Written by Raj Ashar
This past summer, auteur Christopher Nolan was primed to single-handedly bring back audiences to the newly reopened movie theaters with his film, Tenet. The movie had an immense budget, costing around 200 million dollars to make (Whitten). However, since its worldwide release, the film has only grossed 333.9 million dollars (Whitten), an underwhelming result that has led many other blockbuster films such as Dune and Wonder Woman 1984 to be pushed back to 2021 due to the unwillingness of moviegoers to return to theaters given the lingering coronavirus pandemic. Meanwhile, lower budget films like Bill and Ted Face the Music never had a full theatrical release, yet still raked in 32 million from video on demand (VOD), which was 128% of the film’s budget (Rawden). Just recently, Aaron Sorkin’s The Trial of the Chicago 7, was sold by Paramount to Netflix, thereby foregoing a full theatrical release and instead opting for a shorter one to retain eligibility for awards season (Mendelson). The pandemic has proven disastrous for theatres with many of the “tentpole films” pushing back their release date, and the lower budget films opting for VOD. Even the large production studios have been hurt. However, streaming services are now just hitting their stride, notably with the rollout of NBC’s Peacock and HBO Max.
Currently, movie theatres are struggling tremendously. In the second quarter of 2020, AMC reported a 561.2-million-dollar loss, and revenues were down 98% from one year ago (Lang). This forced them to strike a deal with Universal, allowing Universal to debut films on streaming within 17 days of a theatrical release, a move that many people believe will further reduce revenues (Lang). It’s clear that theatres are hurting right now, and with a vaccine still at least a few months away, they will be hurting in the near future as well. The question from this is when we get out: Will VOD and streaming become a more common pathway for some of the lower budget studio productions?
One way to try to predict this is a comparison of the costs. When The King of Staten Island was released, Universal was charging $19.99 for a VOD rental (Brueggman). In comparison, AMCs current price for a movie ticket is $13.69 for one adult (Movie Theater Prices). So, when more than one person is choosing to pay for the film, the VOD option becomes more economical, and much more so for each person watching the movie.
Currently, the top three streaming services by subscriber count are Netflix, Amazon Prime Video, and Disney+. At the outset of streaming services, they were seen as a competitor to cable: offering some of our favorite old shows and movies, along with a select few originals to watch. They have been largely successful in stealing the market share from cable; two of the largest cable providers, Comcast and DirecTV, lost customers between 2017 and 2019 (Chernev). Projections predict that cable subscribers will continue to fall in the foreseeable future as well, something that will be sped up with each new entrant into the streaming marketplace, especially free ones such as NBC’s Peacock service.
But now streaming services are shifting focus to cinemas, offering a plethora of films exclusive to their platforms. Between the top three previously mentioned services, 121 original films have been released, or are slated to be released this year (most of these came from Netflix). In contrast, Paramount, a major film studio has released, or plans to release, 14 films this year. Universal is currently slated at 11, and Columbia Pictures are at 7. Granted, the studio numbers are lower due to the pandemic, but for reference, Universal released 20 films in 2020. This is all to say that streaming services have essentially caught up in content production to the big studios.
Now, what do all these numbers mean? Honestly, I don’t know, nor does anyone else. We humans are irrational, and no one will ever be able to predict for sure. However, how I see it is the death of lower-budget movies with low expectations having extensive runs in theatres. In the future, we likely will not see comedies with mediocre expectations like The House playing for weeks on end in your local theatre. However, this will not necessitate the death of theaters. Cinemas will be reserved as the place for the special movies: the ones from the big-name directors such as Nolan, Anderson, Scorsese, Bigelow, and Cameron. It will also be the place to watch the next installment of a top franchise film, so we don’t get it spoiled for us. It’s unclear whether this transition towards VOD and streaming will kill off movie theatres, and honestly, I hope it doesn’t, but the entertainment industry will surely not be the same when we exit this pandemic.
References
AMC Ticket Prices – Movie Theater Prices. (n.d.). Retrieved October 24, 2020, from https://movietheaterprices.com/amc-ticket-prices/
Brueggemann, T. (2020, June 29). ‘King of Staten Island’ Continues Universal’s VOD Dominance as ‘Eurovision’ Scores at Netflix. IndieWire. https://www.indiewire.com/2020/06/king-of-staten-island-continues-universals-vod-dominance-as-eurovision-scores-at-netflix-1234570397/
Chernev, B. (2019, April 11). 25 Cable TV Subscribers Statistics [Updated in 2020]. TechJury. https://techjury.net/blog/cable-tv-subscribers-statistics/
Lang, B. (2020, August 6). AMC Theatres Reports Massive Losses Due to Coronavirus Closures – Variety. Variety. https://variety.com/2020/film/news/amc-theatres-losses-quarter-1234727900/
Mendelson, S. (2020, October 18). ‘Trial Of The Chicago 7,’ Now One Of Netflix’s Most-Watched Movies, Is A Huge Loss For Paramount. Forbes. https://www.forbes.com/sites/scottmendelson/2020/10/18/trial-of-the-chicago-7-already-one-of-netflix-most-watched-movies-represents-a-huge-loss-for-paramount/#33311b2c292d
Rawden, J. (2020, October 1). How Much Bill And Ted Face The Music Actually Made From Its At-Home Release. CINEMABLEND. https://www.cinemablend.com/news/2555937/how-much-bill-and-ted-face-the-music-actually-made-from-its-at-home-release
Whitten, S. (2020, October 22). Warner Bros. says “Tenet” wasn’t a “home run,” “not optimistic” about movie theaters rebounding. CNBC. https://www.cnbc.com/2020/10/22/warner-bros-says-tenet-wasnt-a-home-run-not-optimistic-about-cinemas.html