Next Thursday English cinemas reopen having been closed for the last month after reopening in July, the question is will exhibitors have learnt from how they reopened cinemas in July, or will they just continue doing what they did in July which saw less than 20% of regular cinemagoers return for 17 of the 18 weeks. The only exception was the week Tenet opened at the end of August but that was in part due to its opening inflated with two days of previews.
Data modeling was done by the scientists who informed the UK government about Coronavirus but failed to predict the speed of the virus spreading across the country. this is always the shock twist in disaster movies, think to have years to save the planet, but it’s only days
Surely the research government scientists should have done is watch Contagion, Rise of the Planet of the Apes, Outbreak, and all of Roland Emmerich disaster films to realize that Coronavirus was likely to spread across the world much faster than their data modeling forecasts?
Tuesday’s front pages had headlines COVID curbs to end by Easter, but these are a pipe dream as by loosening lockdown next week will be the third lockdown in January; while the government says they plan to get vaccines to the most vulnerable by April when has government projects met deadlines or targets? While the cinema industry is also pinning its hope to normality returning in April with UK cinemas hoping both No Time to Die and Peter Rabbit 2: The Runaway will open, but the problem is the key cinemagoing demographic will be the last to get the vaccine, and nothing will improve until then unless exhibitors finally realise, they need to go much further in making their customers feel safe,
The problem is western exhibitors tried to go from crisis to recovery within 4 months which had the predictable results of only cinephiles rushing back to the cinema, but the 85% majority didn’t in doing so caused long-term damage to the cinema.
In March as soon as cinemas shut the industry should have addressed this problem collectively but there was no plan and no strategy apart from Tenet. Exhibitors seemed to believe all they had to do was reopen cinemas in July add some token safety measures and people would come due to their ‘pent-up demand’. It has been the blind leading the blind since the first lockdown, as soon as Western cinemas shut in March all of 2020 films should have immediately gone TBC, was idiocy Warner kept Tenet and WW84 dated as made exhibitors reopen cinemas months too early with predictable results.
Had Western exhibitors waited 3 more months as China did and come up with a plan and a strategy that wasn’t based around one film (Tenet) but instead a slate of films as China did along with bringing in far stricter safety measures then cinema could now be on the recovery stage as is currently in China and Japan. By rushing the reopening it’s pushed back recovery till 2022 and growth not till 2023 if all studios are now looking at their slates as films that need a theatrical release and those that can go to streaming.
Last week IMAX CEO wrote an op-ed saying that audiences have already returned to the cinema, the key line is ‘where the virus was handled with real public health discipline, places like Japan, South Korea, China, and throughout Asia, audiences are safely and enthusiastically returning. These are countries with tech-savvy consumers who have raced back to theatres, eschewing the isolation of in-home entertainment to once again enjoy a shared big-screen experience.”
So, why have Western exhibitors handled Coronavirus so badly, could ask the same question about why Western governments weren’t able to follow in the footsteps of these countries in the way they handled the pandemic as these countries dealt with Coronavirus months before the West? Ever since I watched a documentary in February about how the Spanish Flu became a worldwide pandemic within 7 days traveling from on ships from the USA to France in November 1918 after soldiers got infected on the ships. These soldiers celebrated the end of the war in bars and crowded streets and Spanish Flu spread like wildfire. 102 years later Coronavirus took less than 24 hours to go global with people flying in from Wuhan.
This week over 50m Americans traveled by air to celebrate Thanksgiving with their extended families, while in the UK it has been announced that bubbles of three households can come together between December 23-27, but Coronavirus doesn’t take Thanksgiving or Christmas off and these family get-togethers are breeding grounds for Coronavirus and will see cases increase within two weeks of both holidays in the US and the UK and see the UK paying for it going in nationwide tier 3 aka Lockdown 3 in January.
Not putting all the blame on exhibitors as they only reopened cinemas in July because Warner and Christopher Nolan thought opening Tenet in the middle of a pandemic was a great idea, had they delay Tenet in March to next July exhibitors wouldn’t have rushed to reopen cinemas and they would have slowly reopened in September.
As soon as China closed cinemas in January, days before their most lucrative time of the year the rest of the world should have planned for the worst-case scenario, especially after COVID quickly spread across Asia, who were far better prepared for COVID than the rest of the world has dealt with SARS.
