I used to love rushing to see the newest film in theaters any chance I was free, mostly because of how incredible the atmosphere felt. Nothing was better than the smell of popcorn, the planning in advance and the silence from whichever family or friend I brought with me while the movie played. It was an exciting experience (regardless of the quality of the film) and something I’ve dearly missed during the pandemic. Unfortunately, I have a strong feeling that these past seven months will have a greater impact on the film industry than we are anticipating. The world has been staying home, safely watching movies on streaming services and other platforms. With the rise of streaming services already threatening the fate of theaters pre-pandemic, I can only theorize that the days of visiting movie theaters are gone.
While that statement may certainly sound bleak, the inevitable is beginning to happen. Movie theater chains all over the world are shutting down due to the pandemic, and there is no sign of them operating at full capacity until there is a vaccine for COVID-19. Just two weeks ago, Regal Cinemas shut down all 536 of their movie chains across the United States indefinitely. This was a response to many high-profile films changing their release dates to 2021, such as Dune, Black Widow, A Quiet Place Part II and especially No Time to Die. The latter getting pushed back to April 2021 was the tipping point for Regal, since they realized that there is little-to-no chance that any film gets released this year. Many theaters were banking on the success of the last big blockbuster film of the year keeping its release date, but once Warner Bros moved the James Bond project the fate of closing Regal seemed inevitable.
The odds are that another factor to Regal’s decision was due to the poor box office result of a Bond-esque film: Christopher Nolan’s Tenet. The writer-director’s films often draw in a large crowd (Interstellar, Inception, The Dark Knight trilogy, etc.). Pre-Tenet only his first two films, Following and Memento, failed to reach 100 million dollars at the box office. His other eight all managed to cross the 100 million mark, with five crossing half a billion and two (The Dark Knight and The Dark Knight Rises) surpassing one billion dollars. Nolan is a bonafide cash cow; if any director could get a film to make money during a global pandemic, it was him. The film has currently made a modest 333 million dollars after being released globally for six weeks, his lowest box office number since Batman Begins in 2005. This sounds positive, except the film needs 800 million dollars to break even. Between all the efforts Nolan made to release this film (including marketing during a pandemic), the film’s earnings have ultimately failed to live up to its pricey production cost. Since Nolan couldn’t make any money, what chance do other films have to make a profit?
Some studios have attempted to release their films amidst the pandemic with better levels of success than a near 500 million dollar loss. For example, Universal released Trolls: World Tour via video on demand towards the end of March. The film was the first to receive a VOD release amongst a few others to follow, and proved that its release could be successful. The 90 million dollar production also cost about 30 million dollars to market, so it needed a 120 million dollar profit to break even. Fortunately, it reached its goal and surpassed it. Trolls: World Tour made approximately 95 million dollars (77 million went back to Universal) in its first three weeks on VOD. It was able to make over 20 million dollars in theaters, and after three months peaked around 150 million dollars in VOD profits. Trolls: World Tour was still able to make approximately 40 million dollars in revenue, proving that a digital release could make money. Other films that have been released digitally include Scoob! in July and Bill and Ted Face the Music in September, both of which found success via their VOD releases given the current circumstances. It is possible to generate a profit from VOD sales, but it requires a moderate budget, good reviews, a great marketing campaign and appeasement to all ages (since family films are more likely to have a successful VOD release).
The demise of theaters has been inevitable way before the pandemic. In an article I wrote in 2017 (see link in sources), I argued that a poor summer box office showed that people preferred to stay home and binge instead of going to theaters. Yet given the circumstances, theater chain companies are currently doing their best to stay afloat. AMC is now offering the chance to rent out their theaters for private showings at $99 per theater. It’s a smart business decision when they are barely making any revenue right now, but it pales in comparison to the amount of money they would make from screening their gigantic blockbusters. It also doesn’t help that they are planning to sell 15 million shares of their company and file for bankruptcy soon, so the chances they will be able to stay alive are ridiculously slim.
The future for theater chains unfortunately looks very bleak. The problem is that there aren’t many solutions these companies can take to avoid the chances of bankruptcy. Very few people are willing to risk catching a deadly disease to see a new movie, and fewer studios are willing to risk losing millions of dollars hoping those people will go see their product. As wistful as I was thinking about my experiences going to theaters, I am not going to take any chances at a movie theater when I can watch on the small screen. It may be closed curtains for theaters right now, but when there is hope for a vaccine, there is hope for this industry.