April 27, 2020
As local and statewide economies slowly re-open businesses in the face of a COVID-19 pandemic that has killed more than 50,000 Americans, movie theaters today (April 27) will officially be allowed to open in the state of Georgia.
While Georgia Governor Brian Kemp’s order may be wishful thinking, the reality for movie exhibitors is far less rosy with staffing shortages, a dearth of content and a weary consumer, according to media analyst Michael Pachter with Wedbush Securities in Los Angeles.
Pachter expects the 2020 box office to end down 47.1% from 2019 to $6 billion, and 2021 to end 59.5% higher than 2020. He expects minimal box office revenue in the current Q2, with ticket sales down a staggering 96.8% compared to the previous-year period.
“We think some areas may open in June, but we do not expect attendance levels to begin to normalize until there is a vaccine, or the end of the year at the earliest,” Pachter wrote in an April 27 note. “Studios have no incentive to release new movies until all theatres are open and will be reasonably well-attended, which is not likely until there is a vaccine.”
The analyst says there have been 62 movies either moved or pulled from the release slate, worth an estimated $7.2 billion. Of these films, 17 have not yet been assigned a new release date, worth an estimated $830 million. Of those, The Lovebirds, Scoob! and Artemis Fowl have been slated for streaming or VOD debuts.
“We expect this list to expand in the coming weeks,” Pachter wrote, adding the negative impact to 2020 domestic box office would be about $2.9 billion.
With Netflix adding an impressive 15.8 million subscribers across all geographies in Q1, the SVOD behemoth expects to add another 7.5 million subs in the current Q2 June quarter — or just below combined Q2 sub additions in 2018 and 2019.
“We think that Netflix will continue to thrive in a shelter-in-place environment, and our best guess is that its current and future subscribers will continue to find themselves spending the majority of their time at home for at least the balance of the current quarter,” Pachter wrote. “We can only conclude that Netflix will continue to deliver outsized subscriber additions for the balance of the year.”