Right from the start in March the industry has been always reactive to issues rather than being proactive, waiting on governmental guidance before doing anything. Surely, they have seen as most how incompetent they are and seen how Coronavirus was affecting Asia and mainland Europe and put in plans in place for the UK. UKCA had a consequence at the start of March.
Would have hoped lessons will be learned by the industry will learn from the first lockdown and major exhibitors won’t rush to reopen on December 3, but of course, they won’t and again this is not helped by Warner’s decision to open WW84 and to open it a week earlier internationally. It made sense for Warner to open Tenet internationally early as his films perform stronger internationally, but the first Wonder Woman performed far stronger in the US than internationally so opening ahead of the US will do WW84 even more damage. Early tracking for WW84 in the US is for it to perform open in low teens and take about $50m, 10% of what the first film took in 2017, while globally likely to take about a quarter of $822m Wonder Woman took.
With WW84 released on HBO Max same time as in cinemas Deadline suggested cinemas charge only $1 for tickets and as this would bring people back to the cinema and then they will be more willing to buy their highly profitable concessions. Exhibitors always say they don’t make any money from cinema tickets so never made any sense to be their obsession with recliners as they lessen the capacity of each screen by at least a third. It also never made any sense for them to keep increasing ticket prices as most businesses would set their entry fee as low as possible to get as many through the door and then target their customers with the highly profitable items, why supermarkets sell petrol so low in the hope people buy petrol and then their shopping.
What made cinema hugely popular over the first 100 years was not it’s seating, but the content seen on a big screen with great sound and picture and it was a cheap night out, the cost of a pint of Guinness in the 30s to 60s and a Big Mac meal in the 70s to early 00s. The problem has always been when exhibitors faced adversity (the 1950s with the launch of TV, early 80s video, and now with streaming) they always tinkered with this formula and the results always saw a decline in attendance. Why do exhibitors always increase prices when they face competition from a rival rather than realise most are only going to these rival services because they are giving what customers want much cheaper?
Over the 18 weeks, English cinemas were open the one genre of films continually successful was children from films already on DVD and digital Onward and Trolls World Tour to Cats & Dogs 3: Paws United and Two By Two: Overboard that in normal circumstances have gone straight to digital.
The problem was there was no plan or strategy behind the reopening of cinemas, the industry should have had a “Global celebration of the cinema experience” campaign to get people back into the cinemagoing habit again, as part of the 125th anniversary of commercial cinema, (in December 1895 France, February 1896 in London and May 1896 in New York).
Similar campaigns in 1985 for British Film Year started the renaissance of cinemagoing in the UK and that was boosted in 1996 with National Cinema Day when all cinemas were £1 on June 2nd to celebrate the 100th anniversary of cinema. It was repeated the following year and was again successful but didn’t become an annual event as exhibitors and distributors couldn’t agree on a revenue split. National Cinema Day still happens in Ireland in August.
The problem with the cinema industry for the last decade or more as they believe they have been around for almost 100 years they don’t need to change, not learning anything from what happened to brick-and-mortar music and video stores as what happened to Our Price, Tower Records, HMV, and Blockbuster video could happen to cinemas if they don’t change and this could be speeded up due to COVID. as there are the cinephiles who will always go to the cinema, but they only make up about 20% of cinemagoers but cinema should be for the many, not the few, the problem has been since the reopening in July it has been exactly that just for the few.
As all the research over the last 6+ months said only 20% are currently comfortable returning to the cinema anytime soon and that hasn’t changed since (Morning Consult had a recent poll in the US and it’s still only about 22%) December is very different to July its cold, dark, dank, foggy, people are sniffly so won’t want to return to the cinema as much as they would in the summer especially just coming out of a lockdown.
This had been the problem with how cinema reopening the industry just thought all they had to do was reopen and people would return. while that was the case with cinephiles and Nolanites the major wasn’t coming back anytime soon. What was needed was a campaign to get people back into the cinemagoing habit with all tickets £5 and Meerkat Movies 7 days a week as what was important was not the box office but admissions to get as many feel confident to return to the cinema as soon as possible.
