How the Film Business Changed in 2020

How the Film Business Changed in 2020

2020 was the turning point for a 100 year old business model. Find out what the new model of cinema distribution looks like?

With all the craze around content today, there's no question on the big bucks that the movie business rakes in every year. In 2019, global box office revenues totalled $42 billion – an all-time high – contributing almost one-third of the estimated $136 billion in the value of worldwide movie production and distribution. There was hopes to that in 2020 but life had different plans.

The Covid-19 pandemic upended the film industry, halting film production and closing cinemas almost overnight. No one saw this coming and worse, no one was even prepared. Studios were in a state of uncertainty as to what might become of their slated releases for the year, especially the big IP's which are predicted to bring in billions.

Enter the streaming giants

As the world went into lockdown, people started flocking to the online world to distract themselves from the chaos around them. Streaming services leveraged on the opportunity and released multiple content pieces to entertain audiences. In the MENA region, SVOD service Starzplay reported an increase of 50% in streaming hours per unique user.

The rise of streaming and video-on-demand has led studios to grapple with theaters for years over what is known as the "theatrical window," the length of time a movie plays in theaters before it is offered on other platforms. While studios are enthusiastic about bringing in revenue from all sources, box office returns tend to be extremely massive. Which is why shortening the window has been a contested point of discussion in Hollywood. The other side is that theatres are dependant on that window for their own survival.

Universal plays its move

If someone told you that Trolls World Tour would be the trigger that disrupted the movie business forever, you'd probably just laugh it off. But that's exactly what happened. As Covid-19 cases began spiking in March, Donna Langley, chairwoman of Universal's filmed entertainment group decided to make some of its films which were already in theaters available on-demand immediately. The list included The Invisible Man, The Hunt and Emma, but the movie that made the biggest splash was Trolls World Tour.

"We had a big consumer product program on the film, and there was just no way that we could move it out of the year," Langley said. "We really wanted to get it out there to our audience. So, yes, we made the bold decision to put it into the home and use the digital marketplace to be able to do that," as stated in an interview in CNN Business.

This little experiment set the tone for how movies would be released during the pandemic. The Trolls sequel became a big success, even topping the numbers from its predecessor. Soon, WB and Disney+ began to follow suit, with Disney taking the highly anticipated live-action feature Mulan to its streaming service for an extra fee.

The new normal for cinema

Initially, popular theatre chain AMC banned previewing movies produced by Universal studio but the rift soon turned into a landmark deal that led to the creation of an entirely new business model for Hollywood. In the new deal between theatre chains and Universal, slated film releases will hree weekends — or 17 days — of in-theater exclusivity, rather than the typical 70 to 90 days. After that, the films will be shifted to video-on-demand platforms. "It's now a 100-year-old business mixed with a ten-year-old tech business. I think we're learning whether or not we can all get along," said Langley in the same interview.

Warner Brothers announced in December that it would release their entire 2021 slate of films in theatres and on HBO Max on the same day. The move is an attempt to compete and grab Netflix's market share. Disney and NBC Universal are also doubling down on the streaming route. The war on streaming begins now.

Like other industries, the pandemic accelerated the pending shift for studios to enter the streaming world. Once all is said and done, many are unsure of what holds for the future of theatres. In countries such as India, theatres have only begun to reopen this month. In the Middle East, countries such as the UAE reopened theatres in mid 2020 but there's no data or numbers to showcase whether more people have started coming to theatres or whether they're still binging on Netflix. Only time will tell.

Canonical Link: https://communicateonline.me/category/industry-insights/post-details/how-the-film-business-changed-in-2020

Copyright © MediaQuest Corp. All rights reserved.

- Advertisement -
Dark Light