Theaters Hit Hard by Coronavirus as Streamers Reap Rewards

The coronavirus is hitting the National Association of Theatre Owners particularly hard, as local governments close movie theaters and consumers turn to streaming services. Regal Cinemas announced it is closing all its theaters, effective today, until further notice. Meanwhile, studios are reconsidering the exclusive 90-day window for theatrical exhibition. Universal Pictures is the the first major studio to announce a change to the traditional model. “We hope and believe that people will still go to the movies in theaters where available, but we understand that for people in different areas of the world that is increasingly becoming less possible,” said NBCUniversal CEO Jeff Shell.

Starting this Friday, explains Recode, movie fans will have the option to rent “Emma,” “The Hunt” and “The Invisible Man” via on-demand services for $20. “On April 10, the day ‘Trolls World Tour’ was supposed to be in theaters, Universal will let people rent that one at home, as well.”

This is significant since “some customers and some studios have been asking for this for years — either by allowing so-called ‘day and date’ releases, where you can watch the movie at home the same day it comes out in theaters, or, more modestly, by shortening the ‘window’ between the time movies come out in theaters and the time you can watch them at home.”

Even so, NATO chief executive John Fithian said, “theatrical admissions have been stable and box office has consistently grown,” with owners celebrating a “robust 2019 box office.” North American ticket sales totaled $11.4 billion in 2019, down 4 percent from 2018. But a closer look reveals that the number of tickets sold in North America actually peaked in 2002.

The New York Times reports that, in 2002, 1.6 billion tickets were sold in North America, whereas “in 2019, attendance totaled roughly 1.2 billion, a 25 percent drop — even as the population of the United States increased roughly 15 percent.” Theater owners have raised ticket prices but, said studio executives, “there is limited room for continued escalation.”

Studios were already steering “smaller dramas and comedies toward streaming services instead of theaters.” Now, with the coronavirus, studios have postponed most theatrical releases through the end of April, and “cinemas will soon run out of high-profile new films to show.”

According to LightShed Partners founder Rich Greenfield, “the disruption [will] speed the ascendance of streaming.” He predicted that, “most of the global exhibition business will be in bankruptcy by the end of the year.” “Now studios are going to think more and more about why they are relying on third parties to distribute their content,” he added. Studios, even while they postpone production and release of feature films, “have been careful to express loyalty for theaters.”

The question remains if the pandemic will “hasten long-brewing changes in the way that new movies roll out.” Up until now, theater chains such as AMC, Cinemark and Regal have fought off moves to shorten the 90-day exclusive window, although many entertainment companies are eager to do so.

Disney, for example, is “clearly mindful of the power of its video platform,” having most recently brought “Frozen II” to its Disney+ streaming platform three months earlier than planned. And yesterday, Universal Pictures revealed it would make certain new titles available for home rental via streaming services, “a break with longstanding Hollywood practice that could have wide-ranging reverberations,” suggests NYT. The decision makes “Universal the first old-line studio to become more like Netflix in its approach to film distribution.”

New York City and Los Angeles have already shut down movie theaters, even as AMC Entertainment, “the No. 1 multiplex operator in North America, said on Friday that it would reduce the number of theatergoers allowed in all of its auditoriums by 50 percent so that people could leave at least one empty seat between each other,” with restrictions lasting until at least April 30.

AMC’s stock price “has fallen 59 percent over the last month,” closing at $3.22. The chains all say they are “complying, where applicable, with state mandates on social gathering limits.”

Elsewhere, NYT reports that, “most cinemas in the United States remain open,” but that domestic ticket sales dropped 44 percent from last weekend to about $55.3 million. Comscore stated it was “the worst period for movie theaters in two decades,” since September 15-17, 2000, “when ticket sales totaled $54.5 million.” In today’s money, however, “the 2000 weekend generated roughly $83 million in ticket sales,” making this last weekend the worst “since ticketing data started to be independently compiled in the 1980s.”

Yesterday, Regal Cinemas announced it would be closing all its theater locations “until further notice.” “The dramatic shift comes amid declining attendance over fears of the rapid spread of COVID-19,” reports TechCrunch. “It also follows moves by a number of cities and states that have blocked large gatherings and all non-essential travel in order to encourage ‘social distancing’.”

Related:
Studio’s Movies in Theaters Will Be Offered for In-Home Rental, The New York Times, 3/13/20
Netflix, Disney Stop Production on Projects in Precautionary Coronavirus Measures, The Verge, 3/13/20