How Studios are Choosing Release Dates During the COVID-19 Outbreak
As a result of the COVID-19 pandemic, movie theaters have closed for the time being, but consumers have not lost any appetite for the movie-viewing experience. So with streaming services temporarily taking over as the primary option for movie watching, how can the concept of “new releases” stay intact? How can the same fresh experience be delivered to movie-goers from the safety of their homes (and at a price comparable to a box office ticket)?
It makes little, if any economic sense for studios to stream the release of big budget films that are meant to be seen in theaters and are expected to perform well at the box office; theaters won’t stay closed forever, and a Netflix Premium monthly subscription costs $16 and allows unlimited viewing of anything on the platform. By comparison, the price of streaming versus buying a ticket or watching on-demand means a huge drop in studio revenue. So after streaming, the next best option involves pushing back the release dates of films that meet the criteria for theater-specific viewing.
Which movies fit the bill? So far, studios seem to be postponing release dates based on three factors: the relative cost of production (splashy, big budget films like F9 from the Fast & Furious franchise), the film’s likelihood of nomination for an academy award (is it considered “Oscar bait”?) and the way the company of a crowd contributes to the enjoyment of the movie (some films are more satisfying when experienced in a group).
Films that satisfy these criteria are being postponed in order for the studios to have a shot at recouping the cost of production. Certain other movies are being released on schedule with the hope that the opportunity to stream at home will encourage viewers to pay a comparable on-demand price.
What about the movies that are being sent directly to streaming options? According to Erik Davis, the managing editor of Fandango, these include family films like “Trolls World Tour”, “Scoob”, and “Artemis Fowl”. Parents enjoy streaming films for home-bound children, and most family movies depend on merchandising and toy sales for a significant portion of their total revenue. These toys and items have already been shipped to retailers and are ready for sale. Due to their long shelf-life and little need for the in-theater experience, animated and family films are being pushed toward streaming at a faster rate.
The same fate may apply to low or mid-budget films that are not expected to break records at the box office, for example, “The Lovebirds”, with a reported production budget of 16 million. High-cost films, like “Black Widow” from the Marvel franchise, would lose money for studios if streamed too early, so for those would-be blockbusters, release dates will be pushed back. Other examples include Disney’s “Mulan,” Sony’s “Ghostbusters: Afterlife,” MGM’s “No Time to Die,” and Paramount Pictures’ “Top Gun: Maverick”.
Public feelings about the pandemic also seem to encourage studios to take a chance on home viewing. Survey results published by Variety indicate that despite the partial reopening of theatres, 70% of respondents are more likely to watch a movie from home, even if/when theater viewing is an option. (The survey was taken in mid-May.)
Theaters will certainly come back, but since re-opening dates are unclear, studios need to make some careful decisions in order to generate the highest returns on investment for each film project.
