If theaters are closed for 3 months, domestic grosses may struggle to hit $7-B, a 20-year-plus low.
By 3 April, the greatest calendar migration in the 100-year-plus history of the movie business was complete as virtually all major summer tentpoles relocated amid the coronavirus pandemic in a mega-game of dominoes that has reshaped the Ys 2020 and 2021 release slates, and beyond.
The shuffle revealed the industry’s collective hope is that moviegoing will return to normal levels by mid-July, evidenced by Warner Bros. sticking to its 17 July date for Christopher Nolan’s Tenet and Disney’s announcement that Mulan, originally set for 26 March, will now go into theaters on 24 July while Warner Bros. pushed back Wonder Woman 1984 from early June to 14 August.
If that scenario holds, North American box office revenue will struggle to hit $7-B for the year, the lowest figure in more than 20 yrs and nearly 40% behind Y 2019 at $11.4-B, per London-based research firm Gower Street Analytics.
The company estimates that domestic revenue will come in at $6.82-B if all 5,400 US cinemas stay shuttered for a full 3 months, with traffic returning to normal levels immediately. If theaters are closed for 3 months, but traffic builds slowly, that number could be in the $6.36-B range.
Almost all of the 5,400+ theaters in the US were shut by March. The best-case scenario is a 2 month closure, which would put revenue in the $7.09-B range depending upon how quickly consumers return, according to Gower.
The last time North American revenue came in at $7.5-B or lower was in Y 2000 according to the National Association of Theater Owners.
In Y 1999, it was $7.33-B, preceded by $6.86-B in Y 1998, $6.21-B in Y 1998, $6.21-B in Y 1997 and $5.81-B in Y 1996.
“The studios have looked at the situation and realized they cannot fit everything into the end of this year. They’ve had to accept that this year is going to take a big hit,” says Gower Street head of theatrical analytics.
He notes that the films pushed to Y 2021 incl: F9, Jungle Cruise, The Eternals, Minions: The Rise of Gru and the next Ghostbusters installment amount to more than $1.8 billion in lost revenue this year domestically.
Globally, box office revenue clocked in at a record $42.2-B in Y 2019.
Most analysts do not yet have a target number for Y 2020, but if the estimated Y-Y drop in North America is an indication, the movie business could be facing a worldwide total around $25 to 22-B.
China is the world’s 2nd-largest moviegoing market after the US and Canada, its cinemas have been closed since the end of January.
Studio executives and box office analysts caution that box office traffic may not return in earnest immediately.
They also caution there could be more calendar changes if theater closures are extended.
At the same time, the Hollywood ecosystem is not abandoning the theatrical experience, as almost every major movie has been pushed to a later date, rather than deciding to go straight to home entertainment.
“I think people will want to go the movies once this over, but it will be a process for people to build their confidence,” says Paul Dergarabedian of Comscore. “I think it will behoove every public-facing business to roll out slowly. The last thing anybody wants is quick ramp-up and then have another set of closures.”
Paramount domestic distribution chief agrees. “There’s no template for this. It’s like trying to work a Rubik’s cube. And frankly, I believe the release calendar will continue to be in flux. At the same time, entertainment outside of the home will be more important than ever.”
Have a healthy weekend, stay home, screen a movie!