With Hollywood halting movie production, theaters operating at reduced capacities or closed nationwide and studios switching to streaming services, analysts say the COVID-19 pandemic may change the movie industry forever.
After months of surging cases in California, several Hollywood guilds and labor unions are recommending that in-person production of television shows and independent films be temporarily halted.
Warner Bros and Netflix have stopped filming a few shows and will resume shooting this week, according to Variety. Universal also has halted filming on six shows and plans to begin shooting again later this month.
As the pandemic continues to rage across the US, and as California becomes the coronavirus epicenter of the country, the film industry has halted production again after a complete shutdown in March, when California issued a strict stay-at-home order.
State health officials authorized shoots to restart in June. Hollywood studios and entertainment unions agreed to a new set of safety protocols for TV and film crews in September, which have increased production costs for studios.
The global film and television industry is projected to lose $160 billion of growth over the next five years, according to research by Ampere Analysis in May.
In the US, the world’s largest movie-making market, box office revenue for 2020 is estimated at $2.3 billion, compared to $11.4 billion in 2019, according to The Hollywood Reporter.
For the first time, China supplanted North America as the world’s top moviegoing market in 2020, generating an estimated $2.7 billion in ticket sales.
Theaters will be hardest hit. The global cinema market is expected to contract sharply in 2020, with cinemas forced to close and major Hollywood releases delayed.
Cinema revenue is projected to drop globally by 65 percent to $15.5 billion in 2024 from $45.1 billion in 2019, according to PricewaterhouseCoopers’ Global Entertainment and Media Outlook 2020-2024.
In the US, cinemas remain closed in Washington, Oregon, Illinois, New Mexico and Minnesota, while other states permit reopening by region or at reduced capacities, according to the CinemaSafe website.
The nation’s more than 5,400 cinemas were abruptly closed in March to slow the spread of the coronavirus. Fewer than half of the locations are open now, and some have gone dark permanently, according to the National Association of Theater Owners, which also warns that 70 percent of small to midsize movie theaters are at risk of shutting down without federal aid.
Studios have been forced to either release movies online or postpone their biggest films. Those that have been sent to streaming platforms due to the pandemic include Warner Bros’ Wonder Woman 1984 and Disney’s Soul on Dec 25, as well as Mulan in September.
Disney’s Black Widow is slated for May 7, a year after it was first set to debut. It will be the first Marvel theatrical film to hit theaters since the start of the pandemic.
Warner Bros has recently announced that it will make all of its 2021 films available on the group’s HBO Max streaming service for one month on the same day they hit theaters. That’s 17 movies, including some potential blockbusters, such as Godzilla vs Kong, The Suicide Squad and The Matrix 4.
The move, called “dramatic” by industry analysts, is to boost subscriptions to HBO Max, which was launched in May in the US and charges $15 a month.
John Stankey, CEO of AT&T, which owns Warner Bros, told an investor conference last month that the decision was a “win-win-win” for the company, its partners and consumers that fits current market trends and consumers’ psyche amid the pandemic.
But the company’s strategy has drawn criticism from filmmakers, with Christopher Nolan, director of Warner Bros movies such as Inception and Tenet, the most vocal critic.
“Some of our industry’s biggest filmmakers and most important movie stars went to bed the night before thinking they were working for the greatest movie studio and woke up to find out they were working for the worst streaming service,” he told The Hollywood Reporter.
“This is going to forever change how we look at the movie business,” Hollywood producer Jason Blum told the Los Angeles Times. “It’s the biggest thing to happen to the movie industry in my lifetime.”
The “only real benefactor” of the pandemic has been subscription video on demand platforms such as Netflix and Disney Plus and Amazon Prime Video, said the Ampere research firm, which projected a 12 percent gain in additional revenue growth over a five-year period for streaming service.
Media conglomerates are engaged in a fierce battle for streaming market share. Following the introduction of Disney Plus and Apple TV in November 2019, Warner Bros and NBCUniversal joined the race by launching HBO Max and Peacock in 2020. Discovery Plus is the first new streaming service to launch in 2021, as more viewers prefer streaming platforms.
The shift of movies from theaters to streaming services started years ago as Netflix pushed to stream movies at the same time as they hit cinemas. The pandemic has accelerated the transition in the past few months, raising questions about the future of the movie business.
Though Warner Bros’ executives said the company’s streaming strategy is a “unique, one-year plan”, many in Hollywood believe that the industry will never be able to go back to its old ways.
“US studios are fundamentally changing how they reach customers, with most launching or planning to launch their own streaming platforms. Films will reach huge numbers of viewers via streaming platforms,” said a PricewaterhouseCoopers report.
Source: China Daily