The Hollywood’s Worst Year Ever
The darkest year for American cinema. Before winter, the cinema industry has been already bitterly cold. Perhaps, many theaters can’t wait for next spring.
The year 2020 was very strange in the whole world. Because of the new epidemic, I have basically stayed at home for the past six months. I was too lazy to take care of the car a long time ago and finally decided to go to a 4S shop. Unlike the past, which requires appointments many days in advance, there is no need to queue for maintenance this year, and the car dealer’s attitude is also quite enthusiastic. Asked about the passenger flow and sales this year, he smiled bitterly behind the mask and said, “Today is a special year, isn’t it? At least we are still working.”
I went to a movie theater for the first time this year. The places I used to be familiar with are now particularly unfamiliar: in the parking lot where hundreds of cars can be parked, there sparsely parked a dozen cars. There is no one at the entrance of the theater. Pushing the door into the ticket hall, only three staff members can be seen in the huge front hall. The stalls selling popcorn, and cola in the middle of the hall were completely closed. Only one of the seven or eight ticket windows is open. According to the epidemic prevention process, the ticket seller wearing a mask first asked me if I had recent symptoms of the COVID-19 and whether I had been tested for the new virus; after getting a negative answer, he took my temperature again and then started selling tickets.
Christopher Nolan’s movie deserves the best visual and sound effects, and the ticket price for the XD The giant screen is $14.25. The conductor turned to the ticket screen and asked me to choose a seat. But it doesn’t make much sense, because the film has five minutes to start, and only two seats were sold for the finale. To ensure that there is no exposure to the virus, the theater does not even give paper movie tickets, and you can enter directly if you buy a ticket. The whole movie lasted two and a half hours, and I couldn’t see what happened to the other two audiences. At least I wore a mask all the way and washed my hands with disinfectant when I entered and exited the scene.
After watching the movie, the sky is getting dark, and the parking lot outside is still deserted. The previous Friday evening was the peak time for watching movies. The weather has turned cold, this scene is really sad and sentimental. Cinemas are undoubtedly one of the industries that have been hit hardest by the new pandemic; in this special year, the cinema line seems to have fallen directly into the ice cave from the prosperous 2019. In more than half a year, they were unable to open for business, and basically no revenue. Even if it reopens, it is still lingering, and there is no hope of improvement for the time being.
This article is not a film review, and I do not intend to say too much about the film itself. Director Nolan is notoriously fond of playing with the timeline, deconstructing and reorganizing normal stories over and over, but “TENET” seems a bit too confusing. Although his movies have always been read a few times to really understand, he has no interest in watching it a second time. This film has a rating of only 71% on the RottenTomatoes website in the United States, and an audience rating of 87%, which is far below the 90 levels of the previous blockbusters.
The coldest winter in American cinemas began at the end of March this year. With the concentrated outbreak of the new epidemic, homes in various parts of the United States have been closed. Indoor commercial places such as movie theaters and gyms have become the focus of epidemic prevention. American cinemas closed from the end of March until the end of August, and areas like Silicon Valley even went out of business until the end of October. For more than half a year, major chain theaters in the United States, such as AMC, Regal, and Cinemark, were completely out of food. Only the outdoor-operated car theaters were able to play some old movies.
How miserable is this year for the American film industry? Comscore’s data show that the box office revenue for the first three quarters of last year was US$8.4 billion, and this year it was US$2.05 billion. The total box office revenue in the United States last year was 11.4 billion U.S. dollars, and this year may only be 3 billion U.S. dollars, and most of them came from the booming first quarter. In the past, the Christmas season of the movie hot season, the total box office in the fourth quarter of this year is expected to be less than 1 billion US dollars. In the first month of theater openings (from the end of August to the end of September), the box office revenue of the entire North American region was only $124 million.
The dismal box office is obviously due to the epidemic. Although the theater has adopted measures such as limiting the number of people and strict disinfection after it reopened, it still cannot recall the lost audience. A survey conducted at the end of September showed that only 22% of viewers are willing to go back to the theater to watch a movie. Wedbush analyst Michael Pachter believes that “the cinema industry cannot fully recover until consumers are truly relieved by going to the cinema. This means that unless the vaccine is truly widespread, the situation cannot return to normal, and We have to wait until April to July next year.”
However, it is not only the epidemic that has hit movie theaters. Finally, they waited half a year before they were allowed to open. They can only enter a quarter and cannot sell food and beverages. This kind of regulation makes them feel miserable. Dan Orloff, manager of the Pruneyard Cinema Silicon Valley, said on the Internet, there is no new film released, the number of people is strictly limited, and the popcorn Coke is not allowed to sell. This situation is tantamount to closing the door in disguise. However, the epidemic prevention regulations only prohibit the sale of food and beverages in the indoor hall, and this theater simply sells it in the open at the gate.
