Theatrical Release Window Dismantled

We have been predicting, for some years, that the time would come when first-run movies would screen day-and-date across all media outlets - effectively dis-mantling the exclusive theatrical window. That prediction took a step closer to reality yesterday when AMC Theaters inked a deal with Universal Pictures.

Under the deal all of Universal's movies will move to an on-demand video status just 17 days after their theatrical release at AMC Theaters.

Big-budget blockbusters will still enjoy long theatrical runs given they continue making bank at the box office. But the question remains: Did cinemas just escape extinction or hasten their own extinction?

We knew (all of us) that the exclusive theatrical release window was going to be a relic of the cinema industry the day Netflix began to stream movies.

The AMC/Universal deal provides a road-map for the other studios and exhibitors to follow. However, it all comes down to what consumers do. Movie-going may go back to the pre-virus level, but on the other hand, it may not. Regardless, the theatrical window is closing. It is up to cinemas to make going to the movies an experience unmatched at home or anywhere else.

Production Comes To A Dead Stop!

HWD isn't going back to work anytime soon.

Movies, shows and episodic series for theatrical, broadcast, or streaming has come to a halt - as safety from contagion has over-ruled all other considerations and needs.  So far all of the efforts from various entertainment industry commissions and groups have been disregarded.

Virus testing has quickly become the central barrier to overcome in getting content productions back on-stream. If a production adheres to all of the necessary protocols a location that is safe enough for hundreds of people is very difficult. No U.S. city wants production shooting on their streets so all scenes must be achieved indoors.

Producers and directors are searching for safe-havens so some productions have moved to places as Prague, Budapest, or Bucharest where the virus is much less prevalent and therefore much less controlled then in U.S. or Western European hot spots.

It appears that only a vaccine will bring an end to the production dilemma, and right now that isn't likely until 2021.

Jim Lavorato

Uncertainty Is The Only Certainty

Here is the scenario:
- Studio announces plans to release a new movie
- Virus contagion forces scuttling of release date
- Studio delays and reschedules release date

"Tenet" was postponed twice in June, "Mulan" has been rescheduled three times. It is only logical that this scenario continues as State governments order cinemas to stay shuttered.

Some tentpoles have been shifted to the latter part of the year. Others pushed into 2021 and more than a few beyond that. The problem for the studios is that all of this scheduling and rescheduling cost unforeseen and unbudgeted marketing dollars. It's a chicken n' egg situation - studios want to release but need a critical mass of screens to do it, especially for tentpoles.

"Tenet" and "Mulan" are currently scheduled for release August 12th and August 21st respectively, Marketing budgets for these two movies, according to the studios, are still within budget but another postponement and the marketing of these movies will cease completely until a "very hard" release is scheduled.

It is estimated that pushing the release date for a blockbuster a few weeks ups the marketing costs by $500k but that number could easily mushroom to $5m+ if delays continue. The bulk of any movie's promotion and advertising expense occurs during the two weeks prior to release (promotion normally begins six weeks before release and peaks a week before).

NOW What?

Since cinemas are closed studios have had to reimagine their marketing strategy.  Playing trailers in cinemas, having press tours with casts, or other live events are not an option. To counter this, the studios are relying more on social media, apps, and video games. On the reverse side, cinemas can't successfully reopen until there is new content to screen. 

The major glitch in this whole mess is that even when reopened and there is great new content screened who is to say moviegoers will show up.

Best
Jim Lavorato