On Monday it was confirmed that English cinemas could reopen from December if the parts of the country were in tiers 1 and 2, this predictably caused outrage from the UKCA saying that it made no sense as the UKCA and its members have worked extraordinarily hard, in consultation with government to put wide-reaching safeguarding measures in place in all U.K. cinemas.” and “industry survey 93% of returning cinemagoers say they had felt safe during visit”.
This sounds very impressive but not so much when for most of the 18 weeks UK cinemas were reopened admissions was 10% of normal levels and the majority going back are cinephiles. While the issue with cinema since reopening in July has been about confidence and getting the message out that a trip to the cinema is a far lower risk than other hospitality sectors. The problem has been the industry failed to do this and LoveCinema campaign didn’t help as was aimed at the cinephiles who had already returned as it launched over 6 weeks after cinemas had reopened.
UKCA also compared cinemas to gyms “cinemas provide vital support for good mental health currently, much in the way that gymnasiums, do for physical health. But unlike gyms, cinemas can deliver an experience where people are sat socially distanced for much of their visit in strongly air-conditioned theatres, all the while wearing face coverings.” Don’t think anyone else would think sitting in a dark room with a gallon tub of popcorn and coke can possibly be seen as comparable to being in a gym.
Ever since March the UKCA has always been reactive to Coronavirus always waiting on government guidance before making any changes, but as soon as China shut its cinemas in January days before their most lucrative time of the year for cinema the rest of the world should have taken notice and planned for worse case scenarios. I’m not saying this in hindsight 9 months later I said the exact same back in February but was just told that I didn’t know what I was talking about.
Warner Bros needs to take some responsibility for the cinema reopening fiasco as if they had just delayed Tenet in March major exhibitors wouldn’t have rushed to reopen cinemas in July. After the soft performance of Tenet, Warner should have immediately delayed Wonder Woman: 1984 from December instead it was left isolated in December after Disney was predictable delayed Free Guy and Death on the Nile. While Tenet could have possibly been the saviour industry believed it would be there is no way WW84 will be without other films opening alongside it.
Over the last month there were rumours HBO Max were going to have a big film on Christmas Day most believed it would be either Tom and Jerry or Mortal Kombat, but then last week they released the first trailer of Tom and Jerry (still dated for March) and announced Wonder Woman 1984 would be released in cinemas and on HBO Max on Christmas Day and internationally in cinemas only on December 16th.
With Coronavirus cases dramatically increasing in the US, (up 170%+ in 3 weeks) and with Thanksgiving on Thursday’s cases will likely more than double over the next few weeks, so by Christmas could be 800k+ daily cases. 65% of BO is a lot if you’re comparing it with 2017’s Wonder Woman BO but it’s more likely to perform like Tenet taking $60m+ and $250m+ WW as also must deal with the fact as it’s being released internationally (including China) week early will be many illegal streams online.
The move into PVOD feels similar to their rush to Digital Cinema a decade ago with a similar decade of discussions on both sides but then they did it and didn’t think of the long-term consequences. With Digital Cinema it was the technology with cinemas installing 2K with 4K and 8K on the horizon. While with PVOD studios announced plans for it in 2011 and every time afterward until July this year they were rejected by exhibitors who said they wouldn’t book any film that was to be released via PVOD.
What many people seem to forget is it was Disney that started the battle with exhibitors to the shortened theatrical window in February 2010 with Alice In Wonderland. Disney wanted to release the film on DVD after three months instead of the normal 17 weeks, which saw Odeon ban the film from their cinemas despite holding the Royal Premiere at the Odeon Leicester Square.
Hours before the premiere was to be held Odeon ended their boycott coming to an agreement with a 13-week window.
Bob Chapek said: “We feel that it’s important for us to maintain a healthy business on the exhibition side and a healthy business on the home video side. We think this is in the best interest of theatre owners because a healthy movie business is good for them and allows us to invest in high-quality, innovative content.”
Disney had also tried to shorten the theatrical window for Up but backed down when cinemas said that they would ban Up and A Christmas Carol.
The relationship between exhibitors and studios has been on the knife-edge for the last decade ever since Universal Pictures announced plans to release Tower Heist in 2011 on PVOD for $59.99, but after Cinemark and National, Amusements announced they would boycott the film ending Universal Pictures plans.