Popcorn and Coke are the lifeblood of movie theaters. Statistics show that US movie theaters earned 10.36 billion U.S. dollars in box office revenue in 2018, while food and beverage revenue was 5.64 billion U.S. dollars, which is more than half of the box office revenue. The third-quarter financial report of the United States’ largest theater chain AMC showed that the box office revenue for the quarter was 780 million US dollars and the food and beverage revenue was 420 million US dollars. And compared to the box office revenue that needs to be halved with the film distributor, the low-cost and high-priced popcorn cola fries are the main source of profit for the cinema. A big Coke sells for $8, which is the business that keeps the movie theater alive.
But the most chilling movie theater is that there are no new films. Due to the closure of theaters due to the epidemic, major film companies have postponed new films that were originally scheduled to be released in the summer. When the theaters are allowed to reopen at the end of August, they can only release Inception, Black Panther, and Back to the Future for such classic old movies, the movie ticket is only $5. Obviously, these old movies that can be watched on streaming media cannot attract the audience. The only real blockbuster movie is Nolan’s new film “TENET”, which was released in the United States on September 3. Because of the epidemic prevention and control measures, theaters in Silicon Valley did not open until the end of October, and now they have started intensive gear shifts.
What makes the theater worse is that even if they opened, they still face the embarrassing situation of no film to release. The new film to test the waters became Waterloo. Marvel’s new film “The New Mutants”, after changing files five times, finally went live at the end of August, becoming the first blockbuster movie to reopen the movie theater. The movie’s budget was close to 80 million US dollars. As a result, due to the epidemic, the box office at the premiere weekend was only 7.04 million US dollars. As of last week, the total US box office was only 23.7 million US dollars. The blood loss is a foregone conclusion.
There is no cost savior for the real blockbuster “TENET” that theaters are looking forward to. Perhaps the movie itself is not exciting enough, or the audience is still afraid of the virus. Nolan’s new work did not bring much-needed box office revenue to the cinema. The North American box office revenue of “TENET” at its premiere weekend in early September was only $20.2 million, far from reaching previous expectations. It was only a fraction of Nolan’s previous blockbusters. “Batman: The Dark Knight Rises” had its North American premiere weekend box office. 160 million US dollars. Like the Friday afternoon show I watched, there are only three viewers for an annual blockbuster. Such attendance is really a disaster. US$45 may not be enough for the cost of the venue.
Since there are really no new films released, the annual blockbuster “TENET” can only be scheduled from early September to the present, and it is estimated that it will continue to be scheduled until December. Due to concerns that insufficient box office revenue will lead to losses, the film company has postponed the release time of dozens of films this year, and some high-profile blockbusters have even been postponed many times in a row.
Warner's “Wonder Woman 1984" was postponed to the end of the Christmas file, and films such as “007: No Time to Die” and “Black Widow” were postponed directly to next summer. November’s “Spiritual Journey” and December’s “Dune” and “Wonder Woman 1984” will be the last expectations of the theater.
Under the impact of the new epidemic, movie theaters and distributors seem to have fallen into a vicious circle: without blockbuster movies, theaters will have no box office, and the theater box office is dismal, making film parties reluctant to provide blockbusters. Of course, this is understandable. Because of the high production and publicity costs of blockbuster films, the box office of a movie must get nearly twice the box office revenue to make up for it. After-tax is deducted from the movie box office income, the theaters are roughly divided into half with the distributors and film owners. Several blockbuster films before the epidemic often invested hundreds of millions of dollars, and putting them in offline theaters under the current market conditions is tantamount to losing money directly.
Wedbush analyst Pachter said with emotion that this seems to have become a “chicken or egg” cycle. But in such a stalemate, the movie theater line is undoubtedly the most hurt. At the beginning of last month, Regal, the second-largest cinema chain in the United States, announced the indefinite closure of all 536 theaters in the United States (a total of more than 7,000 screens), and 40,000 employees were laid off again, less than two months before their opening in mid-August. Regal is not bankrupt, just closed down, but they did not determine the specific reopening time.
The last straw that overwhelmed Regal was that the 007 movies originally released in November were postponed again, which made Regal’s parent company Cineworld finally decide to give up. Cineworld CEO Mooky Greidinger explained, “This is not an easy decision. We have done everything possible to ensure the safe reopening of theaters. However, the new pandemic has made the operating environment of theaters increasingly difficult.” Even in the United States. AMC, the largest cinema chain, has also issued financial warnings many times, worrying that its cash flow will run out by the end of the year. The financial situation of some small theaters was maybe even bleaker.
