The Effects of Covid-19 on the Future of Distribution Models
By Ben Spaeth
Photo: The Print – Source
It’s no secret, Covid-19 has had a major effect on box office numbers. In 2020 alone, box office sales dropped 80% and were the lowest in 40 years. However, 2021 saw the box office bounce back with revenues rising 78% from last year despite ongoing lockdowns. Although, this isn’t to say the box office has recovered. Sales are still far from 2019 numbers.
The pandemic has forced studios to begin using more unorthodox release models. With companies like Warner Bros. choosing to release their films on their streaming platform, HBO Max the same day they release in theaters and Disney selectively choosing which films will solely be in theaters and which will be released behind a paywall on Disney+ along with a theatrical release. Initially theaters were turned off by this dual release model, citing decreased ticket sales, but they eventually gave in and showed the films anyway.
As to whether or not these models have directly led to a decrease in box office sales is hard to say, but many believe that Warner Bros. harmed its box office numbers by doing same day premieres on HBO Max. It’s also worth noting that none of these subscription services are free. The pandemic has given streaming services high profile content that they wouldn’t otherwise have. While new subscribers might not have been enough to initially make up for lower than usual box office numbers, overtime the monthly paying subscribers may make up the difference.
The bigger factor at hand is how comfortable audiences feel about going to the movies. Unfortunately for film distributors, this seems to vary week to week. With each new variant and the rise and fall of covid cases, it seems like the only way to ensure box office success is to have Spider-Man in the title. Omicron in particular may be a problem for theaters as its high transmissibility has led to record setting covid cases. Unfortunately though, it seems covid will reach the endemic level and Americans will have to live with it as an everyday part of their lives. With Dr. Fauci saying that eventually Omicron will “find just about everybody.”
How will film distributors approach the eventual return to normal? This remains unclear. The main question distributors have seems to be is, is there a demand for non-tentpole big budget movies in theaters? At this point in time, the answer is no. Genuinely great films with lower marketing budgets have been getting swept under the rug by audiences. Although, one could see a situation where word of mouth advertising returns as box office numbers steadily improve, the current state of the industry may force these films onto streaming platforms rather than risk losing money on a wide release.
This may lead to a situation in which the only films that are allotted theatrical releases are pre established IP’s that studios know will generate revenue. Personally, I would hate for this to be the case. I’ve always loved the theater experience and I’d like to be able to see a wide variety of films in theaters in the future. That being said, I also appreciate the convenience streaming platforms provide. I myself have taken advantage of several HBO Max instant releases out of fear of possibly getting covid from going to the theater.
It appears though that a new model has emerged. Warner Bros. announced back in early 2021 that it will not continue its dual release model going into 2022, but will instead put films on HBO Max 45 days after their theatrical release. Paramount Pictures is also putting their films on Paramount+ 45 days after they hit theaters, with premium video on demand being available 17 days after the initial theatrical release. Before the pandemic, theaters were given 90 days of exclusivity. The halving of exclusive theatrical release time could be a sign of the beginning of the shift over to streaming as the primary method of film distribution. At this point though, this move seeks to appease theater chains who were hit the hardest by covid and feared that they would have to compete with streaming services going forward. This model may end up proving to be effective as studios may see a decline in piracy. During Warner Bros.' same day premieres, pirates were ripping off films from HBO Max because it provided them higher quality versions of the film that they otherwise wouldn’t have access to. While the 45 day window won’t stop piracy, it will significantly limit the amount of quality pirated versions of films. Although, as the pandemic continues, people may flock to piracy because they fear being exposed to covid, but they want to avoid spoilers for popular films.
Predicting the future of film distribution is a tricky task, but all signs seem to point to hybrid release models. Streaming may become a bigger focus as time goes on, but let's not forget that 2019 had the second highest yearly box office ever. While audiences certainly have been getting more accustomed to being able to stream the latest movies from their home, there are still plenty of moviegoers who will want to go to the theater. If the box office manages to return anywhere near pre-pandemic levels, the streaming taking over may be kicked down the road.