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News Article

COVID-19 Breaks the Box Office

By Alejandro Salas | Tue, 04/28/2020 - 15:59

Movie fans will have to wait a few more months for blockbusters like Mulan and No Time to Die, the latest addition to the James Bond saga. However, the impact to film studies will be far greater than mere disappointment. “The box office is under attack economically in a way that the world has never seen and many will suffer significantly because of it,” said Eric Schiffer, CEO of Patriarch Organization and Chairman of Reputation Management Consultants, in an interview with CNBC.

COVID-19’s rampage forced theaters to close in accordance to social-distancing measures implemented by world governments. Only in Mexico, the fourth country with the most movie theaters in the world, 7,240 theaters have closed, most of them owned by market leaders Cinépolis and Cinemex. According to Fernando de Fuentes, President of the National Cinematographic Industry Chamber (CANACINE), 30 million ticket sales would be lost by the end of April due to confinement measures implemented by the government. Based on an average ticket price of MX$54.2 (US$2.23) of 2019, this would lead to losses of MX$1.63 billion (US$67 million). However, now that the country is on Phase 3 of the pandemic and confinement measures have been extended through May, ticket sales losses could be above MX$3 billion (US$123.64 billion). “The actual cost cannot be calculated still, but it is significant,” de Fuentes said in an interview with El Universal.

Theater closings have also impacted 50,000 direct and 150,000 indirect jobs only from the exhibition part of the industry, plus another 25,000 jobs related to film production, according to de Fuentes. To prevent massive layoffs and irreversible effects, CANACINE members have reached out to the government with suggestions on how to support the fil industry. Among the petitions are delays in tax declarations, labor tax waivers and employee benefits deductions, as well as credits at preferential interest rates. Furthermore, CANACINE has asked the government for tax incentives to ensure that once the crisis is over, more productions invest in Mexico to film in location.

COVID-19 only added weight to an already burdened industry that was facing challenges to match overwhelming results from previous years. “The gloom and doom talk for 2020 is based on the notion that there are not any obvious blockbusters on paper,” said Paul Dergarabedian, Senior Media Analyst at Comscore in an interview with CNBC. Following the release of titles like Star Wars: The Rise of Skywalker and Avengers: Endgame – the highest-grossing movie ever – there were no releases scheduled for 2020 that could match such numbers. Still, the pandemic only made things more complicated for studios. “This is like pouring lighter fluid on the fire,” said Richard Greenfield, Media Analyst at LightShed Partners in an interview with TIME.

Most titles scheduled for 2020 have already been moved for later in the year or even postponed to 2021. Mulan, one of Disney’s most promising releases of the year, moved its opening date from March 27 to July 24. From the Marvel Universe, Black Widow’s release was pushed back to November 6 from its original date on May 1. James Bond’s latest installment, No Time to Die, was pushed back a second time now to November 25. The movie had already been delayed once from its original release date in November 2019 after director Danny Boyle was replaced by Cary Fukunaga.

Delays are extending to 2021 releases with Doctor Strange in the Multiverse of Madness moving to March 25, 2022 from its original May 7, 2021 date and Warner Bros.’ The Batman being now scheduled for October 1, 2021. Similarly, production activities are now on hiatus until further notice. Disney announced on March 13 a production halt for all its live-action films including The Little Mermaid and Peter Pan. Paramount Pictures also announced a pause in production of the latest Mission: Impossible title. “Out of an abundance of caution for the safety and well-being of our cast and crew, and efforts of the local Venetian government to halt public gatherings in response to the threat of coronavirus, we are altering the production plan for our three-week shoot in Venice,” the company told The Hollywood Reporter.

In an effort to make up for lost theater visits, some studios are betting on streaming to gain back some revenue. Disney, for example, made Onward – its latest release – available on Disney+ on April 3, barely a month after its release in theaters. Universal Pictures implemented similar strategies with The Invisible Man and The Hunt. Both movies were already in theaters in March but the studio is already offering them via streaming through platforms like Comcast, Apple Amazon. Trolls World Tour’s release, originally scheduled for April 17, was moved ahead to April 10 and was be fully digital. “Universal Pictures has a broad and diverse range of movies with 2020 being no exception. Rather than delaying these films or releasing them into a challenged distribution landscape, we wanted to provide an option for people to view these titles in the home that is both accessible and affordable,” said Jeff Shell, CEO of NBCUniversal. Given that the normal timeframe to release a movie in digital platform was three months after its release, this could mark a potential shift in how the industry will operate in the future. 

Those most affected by the crisis, as in many other industries, are the little guys, in this case independent filmmakers. “A whole range of films that would have gotten screened and reviewed by critics this year and progressed through the international festival pipeline around the world, they’re simply not going to be able to,” said Bobette Buster, a professor of digital storytelling at Northeastern University. Just like many music festivals, film festivals have been cancelled or postponed indefinitely. This spells trouble for independent filmmakers that depend on these venues to get their message across. Buster puts the example of Parasite, a major blockbuster from 2019 that won four Oscars and the Palme d’Or at the Festival de Cannes. According to Buster, the film would not have enjoyed the same success if its release were to happen in 2020. “We would not have ever known of this film and there would not have been the knock-on effect of Parasite playing in all the major international film festivals and developing such huge word of mouth,” she says.

At the moment, the Festival de Cannes, originally scheduled for May 12 through May 23, remains cancelled. According to its official website, the festival was to be rescheduled for the end of June but that is no longer an option either. However, its organizers are aware of the importance of the festival for independent artists, which is why they have committed to making Festival de Cannes a reality “in a way or another.” “No one knows what the second half of the year may bring and whether it will be possible to organize major film events again in 2020, including the Festival de Cannes,” said Thierry Frémaux, General Delegate of the Festival. Therefore, organizers have decided to launch the Marché du Film Online initiative, “a standalone online market created to support the international film industry and help professionals,” according to the Festival de Cannes website. The Marché du Film Online is scheduled for Monday 22 through Friday 26 and will include virtual booths for sales agents, pavilions for institutions, online screenings and conferences. “We will not replace the Cannes experience with the Marché du Film Online but we are recreating part of its essence online by offering professionals an efficient and cutting-edge platform to screen films, buy them, finance projects and meet partners,” said Jérôme Paillard, Executive Director of the Marché du Film Online.

The data used in this article was sourced from:  
Milenio, El Universal, TIME, Northeastern University, Vanity Fair, Vox, The Hollywood Reporter, CNBC, The Motley Fool, Quartz, CNN, Festival de Cannes
Alejandro Salas Alejandro Salas Senior Editorial Manager