Online movie premiers – Sitting on a comfortable sofa in your home, while wearing your jammies and eating your favourite food, might be the most perfect scenario of watching a movie for some people. But amidst the pandemic, this has become the default situation for everyone.
With the rise of COVID-19 pandemic, the cinema and movie theatre industries were some of the most affected ones. Facing complete shutdowns and losing millions of dollars in business with no sign of recovery.
It naturally caused people to shift towards online streaming services and OTT platforms for their entertainment. But with the pandemic still raging and not anywhere near the end, questions about legitimacy and dominance of online streaming services over the cinema corporation giants began surfacing.
For decades, these theatre corporations have ruled this part of the entertainment industry, enjoying premium exclusivity that no other platform had. For example, till the pandemic, any blockbuster film to be released had to run in cinemas for at least 90 days before they could run on any other platform like on-demand videos or streaming services.
This ensures the movie theatres a financial safety net due to which the industry thrived. But the current pandemic has shifted the tides. As social distancing, refraining from enclosed and crowded places and ban on public gathering has been instrumental to curb the spread of virus, this means that cinema halls have to remain closed. Which in turn means no movie premiers, which in turn means no revenue and hence no money for movie theatres or production houses.
Although the movie theatres have no plausible alternative, the production houses in-fact do have one. Switching to online streaming platforms.
Online platforms like Netflix, Amazon Prime, Hulu, HBO Max, Peacock, to name a few, have been active for the past few years, releasing content and movies online. But the pandemic has brought them to the forefront.
It was reported that Netflix added more than 10.1 million subscribers in Q2 of 2020, that was the beginning of the pandemic. And this number has only increased since then, eventually causing them to cross the 200 million subscriber count by the end of 2020.
Tom Hank’s new film “Greyhound”, a $50 million budget film bypassed the theatres and was released directly on Apple TV+. According to Apple, the opening weekend for the film stood toe to toe with the best opening weekends of theatres.
Disney has made their future plans regarding their Disney+, online streaming service platform, public. Stating to spent around $14-$16 billion a year on streaming by the year 2024. They also said that they hope that by that time their subscriber count would increase to almost 260 million subscribers.
Moreover, the Warner Brothers have also announced that all of their movies in 2021 will be released simultaneously on both US theatres and Warner’s HBO Max subscription. The list of movies to be released by Warner Brothers are Matrix 4, Dune, The Suicide Squad to name a few.
All of these online streaming platforms, although geo-blocked, can easily be viewed in any other part of the world if you have a good VPN subscription. For example, if you are living in Canada, these VPNs will allow you to watch movies on all geo-blocked streaming services in Canada & get to stream HBO Max, US Netflix, Hulu, Peacock TV etc. So that you can watch the movies on the same date of release from any part of the world.
So, does this mean that this is the end of cinemas and movie theatres?
Many people don’t believe this and their reasons are backed by experiences of past and academic studies.
One school of thought believes that the online streaming services and OTT platforms do not interfere with revenue of box office. This claim is backed by the study that was carried out between the years 2015 – 2018 in South Korea. In this time period the Hollywood studios reduced their exclusive theoretical releases from 90 days to 30 days.
When the data for both exclusivity windows was compared, it was found out that the difference in revenue was around 0.8% which was insignificant. The interpretation of this data (along with correlation with other digitalization scenarios e.g. effect of kindle sale on hardcover books sale) was such that instead of affecting other industries, the new platforms targeted a new untapped audience and customer base that is made available to the market. Which is beneficial for both the industries.
Another school of thought believes that the current dip in the revenue of theatres and cinemas is due to an obvious pandemic. But this is not the first time that cinemas and movie theatres have experienced such dips.
Previously, in the time of World Wars the cinemas had to close down, but soon jumped back when the war was over. Same was the scenario when televisions were invented. Many people believed that with a device that broadcasted everything directly to your homes, people would abandon movie theatres. But the cinemas withstood this test of time as well.
Similarly, this is not the first pandemic that the movie industry has faced. Previously the Spanish Flu had more or less the same effect on the industry as covid-19 has currently. Social distancing and refraining from social gatherings was necessary then too. The industry did experience a dry patch, but it skyrocketed in nearly 1.5 years after the pandemic was over.
Cinema is more than any other industry, it is an experience. Mainly for the purpose of socializing. As long as there are birthdays, dinners, anniversaries or any social gathering cinemas will remain valid because humans are social animals that yearn for social contacts and experiences like these.
But having put all sides of an argument it is too early to predict what the future will hold. It can end up in any one of these possibilities or it might surprise us and end up as a new possibility altogether.
Only time will tell. Till then stay home and stay safe.