Yesterday, we reported that Universal was overriding its typical three-month release window to make new releases likeThe Invisible Man,The Hunt, andEmma, and the upcomingTrolls: World Touravailable as a premium VOD rental as early as this weekend. Universal has wanted this for a long time going all theway back to 2011’sTower Heist, and now there’s a real-world emergency that finally gives them the cover to make this move. That’s not to say it’s a bad or callous business decision, but coronavirus does give the studio (and other studios) the cover for a paradigm shift to the business where exhibition chains like Regal and AMC, which are currently shutting down, can’t push back because it’s not like they could show movies right now anyway.
Theatrical distribution has been an endangered species for over a decade now. They used to have a fairly comfortable business model where a movie would run in theaters for weeks on end, and the longer a movie ran in theaters, the more profit a theater would make in addition to what they earned from their primary source of income, concession sales and pre-show advertising. But then the business model changed to where all that mattered was opening weekend box office, and theaters didn’t really see much of that cut. Then studios kept pushing to shorten the theatrical window because a movie that’s not available for home release is revenue that a studio isn’t seeing. Theatrical distribution then took another blow with the rise of streamers like Netflix andmajor chains flat-out refused to show titles likeThe Irishman, whichpushed Netflix to pursue buying its own theaters. Additionally,the end of Paramount Consent Decrees, which prevented studios from buying theaters, means that chains will now lose out to studios like Disney just owning their own property and showing their own blockbusters.
When you add up all these attacks, using coronavirus to shorten release windows looks like the final nail in the coffin for theatrical distributors that had no idea how to cope with a changing cinematic landscape. There have been exceptions like Alamo Drafthouse, which has managed to expand during this era by making a love of moviegoers and movies their brand. Meanwhile, major chains have flirted withbad ideas like encouraging moviegoers to use their cell phones, which only makes the theatrical experience worse. Theaters, unwilling to change their behavior, have pushed back against change rather than working to find ways to make the theatrical experience more enticing.
Even when they did change, it didn’t come from the industry. MoviePass imploded, but it disrupted the way chains showed movies. The notion of a subscription service didn’t originate with Regal, AMC, or Cinemark. It came from this insane upstart trying to undercut ticket buying and proving that people would come to the theater more often if they could do it under a subscription service. And it’s great that subscription service now exists, but it may be too little, too late for an industry that has consistently shown a reluctance to change and adapt.
Here I’ll admit that while I love watching movies in theaters, I live in a bubble. Here’s my bubble: I go to see a new release movie early, usually on the Tuesday night before it opens. I have reserved seating. I get to stroll right in because I’m press, so I don’t have to wait in line and I don’t have to pay anything. Then security comes in and tells everyone that if they catch you using a cell phone, they’ll kick you out of the theater. While this doesn’t prevent all bad behavior like people talking, it makes the experience as smooth as possible.
Now let’s compare that to what the average consumer has to go through: they have to pay about $10 (national average is $9.74) per ticket. If they’re with kids, those kids are going to want snacks, and the snacks have an exorbitant markup, so tack on another $40. Then you go into the theater where you’re treated to a barrage of pre-show ads. Then the trailers start and that’s another 20 minutes. Then the movie proper finally starts and inevitably there will be some jerk on their cell phone or treating the movie theater like their living room. Additionally, maybe the film isn’t being properly projected because major chains don’t value in-focus viewing orscreen masking. So you’ve paid probably around $60 to have a sub-par experience. If a movie studio is offering you the opportunity to stay home and just rent the film for $20, doesn’t that seem like the more appealing option?
It didn’t have to be this way, but theatrical distribution created a set of circumstances where they took the audience for granted, and now studios are going to take that audience elsewhere. Coronavirus is going to create a set of circumstances where audiences get used to watching major new releases at home. At this point, it’s really just a question of how big the blockbuster will be. It should be noted that Universal opted not to makeF9part of their home viewing offerings,but instead punted the title to April 2021.
Here’s the outcome as I see it: With coronavirus stretching on for months on end, major chains like AMC and Regal will be forced to close various locations permanently. Major studios will then seek to purchase those locations. With the death of the Paramount Decrees, these former multiplexes will now belong to Disney, Universal, etc. They will then use these hubs as ways to show only their blockbusters and, if we’re lucky, the extra screen space to show repertory titles (I would not be mad if a Universal theater had screens showingJawsandJurassic Parkon the regular).
However, when it comes to midrange movies or movies made cheaply likeThe Invisible ManorThe Hunt, studios may see that this as their opportunity to compete with Netflix and just release these titles straight to VOD whether it’s for a premium rental or as content for streaming services like Disney+ or Peacock. Studios aren’t going to stop making movies and they’re not only going to make blockbusters since a diverse portfolio of titles appeals to both a wider audience and to a larger subset of content creators who may not be interested in helming $200 million VFX extravaganzas.
Studios are following the audience, and the audience wants to stay home. I personally don’t like that, but I can also admit A) my privilege, and B) that major theatrical chains have failed to properly adapt to writing that has been on the wall for most of the 21st century. Chains like AMC and Regal held their breath and refused to change and now the world is changing around them. I can see certain chains like Alamo surviving because they’ve worked hard at perfecting their brand and encouraging a premium theatergoing experience, but too many other chains behaved like junk food depositories that happen to show movies.
As for what kinds of movies this yields, I’m not sure about that. Maybe studios churn out crap likeSpenser Confidentialwhere you can be on your phone while Mark Wahlberg cracks wise and beats up bad guys. Maybe there are still prestige pictures likeThe IrishmanandMarriage Story. Studios are now going to be chasing Netflix, and while Netflix only really puts out quality movies at the end of the year for Oscar consideration, perhaps studios will force streamers to up their game if they have to compete with strong pictures likeThe Invisible ManandEmma.
But we should all be prepared for moviegoing to look very different a year from now. Coronavirus is the catalyst for a change in the industry that has been a long time coming, and now that change is finally here whether we like it or not.
