How 2020 changed the film industry forever

Hollywood studios used the pandemic to follow the advice of former Chicago Mayor Rahm Emanuel: “You never want a serious crisis to go to waste.”

For decades, the film industry has remained frustratingly resistant to change. Movie theater owners have stood firm on the limits of a traditional movie release. Until this year, a studio’s most recent blockbuster had to be shown in theaters for 90 days before its launch in home entertainment. The conventional wisdom of the movie exhibitor: people would not pay to see the latest Marvel movie in theaters if they could wait a few weeks to watch it on demand at home. He has fostered an often openly contentious relationship with the studios, which have long tried to shorten the three-month deadline in an effort to reduce marketing costs.

The rise of streaming services, which gave customers the ability to watch hundreds and hundreds of titles at the click of a button, put even more pressure on the theater’s iron showcase. Cracks started to appear. Still, theater operators pushed to prolong conversations that had the potential to change their business model as long as possible, so that they could continue to enjoy the long period of exclusivity on the big screen until they had no choice but to give in to market forces.

So the pandemic changed everything – as the massive events that rock the world tend to do. Theaters were forced to close and exhibitors were left without a prescription for months. The studios tore up their release schedules, postponing some films to next year and sending others to streaming services or digital rental platforms. Developments that were unthinkable a year ago started to develop at incredible rates. When cinemas were able to reopen, theater operators quickly learned that their bargaining power had dramatically decreased. If they wanted to present “The Croods: A New Age” or “Wonder Woman 1984”, exhibitors had to accept that these titles would be available online before normal. The deal was completely changed.

“Without the pandemic, you would not have seen movie theater windows collapse the way they did,” said Lisa Bunnell, president of distribution for Focus Features. “Whether you like it or not, the pandemic forced us to try things that would be more difficult to do in normal times.”

For traditional studios, it resulted in a 3D chess game with action that rivals “Game of Thrones” in terms of pure spinning chaos. Old alliances collapsed, new alliances were forged with old rivals, battles fought via a press release. In a matter of months, Universal went from enemy of cinemas to savior of the theater. Not to be outdone, Warner Bros. positioned himself as a villain who could rival almost any on-screen villain when the studio announced that his entire 2021 project would debut simultaneously on HBO Max and in theaters. This was after theaters became discouraged praising the company as its white knight for deciding to open Christopher Nolan’s spy epic “Tenet” on the big screen over the summer. Tyrion Lannister would struggle to make sense of these power games, maneuvers and strategic setbacks.

Industry experts agree that, at least to some extent, the changes that are shaking the film industry will survive the pandemic.

“Many of the innovations we’ve seen will continue,” predicts Jeff Bock, box-office analyst at Exhibitor Relations. “When we look at 2020, we will see that it is not a restart. It is a reconstruction of the theatrical model. “

It remains to be seen how the contours of the new world of film distribution are fixed. Studio and movie theater owners recognize that the 90-day clean and tidy window no longer exists. Instead of a one-size-fits-all model, many believe that studio to studio or even film to film can be determined. This means that “Fast and Furious”, “F9”, can be shown exclusively in cinemas for longer than Tom Hanks’ science fiction drama “Bios”, although both are from Universal Pictures.

“The conversation is more than open at this point,” says Shawn Robbins, chief analyst at BoxOffice.com. “I don’t think the extreme examples are going to last. I don’t necessarily see great films happening on a daily basis very often, ”he adds, referring to the hybrid release of“ Wonder Woman 1984 ”. “There will be a middle ground.”

Universal began testing this after entering into historic deals with AMC, Cinemark and Cineplex to allow the studio to place new films on demand weeks after their film debut. Universal is expected to strike a similar deal with Regal, the second largest circuit in the United States. In return, exhibitors are receiving a share of the digital profits. Universal argues that its business is more financially viable for the studio in the long run because it requires a transaction for each individual title, in contrast to subscription services that offer thousands of programs for a monthly price.

