The pandemic paralyzed the work of movie theaters around the world, starting the war between large chains and film companies. And the trigger pulled Universal (more precisely, NBCUniversal) Faced with the closure of cinemas, studios began to sort out options for preserving at least part of the revenue. Someone decided to transfer releases, but with the already released films this trick could not work.
As a result, it was decided to abandon practice when digital and physical copies of tapes became available for purchase a few months after theatrical releases. This is about “Blobshot“from Sony, cartoon”Forward“from Pixar and so on.
With Universal, things are a little more complicated. Yes, premiere “Fast and furious 9“and many other projects were transferred, as well”Invisible Man“managed to recapture part of the costs, and then went to streaming services. But at the time of the onset of the crisis, the cartoon studio Dreamworks “Trolls: World Tour“Already released in a number of markets.
Therefore, a non-standard decision was made: together with the release in the USA, the tape was launched simultaneously not only in movie theaters, but also on digital platforms. In reality, this meant that “Trolls 2” was shown only on streaming venues, because cinemas were closed by that time.
A similar move paid off for the film studio. In the first three weeks of showing on digital platforms in the United States, Trolls: World Tour raised more than $ 100 million. This is a solid result, given that the first part for the same period in theaters raised $ 116 million (in total, the cartoon earned $ 347 million in world markets).
Representatives of Universal, who, against the backdrop of the crisis, were forced to borrow four billion dollars, admitted that the financial performance exceeded the expectations of the studio’s management, demonstrating the value of the strategy for producing films on all platforms at once.
“As soon as the cinemas reopen, we expect to release films simultaneously in two formats,” the company said.
This statement has become a bomb that could forever change the film rental market. Universal decided to break the status quo, which infuriated movie theaters. In particular, a large American network AMC Theaters announced a boycott of future studio releases.
Hochma is that this network of cinemas is on the verge of bankruptcy, and such a demarche on her part does not look like the smartest step. However, the network joined the boycott. Regal cinemas, demanding that the arrangements for the release window be maintained and accusing Universal of violating good business practices.
“No one should forget that the theater side of this industry brought a record revenue of $ 42 billion last year, and the share of film distributors amounted to about $ 20 billion,” the statement said.
The pandemic affected many areas of life, but it was the entertainment industry that became one of the main outsiders. Suffice it to say that studio revenue Disney hit 91%. And even a decline in incidence will not lead to a rapid recovery of the industry. Scientists do not rule out a second wave of infection in the fall, so many restrictions on their appearance in public places will continue.
Therefore, movie theater owners are now in a panic. Obviously, there is no question of any quick opening of the halls. Restrictions on social distance will be introduced, which will exclude cinema occupancy.
We must remember the problems of cartoons, which is a serious test not only for Disney, but also Universal, which controls animation studios Dreamworks and Illumination. Conscious parents are unlikely to want to put their children at risk by sending them to shopping malls with movie theaters.
The situation in Russia is no better. As stated by the head Cinema Owner Associations Oleg Berezin, the losses of Russian cinemas can reach 50 billion rubles in the event that quarantine measures in the country are not lifted before the end of summer.
The expert cited detailed loss figures. So, 20 billion are a share of box office receipts for the year, another 20 billion will be lost to the industry due to stopping food sales, four billion on leases, and six billion on salaries to employees.
The numbers voiced by Berezin are higher than previously reported. At the end of March, companies represented in the event market of Russia (museums, cinemas, exhibitions and so on) estimated their losses at 50 billion rubles. Therefore they asked for a cabinet Mikhail Mishustin consider providing benefits.
Adds fuel to the fire and Disney. According to official documents, revenue Mickey mouse dropped to 18 billion dollars. Net income fell 91% from $ 3.53 billion to $ 260 million.
But the company believes that they can survive a difficult period due to the strength of brands, content and the resounding success of the streaming platform. Disney +. Revenues in the direct sales segment grew from $ 1.1 billion to $ 4.1 billion – precisely due to Disney + and Hulu.
Directly Chairman of Disney’s Board of Directors Bob Iger reported that the studio does not exclude the possibility of transferring the premieres of some cinema releases to Disney +. We are talking about small-scale projects – large IP (films Marvel “star Wars“and so on) will not be taken from cinemas.
The studio has already refused to rent the controversial film “Artemis Fowl“whose trailers were perceived negatively. Relevant candidates for departure are also”Ivan, the one and only“and the Pixar cartoon”Soul“
What is happening should not surprise anyone: the pandemic opened ahead of time a long-formed boil. Due to the rapid development of streaming services, more and more people do not see the point in going to the cinema, where they have to put up with crying children, buried in the phones youths, champing adults and snoring old people.
A certain contingent, in principle, is not ready or cannot get to multiplexes. For example, people with disabilities, who eventually have to wait an additional several months until the licensed version is released. Well, or resort to illegal downloading from the network.
Due to the race of budgets, the range of affordable cinema has been greatly reduced. In the early 2010s, the budgets of large films grew several times. For the tape to even recapture production costs, it needs to collect at least two of its budgets, because cinemas take about 50% of the fees (interest may vary depending on the agreement). Costs for PR are generally put in a separate category, and they can come close to the costs of the tape itself.
In such conditions, studios try to produce films for the widest possible audience, with a rating in the area PG-13 (with rare exceptions). At the same time, everyone is trying to make their movie franchise: this strategy allows you to create a loyal audience that will consistently go to every part of the endless series. As you can already understand, the ideal example is products Marvel studios.
