Analyst: Q2 Box Office Down 100%

When sales decline 100%, it can’t get much worse for a business. But that’s the reality facing movie exhibitors. Through May 21 of the second quarter, the box office is trending down 100% year-over-year as the industry remains shut down due to the coronavirus.

Wedbush Securities media analyst Michael Pachter expects “very minimal” box office revenue in the current quarter, with most domestic theatres likely remaining closed through June 30.

The first quarter domestic box office ended down 25.4% $1.79 billion as most theaters didn’t shutter until March. The North American box office in 2020 is trending down 58.1% compared to 2019.

“We do not expect attendance levels to begin to normalize until the end of the year at the earliest,” Pachter wrote in a May 26 note.

The analyst says theaters and studios have some incentive to release new content before a return to normal, as a theater would be able to show a single film on all of its screens thereby allowing for social distancing while still providing the studio with the opportunity to drive box office revenue.

Director Christopher Nolan’s Tenet (Warner Bros.) is poised to be the first in line to take that risk, although Pachter doubts the international espionage thriller will be able to hold its current release date target of July 17.

“Our estimates are clearly subject to change given the fluidity of the release slate and the mood on social distancing as stay-at-home orders begin lifting across the country,” the analyst wrote.

He thinks it unlikely consumers will return to cinemas with any semblance of normal before a vaccine is widely distributed. Additionally, the dearth of newly produced content may negatively impact theatrical attendance in 2021, while streaming services will be competing at the highest levels for content to bolster their offerings in an extremely competitive environment.

There are now 68 films that have been moved or pulled from the release slate, worth an estimated $7.5 billion. Of these films, seven moved to a streaming platform, worth an estimated $358 million in box office dollars. Fifteen have yet to be rescheduled or slated for streaming, worth an additional $652 million in box office dollars.

“All 15 are likely to be moved to streaming platforms, in our view,” Pachter wrote. “When taken together, we expect the negative impact to 2020 domestic box office to be $3.1 billion, only partially offset by a positive impact to 2021 domestic box office of $1.5 billion.”

Warner’s ‘Scoob!’ Fiscal Results: It’s a Waiting Game

This much is certain: Warner Bros.’ PVOD release Scoob! was a big hit on major digital transaction charts.

In its first three days of availability, the erstwhile animated theatrical release, issued May 15 for rental or purchase at a premium price, finished atop the FandangoNow, iTunes, Google Play and Amazon Prime charts.

The movie also featured prominently as the first “theater at home” releases available on Vudu and Comcast’s Xfinity Movie Premiere.

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The title, which bypassed theatrical distribution when exhibitors shuttered in March due to the coronavirus, is available to rent for $19.99, and to purchase for $24.99.

How much Scoob! has generated in revenue is anyone’s guess. That’s because unlike the traditional weekend box office tally, digital rental/retail industry numbers and how to market them during a pandemic remains a work in progress.

Universal Pictures set the bar high last month when it revealed to much media attention that its animated Trolls World Tour sequel generated $100 million in digital revenue after three weeks. Unless Scoob! tops that tally sooner, it’s a waiting game when Warner will make a fiscal announcement — if at all.

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In the meantime, Trolls World Tour continues to resonate with cinema-starved consumers stuck at home with children. The feature remains near the top podium on most charts except iTunes. Newcomer Capone, from Vertical and starring Tom Hardy as the cigar-chomping title gangster, has resonated with consumers on FandangoNow and iTunes in the No. 4 position.

Early digital release holdovers, including Sony Pictures’ Bad Boys for Life, Bloodshot and Fantasy Island; Universal’s The Invisible Man; Paramount’s Sonic the Hedgehog; and Warner’s Birds of Prey continue to sell — albeit at reduced price points.

Indeed, Bloodshot is the No. 1 seller on Charter Spectrum, while Lionsgate’s Arkansas ranks sixth. Knives Out (Lionsgate) sits in eighth on Amazon Prime.

Disney has refused to play the PVOD game, opting instead to move some theatrical releases to Disney+ or delay box office debuts until the COVID-19 dust settles. To fill the void, Disney has pushed catalog titles, including Fox’s The Greatest Showman (No. 5 on Amazon) and Tombstone (No. 7 on iTunes).

And then there’s the elephant in the room: Netflix. With the largest SVOD subscriber base in the U.S. and worldwide, new original movie release The Wrong Missy, from Adam Sandler’s Happy Madison Productions, and starring David Spade and Lauren Lapkus, ranks No. 1 on the streamer’s U.S. chart. Netflix ended the most recent fiscal period with 70 million domestic subs.

Warner Cautiously Entering PVOD Window

Warner Bros. May 15 dips its toes into the controversial premium video-on-demand waters, releasing previously earmarked animated theatrical release Scoob! directly into homes for $19.99 for a 48-hour rental, or $24.99 for digital purchase.

The movie is the only major theatrical title Warner has thus far switched from the box office distribution direct to home entertainment retail. Other titles such as Wonder Woman 1984 have had their cinema debuts pushed back.