“We feel that our business model is the most sustainable,” said Peter Levinsohn, Universal’s vice president and distribution director, who led negotiations on deals with AMC, Cinemark and Cineplex. “It works for both sides. This creates a stronger ecosystem. “

The problem is that these companies are struggling with time. AMC is teetering on the brink of bankruptcy. He sold shares and renegotiated with creditors to try to improve his liquidity, but debt is an unpleasant thing. At some point, it needs to be repaid. Cinemark and Cineworld, owner of Regal, are also highly leveraged. And these are the giants of the exhibition, who have a strong relationship with banks. Many independent theaters, which do not have access to major creditors, will not be able to find a lifeline to survive the worst of the pandemic.

At the same time, leading media companies have made it clear that they consider the Netflix challenge to be their greatest imperative. Disney devoted nearly a full four-hour investor day to publicizing its plans to arm Disney Plus, Hulu and its other subscription offerings, while also reorganizing its executive hierarchy to focus better on streaming. Meanwhile, WarnerMedia and Comcast are investing hundreds of millions of dollars in adding programming for HBO Max and Peacock, respectively, and Viacom is preparing Paramount Plus, the renamed CBS All Access streaming service, for its close-up. Continuing wars promise to grow more intensely in the coming weeks and months.

As for the filmmakers, they seem to be pivoting for the new platforms relatively easily. Netflix introduced new films by names like David Fincher (“Mank”), Spike Lee (“Da Five Bloods”), George Clooney (“The Midnight Sky”) and Aaron Sorkin (“The Trial of the Chicago 7”) in 2020 and has a good chance of converting at least one of these spectacular projects into an Oscar winner. And Apple, Amazon and Hulu reacted with new films by authors and celebrities like Sofia Coppola (“On the Rocks”), Sacha Baron Cohen (“Borat Subsequent Moviefilm”) and Lee Daniels (the next “The United States vs. Billie Holiday” Some of these films were initially set up in traditional studios before the pandemic interrupted theatrical release plans and resulted in a big sale.

“They have a checkbook and an aesthetic,” Fincher said of Netflix during an interview this fall. “They are working with the people they want to work with. I respect this. “

However, even as Fincher envisaged the emergence of a different type of studio system, built around streamers, he warned of the dangers of a new status quo. “I hope it doesn’t look like a club,” he said. “I hope it doesn’t look like there is an Amazon type filmmaker, a Netflix type filmmaker and an Apple type filmmaker. This seems to subdivide in a twee way. “

Despite the convenience and comfort of watching at home, Hollywood studios are not resigned to the collapse of the theater industry. Talk to any film executive and they will make sure that people are more than eager to get back to normal life.

“We’ve all heard the analogy that the booming twenties followed [the 1918] pandemic, ”says Tom Rothman, president of Sony Pictures. “This seems instinctively correct. There is a huge desire to leave home and our screens and experience life with other people. “

It is clear that the return to any kind of normality – and with that, going to the regular cinema – depends on a widely distributed COVID-19 vaccine. Most public health experts believe that this milestone will not be reached until late spring or early summer.

Harman Moseley, the owner of St. Louis Cinemas, a small chain in the Midwest, has already been burned by turning on his tent lights before the pandemic has passed.

“I will not reopen until I am confident that we can attract crowds that will offer us the possibility of economic viability,” says Moseley. “I was open for two months [in the summer]. My payroll was more than my gross. If my rent was due, I would be broke. “

It is also undeniable that theaters will need to evolve and recalibrate to bring people back to their auditoriums. The public spent the past year watching movies on their sofa for the same price as a single film sketch. A subscription to HBO Max costs $ 15 a month. Movie tickets in New York and Los Angeles cost $ 20 a unit.

“I live in fear of showing a little trouble getting back to the status quo,” says Chris Aronson, president of domestic distribution at Paramount. “I believe that people will want to leave home and resume a normal lifestyle, but it is very short-sighted to think that this is all that needs to be done. Movie theater owners need to look at every facet of their business, as if we are looking at every facet of ours. “

Ted Rogers, the film programmer at Ragtag Cinema, an independent non-profit cinema in Columbia, Missouri, agrees with Aronson. He understands that showing the next “Jurassic World” sequence will not be enough to keep the cash registers working. He will also have to find ways to strengthen the bond between his clients and the cinema he operates.