Things are not looking good for the movie business in 2020. That may seem like an understatement at this point, but new research suggests it is going to get worse before it gets better. With movie theaters closed since mid-March, it is now expected that the U.S. box office will plunge at least 50 percent, if not more, this year, when compared to 2019.
This comes from a recently published report from research company MoffettNathanson. The company expects that the 2020 box office will total $5.5 billion, which represents a 52 percent decline year-over-year. In 2019, box office receipts totaled $11.4 billion. Unfortunately, even this is a relatively optimistic projection that relies on several major factors.
For one, this relies on major theater chains opening their doors again in July, which is expected to be the case. It also takes into account major blockbusters such as Tenet and Mulan hitting their current target release dates. If, for whatever reason, they are delayed to later in 2020, the box office could plummet even further. The authors of the report had this to say.
"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."
Since the shutdown occurred, studios have had to get creative to keep revenue flowing in the meantime. Universal, for example, released Trolls World Tour via premium VOD. This proved to be financially viable, it seems, as the studio has said they will continue to do it in the future, even once theaters reopen. That led to tensions with chains such as AMC and Regal.
Other studios, such as Warner Bros. and Disney, have also experimented with PVOD offerings during these past few months. Theater chains have typically enjoyed a 90-day theatrical window before new releases could be made available on home video. Also outlined in the report from MoffettNathanson is the suggestion that studios will have the upper-hand in this matter moving forward.
"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. 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 reduces the leverage the exhibitors have as they would be unlikely to boycott multiple studios' upcoming releases."
It is difficult to predict what theatrical distribution will look like on the other side of all this. For now, drive-in theaters have been propping up the industry in an unlikely turn of events. But that represents a small fraction of screens compared to traditional cinemas. This news comes to us via Variety.