The coronavirus will slash box office revenues in half this year, and the pandemic is now poised to weaken the longtime status of movie theaters as destinations for first-run movies, according to an influential media analyst.
Revenue from ticket sales will plunge to $5.5 billion this year, down more than 50 percent from $11.4 billion in 2019, MoffettNathanson analyst Michael Nathanson predicted on Tuesday. The drop could get steeper if theaters don’t reopen in July and if summer blockbusters like Warner Bros.’ “Tenet,” set to debut July 17, or Disney’s “Mulan,” scheduled for July 24, get pushed back to later in the year.
The analyst predicted “a significant bounceback” in 2021 to $9.7 billion in ticket sales, partly because a better-looking crop of movies is slated for release next year. But he also noted that movie theaters can’t count on their exclusive 90-day window for new releases to remain intact.
The pandemic has not only kept movie theaters closed since March, but also pushed studios to bypass the the theatrical window, which gave movie theaters a 90-day period to exclusively show new releases. In recent weeks, Universal Pictures released “Trolls World Tour” directly to video-streaming services instead of delaying it for when cinemas reopen.
The kids’ flick sequel reportedly generated more than $100 million in home rentals during its first three weeks — more than the original “Trolls” movie reaped in a five-month theatrical release.
“This unprecedented time, as movie theaters around the world have been closed, has led to headline-making experiments in studio windowing,” Nathanson said. “Before the shutdowns, these tests would have been met with strenuous push backs and likely blackouts by exhibitors.”
Post-pandemic, Nathanson expects studios to narrow the window, and in some cases, bypass them altogether as streaming services like Netflix, HBO Max, Disney+ and Amazon Prime Video, have gained in importance.
“As long as multiple studios push forward with premium video on demand or some other form of window changes, the balance of power in favor of studios shifts even more in their favor and reduces the leverage the exhibitors have as they would be unlikely to boycott multiple studios’ upcoming releases,” he wrote.
In the meantime, Nathanson said it will be difficult for the Hollywood studios behind big-budget flicks to move forward with summer release dates if major markets like New York, San Francisco and Los Angeles, which have yet to set a reopening date, aren’t ready to open.
“Given the uncertainty around the key questions we mention above, including sticking to July release dates, when key markets reopen and willingness of movie-goers to return before a vaccine, our estimates today are very much a work in process with lots of volatility in the months ahead,” the analyst said.