Posted in: Movies | Tagged: movies, nato

NATO Believes the Theater Industry Will Rebound from Coronavirus

To say that things have been a bit chaotic in Hollywood since the coronavirus hit would be a bit of an understatement. From major movie stars getting sick to productions getting shut down to delays of massive tentpole movies to theater chains closing down entirely, 2020 is shaping up to be a rough year for Hollywood and the movie industry. Now that Universal has done what the theater industry has been dreading to happen for years and will offer new releases as VOD a lot of people are wondering if this means the end of the theatrical model of movie distribution. Things aren't so black and white though and NATO, or the National Association of Theater Owners, released a statement today saying that they understand why studios have decided to put movies on VOD.

Although there has been speculation in the media that the temporary closure of theaters will lead to accelerated or exclusive releases of theatrical titles to home streaming, such speculation ignores the underlying financial logic of studio investment in theatrical titles. To avoid catastrophic losses to the studios, these titles must have the fullest possible theatrical release around the world. While one or two releases may forgo theatrical release, it is our understanding from discussions with distributors that the vast majority of deferred releases will be rescheduled for theatrical release as life returns to normal.

When those titles are rescheduled, they will make for an even fuller slate of offerings than normal as they are slotted into an already robust release schedule later in the year.

No one can precisely predict when public life will return to normal, but it will return. The social nature of human beings – the thing that exposes us to contagion, and that makes it so difficult to change behavior in response to pandemic threats – is also the thing that gives us confidence in the future. People will return to movie theaters because that is who people are. When they return they will rediscover a cutting edge, immersive entertainment experience that they have been forcefully reminded they cannot replicate at home.  In the uncertain, difficult economy ahead, movie theaters will fill the role they always have in boom times and in recessions – the most popular, affordable entertainment available outside the home.

As we mentioned in our article about Birds of Prey and The Gentlemen coming to VOD there is a lot going on here that people aren't l0oking at. The big thing is that, save for possibly Trolls World Tour, none of the movies breaking the theatrical model have huge budgets. In fact, most of the movies going to VOD are movies that have either made their budgets back at the box office earlier this year or have small budgets, to begin with. However, when you look at movies like F9 or Mulan that have massive budgets they need the theatrical model to make back their money. So yes, we are likely going to see some movies jump to VOD to help offset the costs of closing theaters. At the same time, we shouldn't expect to see any massive movies go straight to VOD anytime soon.

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