Other companies are trying to copy the formula, but not everyone succeeds, because business leaders want everything at once, forgetting that the Marvel cinematic universe has been creating its foundation for several years. So, Universal was able to repeat the focus with the series “Fast and furious“but she failed at the start”Dark universe“
If the studios have no cinema universes, then they rely on proven schemes: reboots, remakes, film adaptations, and so on. In this atmosphere, there is practically no room for creativity, and any film of the same Christopher Nolan perceived as a breath of fresh air.
Some genres have no place at all. It’s about 2D animation that was killed by large studios. A textbook example is “Treasure Planet“from Disneywhose premiere was deliberately placed in an unsuccessful release window, and effective managers used the failure as an argument for finally switching to 3D animation.
As a result, 2D animation has almost no chance, it almost completely went to television. There are practically no large projects, regional works can survive (for example, the products of a Russian studio “Mill“) or physical media releases (works Warner bros Animation) And here digital platforms come to the rescue.
So, last year it was on Netflix released a wonderful cartoon “Klaus“who refused to sponsor major film studios. A spectacular and bloody action movie was recently released there.”Tyler Rake: Rescue Operation“which in the era of dominance of PG-13 would have problems with payback in cinemas. The streaming service sponsored the monster work Martina Scorsese “Irishman“whose budget has exceeded the astronomical $ 200 million due to the stubbornness of a conservative director.
That’s what scares movie theaters. By paying a monthly subscription, a person gets access to a huge amount of content, among which he can find suitable projects for himself. This is a chance for “unpopular” genres to shoot, although not all directors share this position, believing that their work may be lost in the stream.
In fact, now we are witnessing a repetition of events that unfolded in Hollywood in the late 1950s of the last century. Then the film studios were frightened by the development of television, rushing to make absurdly expensive historical canvases, and also introduced a new image format. The result was a resounding failure of the film “Cleopatra” with Elizabeth Taylor.
The cause of the crisis was also the policy of McCarthyism, when a huge number of figures were included in the Hollywood Black List as “communists”. Many talented people were left without work, and even the demarche from the screenwriter Dalton Trumbo, who managed to break the system, could not normalize the situation. McJartism has now been replaced by SJW adherents and the movement #MeToo.
However, there are differences. So, not everything is alright with streaming platforms. Now we are at the center of a real war, when large companies are trying to create their own platforms and attract the audience. There is Netflix, HBO Max, Disney +, Crunchyroll, Hulu, CBS All Access, Amazon prime, Peacock, Apple TV +, Air force tv, YouTube Premium, Ivi.ru, Amediateka, Movie Search HD and so on and so forth.
As a result, everyone suffers: having such diversity, the viewer is lost, and his wallet is not rubber. And either he will eventually choose one or two platforms, or even go to illegal repeaters, which also create their underground streaming platforms. The downside is regional restrictions, which automatically cut off part of the potential audience. Fierce competition will lead to the fact that not everyone will survive.
Already now we can talk about outsiders who could not cope. For example, the CBS All Access platform was unable to attract a sufficient audience, and due to funding problems she had to sacrifice content (“Star Trek: Picard“in Canada, you can watch it through Amazon Prime.) Warnermedia abandoned the platform DC Universe, canceling part of the projects, and part – including in the package HBO Max.
Only the one who offers the greatest volumes of content can survive. That’s why Disney bought the studio. 20th Century Fox. But streaming platforms still can not be infinitely measured by budgets. Yes, they have flagship projects, but no one will be scattered by hundreds of millions for a couple of projects if you can make 10 for the same money.
In these conditions, cinemas try to put sticks in the wheels of competitors in every possible way, which sometimes reaches the point of absurdity. For example, this is a Netflix war with film shows and American Academy of Motion Picture Arts and Sciences. The latter dispute the need for awarding films to the company, claiming that they allegedly relate exclusively to television content.
Even Steven Spielbergwho collaborates with Apple, claims that the tapes coming out on streaming platforms should be spinning in movie theaters, otherwise they cannot claim an Oscar. As a result, Netflix had to invest in a movie theater The egyptian theaterto formally meet the requirements of academics.
“If you shoot for television, then you make a television film … If it’s a good show, then you deserve an Emmy, but not an Oscar. I don’t believe that films that were rented for less than a week in a couple of movie theaters meet the requirements Film academies, “said the master.
So what will come next? Already, it is obvious that the boycott from the cinemas of Universal tapes is a failure in advance. It is still unclear how the industry will recover after the pandemic, and the studios want to minimize losses. In addition, NBCUniversal is now launching its own platform for online shows, called Peacock.
Therefore, the simultaneous release in theaters and digital services is the most logical option. There is no talk of a complete rejection of the first rental option, for who wants to give up such a fat piece of income? The positions of the networks in negotiations on the share of fees will also weaken: having their own online platforms, many studios will be able to control cash flows themselves.
But streaming services have a problem. This is not only a war for the audience, but also a shortage of content. Quarantine affected the industry in the same way as film studios. So far, there are enough TV shows and films from the warehouses, but this will not last long.
I would also hope that the era of super-expensive blockbusters in movie theaters will come to an end. There are serious doubts that the current model will be effective in the new reality. It is much more logical to start lowering bloated budgets, taking into account the specifics of the work of digital platforms.
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