its data. As a result, there are very few ways of measuring a Netflix film’s success against those of traditional studios. If the packaging and penetration are counted as part of a film's overall status as a product, it can be argued that Netflix actually offers a lower-quality product than the major film studios.