Box Office: No Blockbuster This Summer

Box Office: No Blockbuster This Summer

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Studios, theater owners and filmmakers now find themselves in an huge dilemma, wanting to fight for the survival of a theatrical business that was already under siege pre-C-19 coronavirus chaos, but also facing the unpredictable scary specter of the medical chaos. As C-19 coronavirus cases continue to rise and states that had lifted lockdown rules roll back their openings, a August releases are uncertain.

If studios are forced to push release dates again, the Summer of 2020 would be the 1st since Y 1975 that moviegoing’s high season unfolds without a blockbuster.

That brings severe financial consequences

Last year, the season, which runs from the 1st of May through Labor Day, counted for $4.35-B, or 38%, of the full year’s $11.4-B in ticket sales.

Box office analysts are hard-pressed to gauge Tenet‘s potential in this environment.

Director Nolan’s average opening weekend gross in North America is $56-M, some analysts believe that Tenet has a shot at a $30-M opening weekend, likely occupying a record number of screens but playing to 59%-full, socially distanced theaters. The film will need to earn around $400-M globally to break even, after factoring in marketing.

Like Warner Bros.(NYSE:T), Disney (NYSE:DIS)has been engaged in a release-date dance with its Chinese folklore action film, Mulan, which has moved from 27 March to 24 July to 21 August in an attempt to get away from The China Virus.

“It is never ideal to have to move a release date,” says Walt Disney Studios co-chairman and chief creative officer Alan Horn, “especially multiple times, as some films have had to do in these past few months, but we’ll have to continue to do so until the situation is more stable. It may be painful at the moment, but health and safety is the priority right now, and eventually we’ll be on the other side of this.”

National Association of Theatre Owners chief John Fithian and others at the trade organization have been briefing state and local authorities as to which safety and social distancing measures theaters are planning in hopes of getting the Green Light to reopen the 5,500+ indoor cinema sites in the US

As of 30 June, cinemas in 42 states could reopen with certain protocols. That excludes Los Angeles and New York City, the country’s 2 largest moviegoing markets, without which the big national cinema circuits cannot reopen.

It is a moving target,” Mr. Fithian says. “People want to get out of their houses and go to movies. It is just a question of how long it will take to get there.”

Cinemas raised the bar on Monday, 6th July, when filing a lawsuit against the state of New Jersey alleging that Governor Phil Murphy cannot keep theaters closed any longer.

New Jersey is 1 of 5 states, the others being New York, North Carolina, Maryland and New Mexico that have not yet said when movie theaters can reopen even though institutions such as churches are being allowed to resume services.

Hollywood movies such as Tenet and Mulan are global box office plays.

An event film can make 70% of its money offshore, and internationally the picture is equally complex. Much of the world will reopen before the US, but China’s more than 12,000 cinemas remain closed, and markets like Brazil and Mexico, which are Key to the success of a family film like Mulan, are facing rising C-19 numbers, with most theaters still closed.

Like Universal (NASDAQ:CMCSA), Sony (NYSE:SNE) moved its big event movies, including a Venom sequel and a Ghostbusters update, out of Y 2020 entirely. But the studio is experimenting with another, old-fashioned notion, that is slowly rolling out a low-risk romantic comedy, executive produced by Selena Gomez and called The Broken Hearts Gallery, which Sony bought for less than $10-M after the virus cahos had begun and plans to release it on 7 August

Even if the world were normal, it is not a movie that you would release on 3,000 screens,” says Tom Rothman, chairman of Sony Pictures Entertainment’s Motion Picture Group.

The play on Broken Hearts Gallery is not about a weekend. It is about several months. If there are theaters open, and the safety protocols are in place in Ohio and not in Los Angeles, that’s OK. We will play Ohio and then we will play L.A. when it opens. That’s how movies were released in Y 1975 the pre-Jaws era. They rolled out. If you are the only film in the market, that can be OK, if you’re able to be patient.

This strategy depends on being able to move quickly, without the burden of costly TV ads and billboards that can rapidly become out of date. Sony’s marketing campaign for The Broken Hearts Gallery is entirely digital, and the film will enjoy a publicity boost just from being a studio movie in theaters.

Alongside Broken Hearts Gallery will be Unhinged, the 1st movie from Solstice Studios, Mark Gill’s indie outfit. The road-rage thriller, starring Crowe, originally was set to open in September, but Solstice decided to move up the release in hopes of generating exposure. “It is simultaneously exhilarating and terrifying. You have all these unpredictable things, like release-date changes and health updates,” says Mr. Gill. In the span of 2 months, Unhinged has moved 2X’s, 1st from 1 July to 10 July, then from 10 July to 31 July. “You have all the theater owners to call, then you have to shift all the ads. It does feel a bit like ‘Groundhog Day;. We all knew this might happen,” says Mr. Gill. “We knew it would get bumpy. But there is a tremendous advantage to being 1st. We have gotten so much publicity. We’ve earned over 400-M media impressions, including social media. In a normal time, we would have been lucky to get 50-M.”

When theaters do finally reopen, audiences will enter a different world, where face masks, staggered seating and high-tech electrostatic sprayers are the new normal.

Theaters’ planned enforcement of those new policies has already proven divisive.

On 18 June, AMC Theatres CEO Adam Aron ignited a social media maelstrom when, in explaining why customers would not be required to wear masks, he told reporters he did not want to wade into “political” territory.

Filmmakers and film fans spoke out, with Doctor Sleep director Mike Flanagan Tweeting: “Face masks are not political. @AMCTheatres, please reconsider this decision to intentionally endanger your own customers.

Sources said that Disney was so concerned, it reached out to Aron’s team the evening of 18 June. How could the media giant require guests to wear masks at its reopened theme parks but not require them of moviegoers heading to see Mulan?

Within a day of Mr. Aron’s comment, AMC reversed its policy, and the company now plans to require masks.

Regal Cinemas and Cinemark Theatres, the other 2 of the country’s 3 largest circuits, also retreated and issued revised guidelines, saying patrons would be required to have a mask on except when eating concessions inside an auditorium.

Have a healthy week, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.