COVID is killing cinema, can superheroes save it?
Christopher Nolan thought he could save the movie business by insisting on releasing Tenet in theatres at the height of the pandemic. Maybe he could have, but I’d say he was being a bit naive. Entertainment is a very fickle business. The way the audience reacts to the content is what could make or break a movie. And the best place to test audience reactions is in the cinema halls that we all used to frequent once upon a time. Before a deadly pandemic took over all our lives, that is. Just over a year ago, you could hear scores of moviegoers cheering and screaming as they watched blockbusters like Avengers: Endgame on the big screens. Now, these once jam-packed theatres are completely empty.
Theatre and cinema were in a steady decline for years. With the rise of various new streaming platforms like Netflix, Amazon Prime, Disney+, HBO Max, etc., people can now access a plethora of films and shows right from the comfort of their homes. A detailed report by the Motion Picture Association in 2019 shows that the number of frequent moviegoers declined, and the number of tickets sold to all consumers slipped across every age group compared to 2018. A frequent moviegoer is someone who goes to the cinema at least once a month. These people are responsible for 47% of all tickets sold. In 2019, there were 40 million frequent moviegoers, which is slightly lower compared to 2018. Even the annual movie attendance per person declined in both males and females in 2019.
Meanwhile, streaming and at home entertainment observed a boom. According to the report, in 2019, there was a 14% increase in the home/mobile entertainment market globally. This was caused by the content that is released digitally and on disc. The global total of online video subscriptions to streaming services like Amazon Prime and Netflix increased by a whopping 28% compared to 2018. So in recent years, with the increase of new and original content on streaming platforms, the number of movie goers have become less and less. Yes, people still frequent the cinema, but there has been a steady decline over the years.
When the COVID-19 pandemic hit the planet towards the beginning of 2020, the entire world was forced to go on a lockdown. This meant that every restaurant, pub, cinema, theatre, etc. had to close down as people were asked to stay in their homes. Movies that were slated to release in the upcoming months were pushed back, with studios facing enormous marketing losses as they scrambled to find a new date for their films. And with the growing uncertainty of how long this pandemic would last, the dates kept pushing back.
Now, with no way to pass time, and being forced to stay in our homes, audiences turned to streaming platforms to consume content. Even the frequent moviegoer had no choice but to delve into the realm of Disney+ and Netflix to watch a film. And with theatres and cinemas closed for months on end, the pandemic basically accelerated the decline of an already struggling movie industry. Around August-September, when things had started to look slightly optimistic, cinemas opened up again in some parts of the world. And the first major motion picture to have released then was Christopher Nolan’s Tenet.
This movie didn’t really do so well in the box office compared to how Nolan films are normally received by the world. After six weeks of global release, Tenet has grossed more than £235m worldwide — a number that means different things to different analysts. With a production budget of around £154m, it’s fair to say these are not the receipts Nolan or the Warner Bros executives were after. Theater executives thought Tenet would be the film that sent people cascading back into seats and restore a sense of normalcy to an industry that was essentially brought to a standstill by the pandemic. They hoped that people would get out of their houses to go see this Nolan classic. Sadly, that didn’t happen, and the low numbers generated by the movie pushed Warner Bros to make a move that changed traditional cinema.
Towards the end of 2020, Warner Bros announced that they would release their entire 2021 slate of movies onto HBO Max on the same day it would release in theatres. The first movie to have done this was Wonder Woman 1984, which debuted all over the globe on Christmas — both on the streaming service and in cinemas, wherever they were open. In the entirety of 2020, Warner Bros earned only a little over $235m from the box office by selling 25 million tickets. Compared to 2019, where they earned a staggering 1.57 billion dollars, this is abysmal. So it isn’t exactly surprising that they decided to try to find another way to increase their revenue.
Throughout 2021, a lot of big budget movies are slated to go on the floors. There are some big ensemble movies like Dune, Fast 9 and Suicide Squad 2. And not one, not two, but four Marvel movies. Including the highly anticipated Spider-Man: No Way Home, which is rumoured to have the cast of all previous Spider-Man movies with Tobey Maguire and Andrew Garfield. In the last couple of years, Marvel has always managed to draw massive crowds to the cinema with its larger than life movies. And their streaming shows of WandaVision and The Falcon and the Winter Soldier has already garnered critical acclaim. People have been watching these shows to gear up for the movies and after over a year of virtually no Marvel content, people are excited. Superheroes usually save the day in these movies. Can they save cinema too?
Black Widow comes out on July 9, worldwide. And there is a lot of pressure on that movie not just to do well, but also be able to draw crowds back into the cinema halls. In fact, there is probably more pressure to do the latter than the former. However, having pushed the movie four times in the past year, July 9 is their final push, and they will also be releasing the movie onto Disney+ for a fee on that exact same day.
Usually, there a theatrical window of at least 3 months before a movie in theatres is released onto a streaming service. This gives movies a second chance, in a way, to be able to earn a bit of revenue as people “rediscover” an underrated movie or if they simply couldn’t catch them in theatres. But because of the pandemic, all major studios broke the theatrical window and made various films available for home viewing almost immediately. For example, Disney’s Onward was on Disney+ within a month of theatrical release, Warner Bros’ The Way Back was available on home media just 12 days after release.
According to Warner Bros, each movie of their 2021 slate will appear on HBO Max for only one month before leaving the service. At that point, films will cycle through the usual release “windows,” leaving theaters when interest has run out and heading to iTunes, DVD and points beyond, eventually cycling back to HBO Max. Their lineup includes movies like Dune and Suicide Squad 2, both of which boast an ensemble cast and a larger than life blockbuster cinematic experience, will be released onto HBO Max on the day of theatrical release. And this move by the studio has been criticised not only by Christopher Nolan, but by many other executives, who think this model is disingenuous and think that it would force other studios to abandon the old model.
It is starting to look like WarnerMedia’s top priority is to boost HBO Max, because it is almost assuredly giving up hundreds of millions in box office revenue. This means that some of its big-budget movies ($200 million or more in production costs, plus tens of millions of dollars in marketing spending) will lose money, regardless of their reception by audiences. This move was also criticised by AMC Theatres, warning its investors that if it doesn’t find $750 million, it will run out of cash by the middle of January 2021.
It is no secret that cinema has been struggling, and with the onset of a global pandemic and the very controversial move made by Warner Bros, this is only going to accelerate. Back in October, AMC noted in public documents that “at the existing cash burn rate, [AMC] anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021.” The company estimated that in October and November, the monthly cash burn rate was $125 million. AMC isn’t making much revenue, and the one silver lining was having a slate of 2021 movies that could bring people back to theaters. With WarnerMedia shifting a few to HBO Max, that silver lining is disappearing.
Even so, the experience of going to a cinema and watching a blockbuster on the big screen is unlike any other. And while all of us have been staying home and sticking to various streaming services, we definitely miss taking that trip to the cinema hall to catch the latest flick. And while the industry is definitely declining, with the pandemic only having sped up the inevitable, people will still flock to the theatres when conditions improve. Because you cannot achieve a cinematic experience by watching something on your phone, laptop, or television. The industry will continue its steady decline, we are in the digital age, after all. But that frequent moviegoer will still go to the theatre to catch the latest theatrical experience. And who knows, superheroes might actually save cinema after all.
