Coronavirus forces major changes in movie industry. Will the rush to streaming last?

With much of the nation on lockdown amid the spread of coronavirus and millions of Americans looking to entertain themselves at home, the movie industry has responded with seismic shifts. Most notably, several studios made theatrical releases available on-demand within days of nationwide theater closures.

NBCUniversal moved “Emma,” “The Hunt” and “The Invisible Man” to on-demand through a variety of providers on March 20. The films were all playing in theaters when states started issuing stay-at-home orders.

Also, Columbia Pictures moved “Bloodshot,” a Vin Diesel action picture on-demand just 11 days after its March 13 theatrical debut and Warner moved the Ben Affleck sports drama “The Way Back” to on-demand just two weeks after its debut.

NBCUniversal also announced its DreamWorks Animation feature “Trolls World Tour” will go on-demand April 10, the same date it was scheduled for theaters. The decision to push “Trolls” directly to homes contrasts the more common practice of delaying or shelving big-budget releases. For instance, the James Bond film “No Time to Die” was moved from April to November, the “Fast & Furious” sequel “F9” (also from Universal) is moving from May to 2021, and “A Quiet Place II” and Disney’s “Mulan” had their March releases shelved indefinitely.

Theaters — like bars and restaurants — have been hit particularly hard by COVID-19 shutdowns, and the decision to release movies into homes day-and-date with a planned theatrical run is significant. Major studios have flirted with this idea in the past but received pushback from exhibitors, whose business model depends on fresh, in-demand content. The COVID-19 shutdowns changed the landscape.

More than 90 percent of U.S. theaters are closed, according to Patrick Corcoran, vice president and chief communications officer for the National Association of Theatre Owners. Although there is no clear indication that big-budget movies will continue with simultaneous theatrical and on-demand releases, the move by NBCUniversal, owned by home entertainment giant Comcast, got the attention of exhibitors.

“I can say if this is a model that becomes the norm … theaters like ours will not be able to survive because we are single entities that rely on foot traffic,” said Brian Kates, general manager of Feather River Cinemas, an independent exhibitor in Oroville, Calif., about 70 miles north of Sacramento. The theater closed two weeks ago. “We hope once we’re able to get back online that Hollywood would not continue this model. ... But we don’t know what’s going to happen. Everything can potentially change right now, and it’s scary for everyone.”

Corcoran said it’s not only independent theaters that are threatened by the widespread coronavirus shutdowns.

“The pain is pretty widespread,” Corcoran said. “It depends on their cash reserves. It depends on their expenses.”

Corcoran does not anticipate a broad distribution shift after the COVID-19 pandemic runs its course. In fact, he said his association has received assurances from all major studios — except Universal — the traditional 90-day wait between a theatrical release and on-demand availability will resume as soon as the nation normalizes. Universal, the one studio Corcoran has not received a commitment from, did not respond to interview requests by the time of publication.

Corcoran said there are elements within the home entertainment divisions of studios that appear interested in shortening or eliminating the window between theatrical and home releases, but the theatrical divisions tend to side with exhibitors. Corcoran said he believes the delay between theatrical and home release makes sense for both studios and exhibitors because the home entertainment market isn’t as lucrative as it was 15 years ago. He does not, however, begrudge studios adapting to the unprecedented circumstances created by the pandemic.

“We fully understand that studios have no revenue coming in from theatrical release,” he said, “so they’ve got to go ahead and get to the home. … And, again, when things get back to normal, we expect that normal business considerations will be in place.”

COVID-19 shutdowns have also led to other industry shifts. Shooting has been suspended on pictures ranging from “Matrix 4” to James Cameron’s “Avatar” sequels, and streaming services are fast-tracking popular titles. Disney moved aggressively, shifting the animated hit “Frozen 2” to the fledgling Disney+ streaming service on March 15, three months earlier than planned. Also, the latest Pixar film, “Onward,” was offered for digital purchase beginning March 20, and it moves to Disney+ April 3. Other companies have also sped the transition to home video, with new announcements coming rapidly enough that they’re hard to track.

One thing that remains to be seen is how audiences react to having tentpole movies in homes ahead of schedule. Most movies shifted from theaters to the home market have a suggested on-demand fee of $19.99, considerably more than consumers are used to paying for online rentals.

Corcoran said he has doubts about the viability of that price point.

“People are shifting even more in the home to the least expensive way they can consume a lot of content,” he said. “The logic of recouping revenue or getting additional revenue by going fast to the home just isn’t working. I mean, audiences are signaling they can wait. They’re either going to see it theatrically or they can wait.”

Corcoran also said many families have two budgets, one for going out and one for home.

“You look at what streaming services you’re paying for, and then you decide if you are going to rent things,” he said. “If you’ve already got hours and hours and hours of content in your home, you’re going to go to those things first.”

This story was originally published March 30, 2020 at 10:28 AM with the headline "Coronavirus forces major changes in movie industry. Will the rush to streaming last?."