At the time Universal Pictures said, “Universal continues to believe that the theatre experience and a PVOD window are business models that can coincide and thrive, and we look forward to working with our partners in exhibition to find a way to experiment in this area in the future,”
In March 2011 were PVOD plans by Warner Bros, Sony, Universal, and 20th Century Fox but the problem is that to get PVOD full operational all studios to need to be part of it and Disney has always distanced themselves from PVOD. Warner Bros planned to launch their service with Unknown, and Sony Pictures’ first film was to be Just Go with It.
Lines were drawn exhibitors Vs Universal Pictures and dropped their plans. In 2015 Paramount Pictures announced plans to release Scouts Guide to the Zombie Apocalypse and films Paranormal Activity: The Ghost Dimension on VOD within weeks of their theatrical release, again angered exhibitors who banned both from cinemas.
At CinemaCon in 2017, there were two opposing PVOD services, including Sean Parker’s The Screening Room backed by Peter Jackson and J.J. Abrams, and AMC had signed a letter of intent to do business.
While in 2017 Universal Pictures Warner Bros and 20th Century Fox were planning to launch PVOD service in early 2018 (with films including Pitch Perfect 3 and Fox’s The Greatest Showman) Comcast, Apple, and Amazon were developing the delivery systems. This would have been 30-45 days after opening cinemas with customers paying $30.
At the time insiders said, “Everyone wants to work the cinemas, but in the end, most of the studios will move ahead with PVOD,” and “I’ve never seen anything so complicated in terms of getting this boulder up the mountain.”
Some studios had previously wanted PVOD after 17 days with a $50 price in 2016. In 2016 Regal and Cinemark weren’t entirely against PVOD and Warner Bros. CEO Kevin Tsujihara said “We’re having very constructive conversations with the exhibitors for the first time that we’ve had in a long time,” and “We are working with them to create a new window.” At the time exhibitors wanted studios to guarantee they wouldn’t try to shorten the existing home entertainment window for the next five to 10 years.
This PVOD service fell apart as soon after Disney announced plans to acquire 20th Century Fox. Disney was the one studio not interested in early VOD as they said they didn’t want to jeopardize its blockbusters. This was despite their films performing similar to other studios at the box office taking 90%+ of their box office within the first four weeks.
A studio executive said at the time “No one will come out of the gate unless the majority of the industry is involved,” says one studio executive. “There is safety in numbers.”… The studios will want protection if they are unable to convince cinema owners to go along with their plan. The two sides have been talking in earnest for months, but now, studios appear willing to go ahead and try PVOD even if exhibitors don’t come on board and if exhibitors decide to boycott every PVOD title, it could get tricky,”
In March Universal Pictures announced they would release Trolls World Tour on PVOD in April due to cinemas being closed this saw AMC and Regal immediately ban all Universal Pictures upcoming films and said they wouldn’t book any film that has a shortened theatrical window. But then in July Universal Pictures signed a multi-year with AMC Theatres to release smaller films on PVOD after 17 days, Universal signed a similar deal with Cinemark last month 17 days for smaller films and for films that open with $50m+ a 31-day window. (most films take about 90% of their box office within their first 28 days). Both AMC and Cinemark get a cut of PVOD revenues.
Studios should have negotiated as one with exhibitors as the problem will be each studio will have its own unique deal with exhibitors and independent studios and exhibitors will suffer as they won’t be able to have similar deals.
Last month Disney announced a reorganization of the company and a focus on Disney+ which could see many more theatrical made films go straight to Disney+ without a theatrical release as was the case with Hamilton, Artemis Fowl, The One and Only Ivan and Soul. Disney are expected to announce their plans on December 10th but while there are rumors that some of their upcoming reimaginations going to Disney+ it’s unlikely their key properties Marvel, Star Wars, Avatar, and Indiana Jones would go straight to Disney+. Disney and other studios are likely to be negotiating their own separate PVOD deals with exhibitors.
