The Impact of Covid-19 on the Movie Industry by Ari F.
This year has brought tears, grief, and sadness throughout the entire country. We are almost a year into the Covid-19 pandemic, and in every corner of the United States, this terrible virus has affected someone. Usually, when we need something to cheer us up, we turn to the movies, but not this year.
The movie industry is one of the biggest industries in the world, bringing in $100 billion in revenue in 2019, with 40% coming from the U.S., according to Forbes. In 2019, the global box office generated revenue of $42 billion, while online/mobile entertainment brought in $58 billion in revenue. According to Hollywood Reporter, projections for this year show that global cinema revenue will decrease by at least 50%. Most movie theaters have been shut down since March, and do not have mobile/online entertainment options. This means big movie companies have not been able to release their movies. For example, Warner Bros. Studios have not been able to distribute movies that had been produced before the pandemic or film new movies at all. The release of some of their biggest money-making movies, like Wonder Woman 1984, has been pushed back and is now scheduled for release on HBO Max and in theaters on Christmas Day. This is a new method of releasing movies. Companies usually do not partner with streaming apps, as they fear they will lose out on money made in theaters. Movies are typically released on apps like Netflix or Amazon Prime after the movie leaves the box office. On average, it takes 2-6 months for a movie to be released on Netflix.
While the theaters and movie companies have been struggling, online/streaming companies have been doing well with everyone stuck at home. Families are snuggling up on their own couches, trying to distract themselves from what is going on in the real world. AMC, a very popular theater company, is on the brink of bankruptcy, after seeing their revenue drop 91% in the third quarter of 2020. This year, AMC made $119.5 in their third quarter, while last year they made over $1 billion, a 91% dropoff. After the economic results of quarter three, Adam Aron, the CEO of AMC stated, “Attendance has been minimal, though, of course stemming from virus concerns but perhaps more importantly due to the fact that only two major new films have been released theatrically since mid-March.”On the other hand, Netflix has soared during the pandemic. They gained 26 million new subscribers in the first two quarters of the year, when most of the world was quarantined and could not go to the theaters. They are expecting to finish 2020 with two billion in free cash flow. Free cash flow is the cash left over after the company pays all of its expenses.
Disney+, a relatively new streaming platform for all that is Disney, also benefited from the pandemic. After just a year, they have 70 million subscribers, according to Disney. After the start of the lockdowns, they gained over 20 million survivors from the second quarter to the third quarter. People around the world are trying to recreate the joy that happens in a theater. The sweet candy and the mouth-watering popcorn that is already finished before the movie has even started. The jokes that make everyone laugh, and the final battle that makes everyone’s mouth drop. Since the theaters were closed, Disney released some of their new movies on Disney+, such as Mulan, Hamilton, and Onward. Disney+ has been the only positive for Disney this year. Their parks have been mostly closed down, which is their second-biggest revenue source. The parks and theme parks brought in $16.5 billion this year, a decrease of $10 billion. Over the past years, Disney’s Media Networks, such as Pixar, ESPN, Disney+, and others, have represented their largest source of revenue. This year, without movies being filmed and released, Disney has heavily relied on the success of Disney+. Studios such as Warner Bros. have realized that the theaters might not fill up as they used to for a long time. In the last week, Warner Bros. announced that they will release all major films simultaneously in theaters and on HBO Max throughout 2021.
As the curtain closes, this year has been the worst and the best for the movie industry. The big movie companies, which produce movies, have been worried about releasing their movies and making a profit. Movie theaters and cinemas are struggling, with state rules prohibiting them from opening their theaters. On the contrary, online and mobile streaming platforms have boomed during this time. Netflix and Disney+ have gained millions of subscribers, and movie studios are planning to release their movies online. With vaccines starting to be approved, but cases of Covid-19 still rising, the future of the movie industry is in jeopardy. Will the industry find a way to pull through, or will they need some movie magic?