The Impact Of COVID-19 On The Film Industry
The film industry is one of the largest sources of entertainment in the world. It dates back all the way to the 19th century. Each year thousands of movies are created bringing in billions of dollars in revenue. Before coronavirus created lockdowns and forced the temporary closure of movie theaters all over the world, the entertainment industry was on a roll. In 2019, the American box office pulled in more than $11 billion, while global box office receipts were roughly $42.5 billion. With that being said, 2020 and the rise of the COVID-19 pandemic, the film industry has suffered immensely. Here Kaleidoscope Pictures discusses the impact of COVID-19 on the industry and where it’s headed.
Streaming Services
Due to the popularity of streaming services (Netflix, Hulu, Disney+) and the heightened prices of in-person movie theaters, the world was already seeing a decline in cinema revenue. This exploded and gained momentum with huge theater chains like AMC, Cineworld, and Cinemark closing their venues because of the global coronavirus pandemic. Due to this, subscribers to streaming platforms skyrocketing as they became the only way for consumers to get any entertainment during the lockdowns. Netflix’s paid subscribers topped 180 million while Disney+ raised their number of paid subscribers to 50 million during the pandemic. Also, streaming firm Roku’s subscriber base of 40 million users is expected to jump as high as 125 million. Streaming services have become the norm and cinemas are suffering. As the coronavirus continues to grow and new strains are coming about this has prevented the reopening of theaters. Cineworld recently announced that they would be temporarily closing theaters in the United States after audiences failed to show up for Tenet, Christopher Nolan’s latest film. This is just one of the impacts COVID-19 has had thus far.
Premieres To Recoup $$$
Hollywood production budgets get up in the hundreds of millions of dollars. Before COVID-19 these production budgets would recoup a major chunk of their money from premieres. It takes packed theaters to recoup that investment. But with streaming to contend with and people not feeling safe enough to go to theaters, studios are now hesitant to release their films. A prime example of this in 2020 was the underperformance of Tenet in American theaters. Because of this failure to show up to cinemas, the film wasn’t able to recoup as much money as they thought. This in turn has affected future release dates. Wonder Woman 1984, which was initially set to premiere in October, got moved to Christmas Day. Disney’s Black Widow and the latest Bond film, No Time to Die, have been moved to 2021. Films like Warner Bros.’ Black Adam and Minecraft have fared even worse, with no set release date revealed for both films. With no blockbusters to showcase, theaters are forced to close. With theaters closed, where will Hollywood showcase these blockbusters?
Delays In Production
The health and safety protocols introduced to adhere to the spread of the coronavirus on film and television sets include regular testing and the enforcement of a quarantine. Because of these protocols, productions often find shooting pushed back a couple of weeks or more whenever a member of the production tests positive. Affected projects can range from blockbuster films to long-running soap operas. Budgets have also ballooned because of the added requirements.
A key example, ‘Jurassic World: Dominion’ had to stop filming after a small number of positive tests emerged among the film crew. Under the strict health and safety protocols, the film had in place, production had been delayed for two weeks. The strict health and safety protocols also come with a hefty price tag. Since it involves thrice-a-week coronavirus testing and a quarantine bubble for cast and crew, the film’s budget reportedly increased by more than $3 million. The delay also came after the film restarted shooting after halting production in March when the global coronavirus pandemic was quickly spreading around the world. Jurassic World: Dominion was just one of the many films that had to halt at the time.
The Future Of Film
Unfortunately, the coronavirus outbreak will continue to severely and detrimentally impact the U.S. movie industry, affecting movie ticket sales and consumer confidence levels when visiting cinemas in general. In addition to that, box office revenue will suffer as the number of movie releases falls due to slow or postponed movie production schedules. The industry is on the tip of the biggest shift in history. The business model is moving from third-party distribution and single-ticket sales towards owned distribution and recurring revenue. This is seen by investments in streaming services, where a single movie or TV series is rarely a profit driver; rather, recurring subscriptions and advertising revenue produce value.
As a result, film and media companies no longer optimize releases for fixed schedules, primetime TV times, or popular holiday weekends. Instead, the end goal is increased consumer engagement, thereby improving user retention and data on content popularity. The end result is an expansion of demand for exclusive content.
