Hollywood Is Facing an Existential Crisis

Existential questions about the future of cinema-going are nothing new for Hollywood. The rise of streaming services and the decline in ticket sales have prompted much hand-wringing over the relevance of theaters. But the coronavirus pandemic has amplified those anxieties as the industry faces an apocalyptic reality: Nearly all movie theaters are dark across North America, and box-office data aren’t being reported. Blockbusters have been rescheduled or delayed indefinitely. And, perhaps most shocking, a major studio is releasing one of its films online, bypassing theaters entirely—a line that Hollywood’s old guard has never crossed before.

Universal Studios announced last week that it would release Trolls World Tour simultaneously online and in theaters on April 10. “We hope and believe that people will still go to the movies in theaters where available, but we understand that for people in different areas of the world that is increasingly becoming less possible,” NBCUniversal CEO Jeff Shell said in a statement. Given that major chains will be closed at least through the end of April, Trolls World Tour will likely pilot a new form of wide online release, costing a hefty $20 to rent for just 48 hours. If it’s financially successful, other studios could follow suit.

Though Universal’s Trolls release is a business decision spurred by highly unusual circumstances, it’s nonetheless prompting a furious response from theater owners who recognize a looming existential threat. The National Organization of Theatre Owners (NATO), a group representing more than 33,000 screens around the country, insists that Universal’s move will be an exception, not the rule. “To avoid catastrophic losses to the studios, these titles must have the fullest possible theatrical release around the world,” NATO said. “While one or two releases may forgo theatrical release, it is our understanding from discussions with distributors that the vast majority of deferred releases will be rescheduled for theatrical release as life returns to normal.”

The messaging is clear: It makes no financial sense for movies that cost hundreds of millions to make to be released online only. But NATO’s announcement assumes that the theater industry can return to normal when the pandemic abates. For a sense of what the U.S. might face once the outbreak begins to slow, look to China: The country is only now beginning to reopen theaters after closing them in January. Even as new cases of the coronavirus have rapidly declined and the government has begun to ease social-distancing rules, citizens have so far been reluctant to go back to theaters. The 507 theaters open on Saturday (about 5 percent of the country’s cinemas) made only $4,355, according to Deadline. That’s just a few dollars per theater.

The Chinese film industry hopes to reopen all theaters by May 1, though staggered seating (spacing people out) will be implemented. Another issue will be the relative lack of new movies to show, because all major releases have been frozen. To lure patrons back, the Chinese industry is rereleasing homegrown hits of recent years, box-office smashes such as The Wandering Earth, Wolf Warrior 2, and Monster Hunt. Reportedly, Hollywood favorites like Harry Potter and the Sorcerer’s Stone will also be rolled out at some point.

It’s a nice idea—using nostalgic hits to remind audiences what they liked about going to the movies in the first place. But the coming weeks in China will demonstrate to what extent people’s desire to return to cinemas outweighs their fear of catching or potentially spreading COVID-19. A situation in which theaters were empty for the entire summer would be Hollywood’s worst nightmare, given the amount of major movies on deck that will either have to be delayed or suffer depressed box-office returns.

The biggest spring blockbusters have already been postponed: Fast & Furious 9 was bumped to April 2021, No Time to Die was moved to November, and Disney’s Mulan and Black Widow are indefinitely delayed. Paramount sold its comedy The Lovebirds to Netflix, effectively punting on any kind of theatrical release (a strategy the studio has resorted to before). The next mega-blockbuster still on deck is Wonder Woman 1984 from Warner Bros., due out on June 5, which the studio has insisted will not receive an online release. That’s an early sign that what NATO is arguing is true—that even though people are sheltering at home in search of interesting things to watch, studios have little incentive to release an expensive superhero movie to home viewers first.

Thinking optimistically, Trolls World Tour may be an aberration rather than the start of a paradigm shift, and American theaters could reopen in May, back-loaded with new movies to offer to viewers who are desperate to get out of the house. But it’s just as easy to imagine a year or more of audiences approaching moviegoing very cautiously, even if cinemas reopen, which will require further strategizing on Hollywood’s part. Anticipating that dire scenario, the director Christopher Nolan, long a champion of the theater experience, wrote an op-ed for The Washington Post underlining the human toll of closed theaters and urging studios to consider them in their release plans.

“The theatrical exhibition community needs strategic and forward-thinking partnership from the studios,” Nolan said. “Much of this short-term loss is recoverable. When this crisis passes, the need for collective human engagement, the need to live and love and laugh and cry together, will be more powerful than ever. The combination of that pent-up demand and the promise of new movies could boost local economies and contribute billions to our national economy.” Nolan is right to sound the alarm. The future of movie releases isn’t lost, but theaters and studios must prepare for a grim post-pandemic reality.