U.S. box offices will suffer a severe impact from movie theater closures caused by the Covid-19 pandemic, according to data gathered by research company, MoffettNathanson. “Given the uncertainty around the key questions we mention above, including sticking to July release dates, when key markets reopen and willingness of movie-goers to return before a vaccine, our estimates today are very much a work in process with lots of volatility in the months ahead,” the note’s authors write.
The Wall Street analyst firm predicts that revenues from ticket sales will be cut in half, decreasing from USD 11.4 billion in 2019 to USD 5.5 billion in 2020, which equates to a 52% decline, a drop that could deepen if Cinemas aren’t opened by July, and if popular new releases, such as “Tenet” and “Mulan” that are supposed to debut that month get pushed back deeper into the year.
Box offices also noticed the challenges studios face as a result of pricey films, with releases in large markets, such as New York, San Francisco, and Los Angeles, all of which have yet to announce theater reopenings. These markets are not allowing cinemas to host patrons. “Tenet” is scheduled to debut on July 17. “Mulan” is supposed to premiere on July 24, a week later. Theaters have been closed since March.
The analysts are predicting “a significant bounce back” in 2021 to USD 9.7 billion, which they attribute to “a stronger release slate.” However, they address that this number could also fall lower if film production can’t resume safely and if studios begin putting more of their movies on streaming services or on-demand. It still lags behind the numbers that the box office put up in 2019 before coronavirus upended society. “In the past, exhibitors have been able to stand their ground; however, we again think this time is different in that all of the major studios (including now Disney for certain movies) are likely to be more aggressive with windowing strategies,” the note reads. “As long as multiple studios push forward with PVOD or some other form of window changes, the balance of power in favor of studios shifts even more in their favor and reduce the leverage the exhibitors have as they would be unlikely to boycott multiple studios’ upcoming releases.”
Studios have begun pushing movies onto streaming services they own, such as HBOMax, Warner Bros. with “Scoob,” and Disney Plus with “Hamilton” and “Artemis Fowl.” Other studios like Universal have put films such as “Trolls World Tour” and the upcoming “The King of Staten Island” on-demand as opposed to opting to delay their release until theaters are open again worldwide. MoffettNathanson expects that trend to accelerate in the upcoming months. Typically, there’s a roughly 90-day delay from when a film premieres in theaters and when it is made available for sale or rental.