As the coronavirus ripples through every sector of public life, Hollywood must determine in real time how to deal with a crisis that seems to worsen by the hour. Movie theaters across the world have shuttered, including hundreds of venues operated by AMC, Regal and Cinemark, the United States’ three largest chains. Blockbusters like “A Quiet Place Part II,” “Mulan,” “No Time to Die,” “Furious 9” and “Black Widow” — all of which staged hefty marketing campaigns worth millions — have been delayed. Other projects still in production (the long list includes “The Batman,” the “Avatar” sequels and Baz Luhrmann’s Elvis Presley biopic) are suspended indefinitely.
If the COVID-19 pandemic lasts through May, the global box office could face an estimated $20 billion loss. If it’s longer, who knows what might result. Regional economies will be affected, too, as film operations pump money into local businesses and employ freelance crew members who are now out of work.
Meanwhile, scores of people stuck at home are relying on digital platforms for entertainment, giving studios an opportunity to recoup some funds by making nimble, unprecedented decisions to use streaming outlets (Netflix, Hulu, etc.) and video-on-demand services (iTunes, Amazon Prime Video and cable systems like Comcast and Cox) to showcase movies that can no longer play in theaters.
Disney, for one, capitalized on the situation by releasing “Frozen II” on Disney+ months ahead of schedule. Paramount Pictures is cutting a deal to give Netflix “The Lovebirds,” a murder-mystery comedy starring Issa Rae and Kumail Nanjiani that was supposed to open April 3.
Universal Pictures and its art-house subsidiary, Focus Features, elected to make three current releases — horror smash “The Invisible Man,” controversial political satire “The Hunt” and the Jane Austen adaptation “Emma” — available to rent on VOD for $19.99, approximately twice the average cost of a ticket. (Movies like these typically get a 90-day window for theatrical exclusivity.) Universal will also give the animated sequel “Trolls World Tour” a VOD premiere on April 10, the same day it was slated for theaters. There’s no word yet on whether the studio will follow suit with summer offerings, such as “Candyman” and Judd Apatow’s “The King of Staten Island,” should self-quarantine practices continue.
So far, the strategy seems effective. “The Invisible Man,” “The Hunt” and “Emma” hit VOD on Friday, and by midafternoon all three had appeared on the iTunes charts.
What remains to be seen is how much studios will profit from this refurbished VOD model and whether it will influence any broader strategies once theaters reopen. The streaming revolution, which snowballed when Netflix began prioritizing original content in 2013, has provoked an existential reckoning about Hollywood’s economics, specifically how to best reach audiences now that ticket sales are slipping. The movies that don’t opt for digital distribution in the coming weeks will need to be redated, creating a backlog of competition that could disrupt traditional demarcations between the summer blockbuster deluge and awards season.
For directors and other creatives who still romanticize the collective moviegoing experience, a VOD exclusive means curtailing or altogether forfeiting the time their work can be seen on a big screen. Autumn de Wilde, the director of “Emma,” which opened Feb. 21 to strong grosses, found out about Universal’s plan not long before the news broke on March 16. She received calls from executives at Focus Features and the Universal-owned production company Working Title, at which point the decision had already been formalized. De Wilde designed her film’s sunny aesthetics for theaters, but fortunately she’d pored over cuts meant for home viewing to ensure their specs had been perfected, too.
“I felt very excited, knowing how hard it is to really have to keep people inside,” de Wilde said by phone last week. “I could do my part by having this movie that someone wants to watch, and it gives them two extra hours that they didn’t feel tempted to go outside. I want to be of service in any way I can.”
On Wednesday, the National Association of Theater Owners petitioned Congress for emergency relief funds to help compensate for losses and support the 150,000 theater employees who can’t work during the quarantine.
“I’m not excited about what’s happening to theaters or my friends or all those amazing PAs that are hand-to-mouth and don’t have a union protecting them,” de Wilde said. “I am worried about all of that and how people are going to pay their bills because I was a single mom and I had many, many lean years. But those movies I watched with my daughter cheered us up. ‘Bringing Up Baby’ cheered us up, ‘Pretty in Pink’ cheered us up, any Jennifer Aniston movie in Hawaii always cheered us up.”
Elsewhere, philosophies about how to move forward are changing by the minute. Paramount, for example, made the call to shelve “A Quiet Place Part II” only six days before its international rollout was set to begin. At that point, theaters hadn’t yet closed en masse.
“Pulling ‘A Quiet Place II’ was ballsy, in a way,” said David A. Gross, a Hollywood marketing veteran who runs the consultancy firm Franchise Entertainment Research. Gross estimated that Paramount had spent between $5 million and $10 million on promotions, but because it’s almost a guaranteed cash cow, there’s no need to fast-track it to VOD.
“That movie could do $150 to $200 million just domestically theatrically, and they’re not going to let that go,” Gross explained. “I’ve been part of the studio machinery. They don’t make a move without really researching it, and they have all kinds of metrics. And [Universal] must feel with ‘Trolls’ that it was somewhere in between: ‘Let’s go get the money on VOD. Let’s keep the whole thing rolling.’” (A Universal representative said “Trolls World Tour” directors Walt Dohrn and David P. Smith were not available to comment.)
Of course, those figures may change once the full effects of COVID-19 are understood. Some experts predict we’re already in a recession, and with other industries being gutted, many Americans will be left with less disposable income to spend on trips to the multiplex. But Hollywood has historically proved capable of weathering recessions. In 2010, after the 2008 downturn had ended, box-office sales rose by 5%.
