Covid-19 and the End of Cinema
The film industry has significantly reshaped itself around Covid-19, but can cinemas survive the ongoing pandemic?
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The year of 2019 saw the global box office reach new heights, grossing over $42 billion, with nine films making over $1 billion. In the following year, however, the Covid-19 pandemic has hit the film industry especially hard and the global box office spiralled to new lows, falling by upwards of 70 per cent as the highest grossing film of 2020, Guan Hu’s “The Eight Hundred”, marked the first time since 2007 that the top-earning film of the year didn’t surpass $1 billion.
The year 2020 started with an exciting awards season that saw “Parasite” take the Oscar for Best Picture – the first time a foreign-language film had ever done so. However, it quickly went downhill, with some pictures, such as “The Invisible Man” and “Sonic the Hedgehog”, sneaking in before a flurry of closures across March and April that saw cinemas across the world shut their doors. Upcoming releases such as “Fast & Furious 9” and the new James Bond film, “No Time to Die”, were delayed by months and even a whole year for the former. Production also ground to a halt across both films and television, pushing back the highly anticipated “The Matrix 4” and the “Friends” reunion special. Prospects for the year were looking bleak, Disney stocks falling by close to 60 per cent. The entire film industry was at a standstill – no revenue was coming in, and everyday studios and cinema chains were losing money through fixed costs. What came next was the only hope for the former, and perhaps a fatal blow to the latter – streaming.
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The first battleground between studios and cinema chains was a seemingly benign film: “Trolls World Tour.” Rather than being a family film about the cute toy brand, this film marked a bitter dispute, as Universal’s choice to release the film digitally saw it break records, making nearly $100 million in North America in just one week. Consequently, the studio made a statement that, in the future, all Universal films would be released at the same time in cinemas and digitally. Threatened by digital streaming for years, this could prove to be fatal for large cinema chains, breaking the agreement of a 90-day exclusive theatrical window. Consequently, AMC Theatres (the largest cinema owner in the world) unilaterally banned all Universal films. Although the ban was eventually revoked with an agreement of a 17-day theatrical window, this is significantly less than before.
As the pandemic lagged on through summer, delaying potential billion dollar releases such as “Wonder Woman 1984” and “Black Widow”, Disney tried their hand at the streaming game. Launched through a staggered release across the end of 2019 and into 2020, by the end of summer Disney’s streaming service, Disney+, had reached 60 million subscribers. Housing Disney’s impressive library, which included every Disney, Marvel and Star Wars film, and valuable 20th Century Fox properties such as “The Simpsons” after their merger, the streaming service also promised new and original content such as “The Mandalorian.” However, after production of most of their original content was halted, Disney faced a potential subscriber drop, not able to continually release content throughout the pandemic like the established Netflix.
As a result, they used the new live-action “Mulan” as a guinea pig of sorts, releasing it to Disney+ subscribers but behind a steep $29.99 paywall, which was additional to their Disney+ subscription fee. Understandably, the extra paywall didn’t go down well, and, when coupled with people boycotting the film because of its main star supporting the Hong Kong police in their treatment of pro-democracy protesters, as well as Disney thanking Xinjiang, the area with the Uighur concentration camps, for letting them film, it is estimated that “Mulan” made a loss when combining its steep $200 million budget with advertising costs. Realising their failure, Disney decided to release their new Pixar film, “Soul”, on the service without any additional costs, although it is currently unclear how many people have watched it given the lack of obligation for studios to report streaming figures.
At the same time as the “Mulan” debacle, cinemas around the world were beginning to reopen in late summer as the first wave of Covid-19 largely subsided across Europe and Asia. Warner Bros. saw this as their opportunity for the spotlight, positioning Christopher Nolan’s “Tenet” as the first new big release. The sci-fi epic was exactly the sort of film meant for the big screen and hoped to grandly revive cinema. The result was mixed. Its global box office haul was just under $363 million – far from Nolan’s recent work, but understandable given the circumstances. The US performance of $58 million was disappointing for a $205 million budget film and was beaten by China’s performance of $66 million, giving the latter a win in both countries’ battle to be the biggest box office market in the world. Cinema was clearly not ready for a big release again and it would take time for the dust to settle before people would crowd into cinemas again.
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As the pandemic started to worsen again across autumn and into winter, films were either released digitally or delayed post-April with the hope that a vaccine would have turned the tide on the pandemic by then. With this came Warner Bros.’ announcement that “Wonder Woman 1984” would come out on their streaming service, HBO Max, on Christmas Day in the US, and would be available digitally everywhere else, as well as in cinemas wherever possible. This was understandable as the film was originally scheduled for April, and would interfere with the studio’s packed 2021 calendar if delayed any longer. Yet, in early December came the shocking announcement that Warner Bros. would debut their entire 2021 slate on HBO Max at the same time as their cinema release.
Whilst maintaining that this would only be done for one year, this was devastating news for the cinema industry which desperately need as many people as possible to come to the cinema in 2021. Large blockbusters like “Dune” and “The Suicide Squad” will now not contribute as much to cinemas as they would have before. Consequently, some decided to boycott “Wonder Woman 1984”, resulting in poor reviews, as well as less than 50 per cent of HBO Max subscribers watching it. Unlike Disney, who make all of their films in-house, Warner Bros. mostly uses external production companies, and announced this move without consulting them, perhaps facing litigation from Legendary Pictures, the makers of “Dune.” The move is also expected to bring a loss of over $1.2 billion as the 2021 slate will not be released digitally like “Wonder Woman 1984”, meaning that it is largely being used as a tool to roll out HBO Max across the world and increase their subscriber base.
Entering 2021 presents an opportunity to review all of these developments together. Distribution studios have been constantly at loggerheads with cinema chains, and production studios seem ready to enter the fray. Yet public reception varied at different points and for less obvious reasons. Why was the reception to “Trolls World Tour” excellent, whilst Warner Bros.’ 2021 announcement largely sunk “Wonder Woman 1984” and “Mulan” made a net loss? The answer could be the cinema experience. Whilst family films like “Trolls World Tour” don’t necessitate the big screen, there is still clearly a demand to see large blockbusters in cinemas. As a result, while it may take some time for people to feel confident enough to go back into cinemas, Covid-19 will not be the end for the cinema industry. However, for smaller independent chains, it may already be too late.