“While we’re all eager to be able to once again show our films in theaters, we’re navigating new, unprecedented times, which call for creative thinking and adaptability in how we distribute our content,” studio boss Ann Sarnoff said in a statement last month. “We know fans are eager to see Scoob! and we’re delighted we can deliver this feel-good movie for families to enjoy while they’re home together.”

Warner is hoping the movie resonates with consumers in the home the way Universal Pictures’ Trolls World Tour did. The sequel to Trolls generated $100 million in revenue, prompting Universal to declare it would revisit PVOD as a simultaneous distribution option with theatrical.

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That announcement caused a firestorm among exhibitors with AMC Theatres (and Regal Cinema) angrily declaring it would no longer screen Universal (or any studio) movies with concurrent digital distribution.

Warner parent AT&T this week sought to head off any controversy with CFO John Stephens telling a virtual investor conference the studio remained firmly behind the theatrical window — for now.

“We’ll learn from [Scoob!],” Stephens told the MoffettNathanson 7th Annual Media & Communications Summit. “We’re interested in new ideas, whatever’s good for consumers, but we’ll continue to work with our [exhibition] partners.”

With theaters nationwide remaining shuttered due to the coronavirus and lack of new-release movies, PVOD money talks. And Warner Bros. & Co. are listening.

‘Scoob!’ Getting Virtual Star-Studded Premiere on Twitter May 15

Warner May 15 is mounting a virtual premiere event for the premium VOD release of the animated feature Scoob! via Twitter.

The Twitter #ScoobMovieNight premiere event, hosted by the big dog himself, starts at 7 p.m. ET/4 p.m. PT, and features Scoob! moments with stars from the movie, including Will Forte, Gina Rodriguez, Zac Efron, Amanda Seyfried, Kiersey Clemons, Ken Jeong, Tracy Morgan, Frank Welker, Iain Armitage, Arianna Greenblatt, Mckenna Grace and Pierce Gagnon, and director Tony Cervone. Lennon Stella will exclusively premiere an acoustic version of lead single “Summer Feelings,” while Thomas Rhett, Kane Brown and Ava Max will be on hand to showcase their newly released single “On Me.” Both are from “Scoob! The Album,” the movie’s official musical companion also arriving May 15 and available to pre-save now here.

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TikTok dance videos from the #ScoobDance challenge have racked up more than 3 billion views, according to a studio release. Other marketing includes Scoob trivia questions and a Scoob-themed PSA from Best Friends Animal Society (bestfriends.org) about helping homeless dogs and cats.

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Following the preshow, fans across the U.S. and Canada can rent or buy the feature and share Tweets about it using #ScoobMovieNight. The feature will be available for a 48-hour rental via PVOD at $19.99, or premium digital ownership at $24.99. Consumers can visit https://www.watchscoob.com to preorder a copy.

A family activity pack is available at https://www.scoob.movie/homepremiere.php

Scoob! reveals the never-before-told story of Scooby-Doo’s origins. It shows how one of history’s most famous friendships began when a homeless puppy met a lonesome young boy named Shaggy, and how the two of them joined forces with aspiring young detectives Fred, Velma and Daphne to become the celebrated Mystery Inc. With hundreds of cases solved and adventures shared, Scooby and the gang face the biggest and most challenging mystery of their careers: a plot that will unleash the legendary ghost dog Cerberus upon the world.

Warner Sticking With Theatrical Window — For Now

After Universal Pictures set off an industry firestorm announcing it would pursue simultaneous theatrical/PVOD distribution for new movies, the CFO of Warner Bros. parent AT&T told an investor event the studio is sticking with the 90-day theatrical window for now.

Speaking online May 12 on the virtual MoffettNathanson 7th Annual Media & Communications Summit, John Stephens sought to quell any notion Warner Bros. would upend industry norms as the movie theaters remain shuttered due to the coronavirus pandemic.

That said, the studio on May 15 will launch its first skipped theatrical/PVOD release with Scoob!. The movie becomes the second major animated family film after Universal Pictures’ Trolls World Tour to bypass theatrical release in favor of digital release. Trolls World Tour reportedly generated $100 million through VOD, the digital equivalent of rental. Scoob! will be available either as a digital rental or purchase.

“We’ll learn from [Scoob!],” Stephens said. “We’re interested in new ideas, whatever’s good for consumers, but we’ll continue to work with our [exhibition] partners.”

Major exhibitors such as AMC Theatres and Regal Cinemas have vowed not to screen any theatrical movie concurrently available to digital channels at launch.

Universal Grabs ‘Lego’ Movie Rights From Warner Bros.

Universal Pictures April 23 announced that it has entered into a five-year exclusive agreement with the Lego Group to develop, produce and distribute theatrical releases based on its intellectual property and original ideas. The announcement was made by Donna Langley, chairman of the Universal Filmed Entertainment Group, and Jill Wilfert, head of entertainment at the Lego Group. Wilfert will serve as producer on all Lego projects developed and released by Universal.

