A view outside cinemas of cinemas 1, 2 and 3 during the coronavirus pandemic on May 18, 2020 in New York City. COVID-19 has spread to most countries around the world, claiming more than 320,000 lives with more than 4.8 million infections reported. (Photo by Noam Galai / Getty Images)
Noam Galai
While some sectors introduced the third quarter as the beginning of a spate of financial destruction wrecked by the coronavirus pandemic, the prospect is still very costly for American movie theater companies.
In recent days, all major cinema chains have published quarterly results showing record losses, as almost 100% of turnover was eliminated when auditoriums were empty for months. With Covid-19 cases still on the rise in the U.S., state officials are unlikely to encourage citizens to wait out for a movie night. Meanwhile, studios are making the difficult decision to release movies immediately upon video-on-demand in the US, after having hit release dates several times.
“If the U.S. government had taken this seriously when the shutdown began, and mapped out a comprehensive action plan, we would all be sitting in our favorite theaters right now, watching Hollywood blockbusters in their normal habitat,” Jeff Bock, senior analyst at Exhibitor Relations, said.
“Now, because of the lack of leadership, theaters across America are on the verge of bankruptcy with no real film savior in sight,” he said.
As of Friday, U.S. Covid-19 cases numbered more than 4.88 million with at least 160,111 deaths. The US accounts for one quarter of the total cases of worldwide coronavirus and more than one-fifth of the deaths. In the past week, the country has averaged more than 50,000 new cases per day, according to a CNBC analysis of data compiled by Johns Hopkins University.
Instead of insisting on reopening the economy, states are pushing for restrictions.
When the US first shut down in March, shutting down non-essential businesses, there was an expectation that the country could return to something seemingly normal after a few months. In places like France, the United Kingdom, South Korea and Germany it has become a reality.
A willing audience
Nearly half of the world’s cinemas are now reopening in some capacity, according to data from Gower Street Analytics, a UK-based company that has a partnership with Comscore. It says nearly 12,400 theaters are open, with more than 90% of those outside the US
The good news for theater operators is that there is an audience hungry to see new movies.
Adam Aron, CEO of AMC, said Thursday on a call from a merit conference that the presence has been light at open cinemas, as older catalog films are shown, but enthusiasm and ticket sales are spiked when new films are released.
AMC operates approximately 8,200 monitors in the US and more than 2,900 internationally. Aron said more than a third of its theaters in Europe and the Middle East are already open and the rest should resume operations within two weeks.
Quite simply, content drives filmmaking, and in the international market there are some great examples of films that have found windows of opportunity and advantage with enthusiastic audiences being lured to theaters by these high profile new films
Paul Dergarabedian
Senior Media Analyst, Comscore
One of the new films that does solid business for the cinematic chain is a sequel to the popular Spanish-language film “Father There is Only One (Padre No Hay Mas Que Uno)”, which will be released in late July. Spain debuted. It opened at the tune of $ 2.52 million, or 70% of the total Spanish branch office that weekend. To date, the film has grossed more than $ 4.4 million with over 665,000 people buying tickets to see the film.
“The office’s revenue for the sequel this year was significantly higher than that of the original film, which was even the highest grossing domestic film in Spain in 2019,” Aron said.
The second “Padre” movie does 20% more box office revenue with 20% fewer cinema locations, said Comscore’s Senior Media Analyst Paul Dergarabedian. The first film “Padre” was last year the number 1 local title in Spain.
Simple, content drives film-going, and in the international market there are some great examples of films that have found windows of opportunity and advantage with enthusiastic audiences being lured to theaters by these high profile new films , “said Dergarabedian.
In South Korea, a steady stream of local films has quickly lifted sales at the office. “Peninsula,” grossed $ 26 million in three weeks. “Steel Rain 2” opened last week and has reported $ 9 million in ticket sales. This weekend will bring “Deliver Us From Evil”, which is expected to be the no. 1st place to conquer.
South Korea had the second-highest cashier in the box office last week, according to Comscore, just behind China.
Go global first
With so many theaters open internationally and with local titles performing so well, it’s no surprise that American studios choose to release their films outside the US
On Thursday, horror film “Antebellum” became the last film to support its release strategy. It left its August release date and set a digital rental date of September, skipped by theaters in the US. However, the film will be released in some international movie theaters.
This trend could continue as long as the US cannot safely reopen its theaters. The October release of “Wonder Woman 1984”, as well as the November releases of “Black Widow” and “Soul” are all in question. These blockbuster features would traditionally bring in massive revenue for theaters and studios, but without a guarantee that people in the US could safely venture out to see them, they could easily be priced if given an international release.
Before the pandemic, Hollywood was already thinking globally by targeting international markets like China with high-octane blockbusters in hopes of scoring bigger box office hits. U.S. blockbusters often generate more than 60% of ticket sales outside the country.
China operates more than 10,800 theaters, currently 64% of those locations are open. In total, Chinese theaters account for almost 40% of the total number of theaters in the world.
Last year, the country’s office counted $ 9.2 billion in ticket sales, the second-highest-ranked ticket office just behind North America, which seized $ 11.4 billion. Before the pandemic, it was expected that China would darken the US within a few years and become the global cinema leader.
China’s ability to reopen its theaters and become the top box office earner makes the region incredibly happy for studios. Especially if analysts are not optimistic about America’s ability to successfully reopen theaters before the end of the year.
“Given the imperfections of the administration in the mood of the pandemic, and the resolute idiocy of a large part of the public, it seems to me that both interest and the ability to return to theaters in 2021 will be dulled when and if there is an effective vaccine available, “said Doug Stone, chairman of Box Office Analyst.
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