In ten years when people look at bar graphs of annual box office revenue, they’re going to see an outlier in 2020. Cinemas began shutting down in mid-March due to COVID-19 and have largely remained closed ever since. There’ve been reports of smaller independent theaters and drive-ins reopening in the last couple of weeks, but with no revenue for over two months now, the domestic box office is expected to plummet at least 50 percent when compared to 2019.
That’s according to MoffettNathanson, a research company who recently published their findings. They project 2020 to see $5.5 billion in revenue when compared to 2019, which was $11.4 billion, representing a 52 percent drop. And this is a best case scenario, as these findings are based on major theater chains reopening in July, which is expected.
After all, major films like Mulan and Tenet have been sticking with their release dates, but if we see a second wave of the virus, expect to see even more delays of upcoming blockbusters.
“Given the uncertainty around the key questions we mention above, including sticking to July release dates, when key markets reopen and willingness of moviegoers to return before a vaccine, our estimates today are very much a work in process with lots of volatility in the months ahead,” says MoffettNathanson.
Of course, studios have sought other sources of revenue during the pandemic, like when Universal released Trolls World Tour straight-to-streaming. It’s been such a success, too, that Universal is now taking steps to release future movies straight to digital platforms. And according to MoffettNathanson, theater chains should be concerned that other studios will follow in their footsteps, as such a major shift in film distribution would affect them greatly moving forward.
“In the past, exhibitors have been able to stand their ground; however, we again think this time is different in that all of the major studios (including now Disney for certain movies) are likely to be more aggressive with windowing strategies. As long as multiple studios push forward with PVOD 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.”
AMC nearly filed for bankruptcy and they’re the largest theater chain in the world, which should tell you all you need to know about the kind of threat this pandemic poses to cinemas. The numbers never lie and according to them, theaters should brace for an even bigger drop in box office numbers than the optimistic 50 percent projection.