Lego, which had licensed its IP to Warner Bros., reportedly moved to Universal after a planned Warner movie didn’t materialize. Lego branded movies include The Lego Movie, The Lego Batman Movie, The Lego Ninjago Movie and The Lego Movie 2: The Second Part, which have collectively grossed nearly $1.1 billion at the worldwide box office — for Warner Bros., which retains rights to those titles.

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Universal and Lego have previously collaborated on the television special Jurassic World: The Secret Exhibit and the 13-episode miniseries Lego Jurassic World: Legend of Isla Nublar.

“The Lego System in Play gives people the ability to build worlds and create stories that they carry throughout every phase of their lives,” Langley said in a statement. “To partner with such an iconic brand that remains relevant and is constantly evolving allows for creativity in storytelling.”

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Warner Bros. Q1 Operating Profit Declines 55%

With studio operations shuttered for nearly a third of the quarter due to the coronavirus pandemic, Warner Bros. April 22 reported operating income of $249 million, down about 55% from operating income of $547 million in the previous-year period. Revenue from theatrical product dropped almost 27% to $1.1 billion, from $1.5 billion last year.

Television content revenue increased 9% to $1.77 billion from $1.6 billion. Home entertainment and video games saw revenue drop less than 10% to $365 million from $399 million during the previous-year period.

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Oscar-winning Joker remains the studio’s top-selling packaged media of the year.

Warner, like other studios, has pushed back release of tentpole titles such as Wonder Woman 1984 to later this year or into 2021.

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Warner Plans Digital Release for ‘Scoob!’; Was Set to Be First Big-Screen Animated Scooby-Doo Movie

With movie theaters still closed, Warner Bros. is releasing the upcoming animated feature film Scoob! directly to home viewers.

The film — the first full-length animated Scooby-Doo adventure intended for the big screen — becomes available May 15 for premium digital ownership and premium video-on-demand (PVOD) in the United States and Canada.

Ann Sarnoff, chair and CEO of Warner Bros., said in a statement, “While we’re all eager to be able to once again show our films in theaters, we’re navigating new, unprecedented times which call for creative thinking and adaptability in how we distribute our content.

“We know fans are eager to see Scoob! and we’re delighted we can deliver this feel-good movie for families to enjoy while they’re home together.”

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Scoob! will be available for a 48-hour PVOD rental for $19.99 or premium digital ownership for $24.99 beginning May 15, The title will be available on participating digital platforms.

Scoob! reveals how lifelong friends Scooby and Shaggy first met and how they joined with young detectives Fred, Velma and Daphne to form the famous Mystery Inc.

“Now, with hundreds of cases solved and adventures shared, Scooby and the gang face their biggest, most challenging mystery ever: a plot to unleash the ghost dog Cerberus upon the world,” according to a Warner Bros. press release. “As they race to stop this global ‘dogpocalypse,’ the gang discovers that Scooby has a secret legacy and an epic destiny greater than anyone imagined.”

Warner’s ‘Birds of Prey’ Now Available for Digital Rental at $5.99

Following the early availability of  Birds of Prey and the Fantabulous Emancipation of One Harley Quinn two weeks ago for digital purchase at $19.99, Warner Bros. has made the recent theatrical release available for digital rental at $5.99 across all digital platforms.

The anti-heroine ‘R’-rated DC Films movie starring Margot Robbie opened theatrically Feb. 7 and generated about $200 million at the global box office before theaters went dark in mid-March.

Consumers are still able to purchase the film digitally for $19.99.

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Birds of Prey was released early for digital purchase on March 24 as the coronavirus pandemic began forcing theaters to shutter operations to avoid possibly spreading the disease.

Universal Pictures’ recent theatrical releases The Invisible Man, The Hunt and Emma, along with Sony Pictures’ Bloodshot, also were released to home audiences early, but for rental only at $19.99.

Not surprisingly, Birds of Prey is No. 1 on iTunes.

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The Invisible Man will become available for purchase through digital retailers on May 12 — at a non-premium price — and on 4K Ultra HD, Blu-ray Disc and DVD on May 26.

Warner Rolls Out New ‘Wonder Woman 1984’ Poster

With the planned June 5 theatrical launch of Wonder Woman 1984 delayed to Aug. 14, Warner Bros. has updated the movie poster and also is issuing an animated digital poster.

In a social media post, the movie’s star, Gal Gadot, said she is looking forward to a brighter future for people, society and the power of cinema.

“In these dark and scary times, I am looking forward to a brighter future ahead,” Gadot tweeted. “Where we can share the power of cinema together again. Excited to re-date our WW84 film to August 14, 2020. I hope everyone is safe. Sending my love to you all.”

In a separate tweet, the film’s director, Patty Jenkins, reiterated the studio’s support for a theatrical debut rather than offloading the title to retail channels, including transactional VOD and SVOD.

“Wonder Woman 1984 was made for the big screen and I believe in the power of cinema. In these terrible times, when theater owners are struggling as so many are, we are excited to re-date our film … in a theater near you, and pray for better times for all by then.”

The new Wonder Woman poster (courtesy Warner Bros.)