Hollywood is About to Lose $5 Billion to Coronavirus
Theaters all over the world are closing thanks to the COVID-19 pandemic and Hollywood is paying a hefty price.
Over the past 20 years, we've seen an incredible shift in the way movies are made and marketed. The new summer movie season starts in March, with major releases rolling us into the busier months of May, June, and July.
These are the months when studios stack their bell cows and rake in the money.
But not this year.
You might have heard, but a pandemic is sweeping the globe.
It's called COVID-19, a rare and potentially deadly form of the coronavirus, and it's pretty bad. I'll let John Oliver tell you more about it in the video below.
But we're not here to make you wash your hands. (Though, you definitely should wash them.) We're here to somewhat callously put a price tag on the cost of this virus on box office receipts.
Hollywood creates global products. Movies rely even more on the foreign box office than they do the domestic. So when you find out that theaters across the globe, especially in Asia, are closing, the people inside Hollywood begin to worry.
Particularly with the busiest movie release season upon us.
We reviewed a report in The Hollywood Reporter and wanted to give you the most important facts.
Hollywood is About to Lose $5 Billion to Coronavirus
In 2019, the international box office was a record $31.1 billion, which, when added to domestic totals, set a record at $42.5 billion. But with theatrical closings in China for weeks, as well as heavily impacted moviegoing in South Korea, Italy, and Japan (the world's third-biggest film market) things are not going well in 2020.
70,000 movie theaters are closed in China.
That means big-name releases like Mulan, Onward, and even The Invisible Man are suffering or about to bomb overseas.
The Invisible Man soared domestically, with $29.1 million this weekend, but only eked out $1.1 million in South Korea, where people have been urged to steer away from being with the masses.
South Korea is the 5th biggest film going market and revenue is now down 70% since February 1st.
An official at the Korea Film Commission told the Hollywood Reporter, “The situation now is much worse than what we’ve seen during the outbreak of [Middle East respiratory syndrome coronavirus] MERS in 2015, the audience dropped to more than 40 percent then, but there was no such thing as theater closures and the market revived after about a month. That’s not going to be the case with coronavirus. It’s very unusual to see a daily admission fall below 100,000. But that is happening now, and the outlook is unpredictable.”
And it's not just Asia.
Italy and Europe
In Italy, roughly half of the country's movie theaters are shut down. The government is trying to stop the outbreak from the northern part of the country and spread to the rest of Europe. The Italian market is down 76% from last year.
“The consequences of the forced closings and the fear that has spread among the public are dramatic,” said Francesco Rutelli, President of ANICA, Italy's Association of Cinema, Audiovisual and Multimedia Industries.
According to The Hollywood Reporter, "In Italy, all major U.S. debuts planned for this past weekend were pulled, including Invisible Man. Local releases of Onward, A Beautiful Day in the Neighborhood, Charlie’s Angels and The Grudge, among others, are still uncertain."
What's Next for Global Cinema?
Cinemas are still closed, affecting the post-Academy Awards push for titles opening internationally like Doolittle, Sonic the Hedgehog, JoJo Rabbit, Marriage Story, 1917, and Little Women.
By the time those theaters are still open, these titles will have to compete with new movies coming out too.
And that doesn't even take into account titles like Mission: Impossible 7, which has suspending shooting in Italy.
Aside from that, there are real blockbusters coming down the pipeline. Disney was definitely hoping their $200 million tentpole Mulan would be cleaning up across Asia as well as America.
Bond movies usually have a global audience, but MGM/Universal postponed their Chinese premiere to save money and hope they can make it back at a later date.
In the animated world, Disney and Pixar pushed back Onward's release date in Korea to April and canceled all of the film’s local press and industry screenings. “We will select and announce a new release date after taking stock of the situation surrounding the coronavirus,” Disney said in a statement.
Netflix and Amazon's Time to Shine
We live in the middle of a world caught between the theatrical experience and the relative ease of watching at home. Now that theaters are closing to wait out the global pandemic, Netflix, Amazon, and other streamers are in a great position to capitalize.
I know that sounds harsh—it is—but there's never been a better time to be a company that sends content directly into someone's home than right now.
Especially when we're being urged to stay there.
Theaters across the globe were already fighting an incredibly hard battle enticing people to come out and pay rising prices to see movies.
While we don't know the long-term effects of COVID-19, we do know that when we're stuck inside for elongated periods of time, people tend to stream movies and TV.
While countries gear up to battle the disease, distributors are trying to figure out their own abilities when it comes to tackling this crisis. Only time will tell if this box office dip is an aberration or the beginning of a drastic change in the way we view cinema.
Talks of canceling or postponing Cannes, which is set to kick off in May have already begun, along with other repercussions we have not thought of...like public perception.
Theaters have often been akin to churches for moviegoers, places of worship, but avoidance of crowds and germs may make the comfort of your own home the new Mecca.
For now, everyone stay safe, healthy, and stay tuned for updates on this story.