The movie theater line was distraught, and the film crew was helpless. In September of this year, shortly after the reopening of American theaters, Disney Announced adjustments to the schedule of 10 upcoming movies, including Steven Spielberg’s new flop “West Side Story”, which will be postponed for a full year to December 2021, and Marvel’s “Black Widow” And “Eternals.”
During the epidemic, many popular blockbusters directly gave up offline opportunities and switched to streaming media platforms. The musical film “Hamilton” that Disney bought for $75 million has also given up offline release and will be released directly on its Disney plus this summer. However, Disney is unwilling to lose money on streaming media platforms to give away Liu Yifei’s “Mulan”, and decided to provide “Mulan” on-demand service on the Disney plus platform at a high price of $30 (this is already two to three offline movie tickets price). The new Pixar animation “Soul” originally released on Thanksgiving has also been changed to play on the Disney plus platform during Christmas.
In June of this year, Sony Sold Tom Hanks’s World War II anti-submarine blockbuster “The Greyhound” to Apple for only $70 million on Apple TV plus. Tom Hanks said very frankly that he was “Absolute Heartbreak” when he learned that the work starring his screenwriter had been sold to Apple Tv plus. Although Hanks admits that streaming media platforms can allow more viewers to see his movies, he also has huge regrets, “I don’t want to make Apple unhappy, but I have to admit that the visual and sound effects of this movie are used in movie theaters and TV. It’s totally different to watch online.” The budget of this movie is only US$50 million, mainly because Hanks’s income is linked to Box office dividends. Now selling directly to streaming media platforms means he has suffered heavy losses.
Streaming media platform is rich
This year is undoubtedly the year of disaster for the cinema chain, but it is the year of the outbreak of streaming media platforms. Netflix, Amazon, Disney, HBO, Apple, Hulu, and other major streaming media platforms are seizing the opportunity to expand their own content and expand their user base. Most of these streaming media platforms are backed by the world’s richest Internet giants, and they have enough budget to purchase new films. In addition to buying “Greyhound” for US$70 million, Apple even considers quoting US$350–400 million. The price bought “007: No Time to Die”, which has been delayed many times.
The epidemic at home has made streaming media platforms the only choice for people to watch movies. Netflix has added more than 28.1 million new users this year, and the total number of users has exceeded 190 million. The number of Amazon Prime video members in the second quarter of this year exceeded 150 million. As of the end of the third quarter, the number of paying users of Disney plus, which was released for only one year, has exceeded 73 million, which became the biggest highlight of Disney’s huge financial loss due to the epidemic.
Faced with many uncertain factors of the new crown epidemic, the film party has gradually changed its previous position and is willing to sell the new film to the streaming media platform at a reasonable price, recovering the cost and maintaining its own cash flow. Blockbuster films like “The Greyhound” are still so, and small-cost movies are even harder to count on. The movie “The Lovebirds” has a budget of US$16 million and was originally scheduled to be released in April; Paramount sold it to Netflix as soon as the epidemic was wrong. It was released online in May, which was the number of Netflix views in the week of May 22 the highest film.
Although the impact of visual and sound effects in movie theaters cannot be replaced by streaming media; if the epidemic continues like this, there is no audience to watch the movie, then everything is meaningless. The increasingly severe epidemic situation made studios gradually lose patience. Because as more and more movies are postponed to 2021, the box office competition for next year’s movies will become more intense. Even if movie theaters completely return to normal traffic next year (depending on the effectiveness and popularity of the vaccine), the film party may be very It is difficult to obtain the previously expected box office revenue.
The US epidemic has entered its 11th month, but the situation is getting worse. In the past week, the number of new cases in the United States has exceeded 100,000 every day, and it has even continued to hit new highs, with the daily death toll exceeding 1,000. California, Oregon, Washington state, and other regions have again begun to adopt epidemic control measures. The Santa Clara County government in Silicon Valley ordered another ban on indoor commercial activities starting on Tuesday, and the movie theater that had just opened for two weeks will be closed again.
Although Pfizer's effective rate of Phase III clinical trials of the new crown vaccine of Modena and Modena has exceeded 90%, the vaccine may have to wait at least a few months before the vaccine is truly universal. Besides, there are a large number of ultra-conservative people in the United States who are anti-vaccination and unwilling to vaccinate (religious conservatives even resist measles vaccine), which means that the virus may continue to spread and even new variants may appear. This winter, the United States will usher in the double blow of the new crown and flu epidemic. Cinemas are obviously the most popular commercial places. Maybe many movie theaters will not last the spring of next year. The National Association of Theatre Owners predicts that if the current situation continues, nearly 70% of small and medium cinemas in the United States will go bankrupt.