Over the last 6 months, there has been a lot of hostility from exhibitors to studios due to their belief studios were shifting their priorities from theatrical to streaming, but this was predictably completely unjustified as studios just understood more than exhibitors the majority (80%+) didn’t feel comfortable going to cinemas anytime soon. Of the 79 films that have been currently delayed for release this year (originally dated from mid-March to December 2020), only 14 have gone PVOD/streaming. (The Lovebirds, Greyhound, Antebellum, Mulan, Trolls World Tour, Artemis Fowl, The One and Only Ivan, Soul, The Trial of the Chicago 7, The King of Staten Island, Irresistible, Enola Holmes, An American Pickle, and The Witches).
Many of these films went to PVOD/streaming for other reasons than Coronavirus, Artemis Fowl and The One and Only Ivan would have probably gone to Disney+, Greyhound was delayed 18 months and Apple offered Sony $70m to acquire rights, The Trial of the Chicago 7 went to Netflix more because these kinds of films struggle to find an audience in cinemas and Enola Holmes and An American Pickle were acquired by streaming companies before lockdown.
“The audience needs to know that they aren’t putting themselves or their families in any danger by going to see a film at a cinema, so that’s something that needs to be addressed by the industry collectively.” In March as soon as cinemas shut all films should have been undated and exhibitors and studios should have put their differences aside and worked together with their relaunch plans, as for both to be successful they need each other as PVOD won’t replace cinema.
The industry should have addressed this problem collectively but there was no plan and no strategy apart from Tenet. Exhibitors seemed to believe all they had to do was reopen cinemas in July add some token safety measures and people would come due to the ‘pent-up demand’. While cinephiles and Nolanites came back (they would have kept going to the cinema had they never closed), the 80%+ majority stayed away and won’t return until at least March 2021 unless the industry goes much further, and most people knew this was going to be the case as even industry research showed it would be 6+ months before majority returned to the cinema; recent Morning Consult survey said 25% of Americans feel comfortable going to the cinema now. China and Japan are examples of what could have been had exhibitors took the long-term view of the reopening of cinemas and are now reaping the benefits while the West won’t get back to pre-lockdown levels before 2022.
The industry needs to realize that going to the cinema for the majority (90%+) is very low on the list of priorities and this won’t change for the next 6 months or more unless exhibitors go much further with their safety measures. This has been the case since they reopened in July, but western exhibitors only thought short-term compared to China and Japan which understood they needed to make customers feel safe about going back to the cinema again, bringing in much stricter safety measures when they reopened. It wasn’t just all we need to do is reopen cinemas again and people will come due to their pent-up demand as most are perfectly happy to watch these films on their tablets.
WW84 needs to be delayed to June 4th as COVID cases have doubled in the US over the last 10 days and are expected to double again over the following 10 days, then have Thanksgiving which will see cases double again.
Blumhouse body-switch horror Freaky opened on Friday the 13th in the US receiving positive reviews in normal circumstances it would have opened similar to 2017’s Happy Death Day ($26.03m taking $69.8m) but instead opened with $3.71m 15% of its box office. The one positive for Freaky is that it will be released on PVOD after 17 days but as with all the other films that have opened since July, they have taken a fraction of what they should have taken and could have taken.
Except for Freaky and Croods 2 all the other films Universal have given a theatrical release had very limited BO potential with the two that did Marry Me being delayed to May and 355 to January 2022, these are a way for the studio to test out 17-day PVOD release without spooking out AMC
Universal Pictures announced plans to release Tom Hanks film News of the World directed by Paul Greengrass via Netflix internationally with a theatrical release in the US on Christmas Day and then will be released on VOD 17 days later. This is similar to the deals New Line did with Netflix a few years ago with Shaft and Isn’t It Romantic being released internationally and Netflix but theatrically released in the US.
Despite owning Sky with almost 24m subscribers in 5 countries Universal opt to sell News of the World to their biggest rival as they know it will be accessible to far more viewers worldwide as seen recently with The Trial of the Chicago 7 and the TV mini-series The Queen’s Gambit, Netflix recently reported The Queen’s Gambit was watched by over 62m over the last month.
Netflix count a view as a subscriber that has viewed more than 2 minutes, many questions this but cinemas will add the ticket sale to the film’s box office having no idea if the person watched any of the films. Likewise, TV and radio ratings are calculated using an algorithm from a group of about 2,000 households, as seen with the exam fiasco and the data modeling with Coronavirus algorithms don’t always predict the correct data.