With the nation’s movie exhibitors either shut down and or hamstrung by COVID-19 safety protocols, the industry is eyeing fiscal ruin as studios push back major releases until next year and wary moviegoers stay home.
Speaking Oct. 15 on a virtual panel at the 2020 Milken Global Conference, Donna Langley, chairman of Universal Filmed Entertainment Group, and Ann Sarnoff, CEO of WarnerMedia Studios and Networks Group, were asked if the studios would consider acquiring financially distressed theaters after a federal court in August struck down the 1948 Paramount Decrees abolishing studio ownership of movie theaters.
“We have no plans to do that currently,” Langley said, sharing a sentiment echoed by Sarnoff, who said “We have no plans either.”
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The executives’ unanimous responses underscore just how far exhibitors such as AMC Theatres and Regal Cinemas have fallen. It was just a year ago that the theater industry generated $11 billion in revenue — a tally that is projected to plunge 80% in 2020. Now, Regal has re-shuttered all North American and U.K. screens indefinitely, and AMC Theatres parent AMC Entertainment announced it would run out of cash by the end of the year without more borrowing.
“I’m kind of an armchair sociologist and I believe people want to have communal experiences and especially with certain genres,” Sarnoff said in a nod to select tentpole titles such as Wonder Woman 1984, which is still slated to release in theaters on Christmas Day — and multiple delays.
“We’re big fans of the exhibitors,” Sarnoff said. “They’ve been good partners of ours for many decades. We’re rooting for them. I know it’s tough sledding right now. I’m hoping they come out on the other side, probably even stronger.”
Langley said Universal also remains committed to theaters despite Universal Pictures more proactively embracing premium VOD and transactional VOD than any other studio. Indeed, Universal this summer succeeded in getting AMC Theatres to agree to a 17-day theatrical window in exchange for sharing PVOD revenue.
“It took Covid-19 to demonstrate that it is not cannibalistic but it is, in fact, additive,” Langley said of PVOD. “It will enable us to continue to make movies and put them in theaters.”
Sarnoff said Warner Bros. has grappled with the concept of early release PVOD and digital retail, saying that doing so might seem an easy option, when in reality it is messing with tradition.
“It’s not so easy as it’s happening, because oftentimes these are new moves that you’re making so you have to think about all of the constituents,” Sarnoff said. “You have to think about your fans and what they want, and predict what the results are going to be without any market data.”