In normal circumstances, an average 60% of a movie’s total revenue comes from worldwide theatrical grosses and 40% from home-entertainment mechanisms, e.g., DVD purchases and digital rentals, Gross said. As much as 80% of VOD revenue goes directly to the studio, according to The New York Times.
“Trolls” will now rely on VOD for its entire earnings. Luckily, there’s some precedent for lucrative about-faces: In 2014, when North Korea threatened terrorist attacks on theaters that screened Seth Rogen and Evan Goldberg’s Kim Jong-il satire “The Interview,” Sony released it online and racked up a reported $40 million in less than a month.
As always, modest films will inevitably struggle more than “A Quiet Place” or anything Disney has lined up. A source at A24 told me on March 13 that the well-regarded indie studio hadn’t yet made significant decisions about its immediate slate, which includes “Saint Maud” and “The Green Knight.” A24 had just released “First Cow,” Kelly Reichardt’s intimate masterpiece about two enterprising friends (John Magaro and Orion Lee) in 1820s Oregon. Less than a week later, A24 announced that “First Cow” would eschew an immediate VOD bow and instead be re-released later this year.
Similarly, Focus Features’ “Never Rarely Sometimes Always” — a quiet Sundance standout about a teenager (Sidney Flanigan) venturing from rural Pennsylvania to New York City to obtain an abortion — opened March 13, the weekend the country started taking the coronavirus seriously. A few days before that, director Eliza Hittman said Focus was debating whether to postpone the debut, but she was adamant that going digital wasn’t an option.
“It’s not a streaming movie,” she said, presumably referring to its heavy subject matter, which isn’t right for someone seeking background noise while tending to other tasks. When asked, a representative for Focus told me the company is not yet ready to announce whether the film will be re-released or what will happen to next month’s highly anticipated “Promising Young Woman.”
Another camp forced to make a quick call was the team behind “Bloodshot,” Sony’s Vin Diesel superhero vehicle, which collected a tepid $24.9 million worldwide on the same weekend that “Never Rarely Sometimes Always” and “The Hunt” opened. Sony will make “Bloodshot” available for digital purchase — but not rental, à la Universal — on March 24. The studio went a different route with “Peter Rabbit 2: The Runaway,” shifting the April 3 theatrical release to Aug. 7.
“Sony Pictures is firmly committed to theatrical exhibition and we support windowing,” Sony chairman Tom Rothman said in a press release. “This is a unique and exceedingly rare circumstance where theaters have been required to close nationwide for the greater good and ‘Bloodshot’ is abruptly unavailable in any medium. Audiences will now have the chance to own ‘Bloodshot’ right away and see it at home, where we are all spending more time. We are confident that — like other businesses hit hard by the virus — movie theaters will bounce back strongly, and we will be there to support them.”
Warner Bros. announced Monday that “Birds of Prey,” which came out Feb. 7 and grossed about $200 million worldwide, will be purchasable starting March 24. On Thursday, the studio added the Ben Affleck sports weepy “The Way Back” to that plan. The Wrap reported on Friday that Warner Bros. chairman Toby Emmerich was considering the same treatment for “Wonder Woman 1984,” but a representative at the studio told me WB would not forego theaters for such a major tentpole.
Lionsgate will push out the K.J. Apa faith-based drama “I Still Believe” on March 27, though the studio postponed a trio of horror titles — “Antebellum,” “Run” and the Chris Rock-led “Saw” installment “Spiral” — indefinitely.
“As filmmakers, we are heartbroken that we can’t share ‘I Still Believe’ on a big screen the way we intended,” co-directors Jon Erwin and Andrew Erwin said in a statement. “We make movies because we love movies and we stand firmly behind the nation’s theater chains, from the largest circuits to the smallest mom-and-pop indies that have been so dramatically affected by these unprecedented closures. But the safety of guests comes first, and we’re proud to have the opportunity to share online a movie whose inspiring message of love, hope and faith is perfect for these uncertain times.”
Films that already had late-winter and early-spring streaming exclusives lined up, on the other hand, are looking pretty fortuitous.
Hulu released the Pete Davidson coming-of-age flick “Big Time Adolescence” on March 13, one week ahead of schedule. Netflix, which established a $100 million relief fund, has a smattering of originals in the offing, including the touching documentary “Crip Camp: A Disability Revolution” and the character study “Uncorked,” starring Mamoudou Athie, Courtney B. Vance and Niecy Nash. Amazon Prime dropped the dark comedy “Blow the Man Down” on Friday and will maintain its scheduled May 15 premiere for the well-reviewed sci-fi thriller “The Vast of Night.” The eerie drama “The Other Lamb,” featuring Raffey Cassidy (“Tomorrowland,” “Vox Lux”) as a disciple belonging to an all-female cult, hits VOD services April 3, with more titles to follow throughout the month.
Whether or not Hollywood blueprints change once the pandemic passes, VOD won’t be a sustainable business model now that big-budget juggernauts routinely hope to earn $1 billion across the globe. For now, the National Association of Theater Owners is presenting an optimistic front, expecting commerce to return to normal.
“No one can precisely predict when public life will return to normal, but it will return,” the organization’s leadership said in a statement. “The social nature of human beings — the thing that exposes us to contagion, and that makes it so difficult to change behavior in response to pandemic threats — is also the thing that gives us confidence in the future. People will return to movie theaters because that is who people are. When they return they will rediscover a cutting edge, immersive entertainment experience that they have been forcefully reminded they cannot replicate at home. In the uncertain, difficult economy ahead, movie theaters will fill the role they always have in boom times and in recessions — the most popular, affordable entertainment available outside the home.”