Hollywood has a chicken-and-egg problem: Movie theaters need high-profile titles to attract customers, but movie studios need enough willing ticket buyers to justify releasing their $200 million movies as planned.
Both studios and theaters appear increasingly likely to end the year disappointed. About two-thirds of the nation’s cinemas have reopened following a monthslong shutdown, but weekly box-office receipts suggest much of the public harbors lingering concerns about going back to the movies. As a result, Hollywood is in danger of having to shelve a string of highly anticipated—and highly expensive—movies that studios hoped to release by year’s end.
“You can’t blame a studio or director for holding back the release of a film,” said theater owner Paul Glantz earlier this summer. Mr. Glantz is co-founder of Emagine Entertainment Inc., which operates more than 20 theaters throughout the Midwest. “You’ve got to have enough theaters open throughout the United States and the rest of the world to ensure you get the proper audience exposure,” he said despite the threat a lack of new movies poses to his business.
Hollywood’s blockbuster-heavy strategy has made coping with, and recovering from, pandemic shutdowns even harder. For years studios have been producing fewer movies, opting to bet big on event-style films such as superhero tales and other established series. Those include Walt
’s Marvel, Star Wars and Pixar franchises, plus live-action remakes of the company’s own animated classics. Comcast Corp.’s Universal Pictures has leaned on its Fast and the Furious and Jurassic Park films, while Warner Bros. has invested heavily in its DC Comics movies.
As international markets like China expanded and became more important to Hollywood’s business model, the industry settled on a new benchmark: movies that cost $150 million to $200 million to produce, with a goal of grossing $1 billion or more at the growing global box office. As major studios focus on big-budget films, streaming services like
have emerged as leaders in producing fewer mid-budget films.
Larger investments in few films means that each postponed movie represents a bigger potential hit to earnings than if studios had spread their bets on smaller-budget movies that could turn profits in a relatively limited number of theaters.
Warner Bros. attempted to resuscitate the domestic theatrical market when it began gradually opening its $200 million film “Tenet” in North American theaters Aug. 27. “Tenet” has made $29.5 million after two full weeks in domestic theaters and another $177.5 million overseas through last weekend—hardly enough to convince Warner Bros. or the rest of Hollywood that releasing movies that cost nine-figure sums to produce makes sense amid the current landscape, according to many film executives.
“You can’t do it. The economics won’t allow you to do it,” said a distribution executive at one major studio. “We can’t give [theaters] a $200 million movie if people aren’t going to come.”
Multiplexes have tried to counter capacity restrictions by allocating more screens to “Tenet,” a measure made possible due to a lack of other new films. It is difficult to say whether the film showing in additional auditoriums is translating into increased ticket sales.
Before “Tenet” had begun its second weekend in U.S. theaters, Warner Bros. was already canceling plans for its next release, the $200 million “Wonder Woman 1984,” due out in early October. “Wonder Woman 1984” will debut on Christmas Day, a week after another Warner Bros. tentpole release: director Denis Villeneuve’s “Dune” remake.
“Dune,” which was produced by Legendary Entertainment and cost about $165 million to make, might have to shift from its Dec. 18 release if moviegoers in the U.S. don’t start showing up in larger numbers, according to a person familiar with the matter.
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Disney’s “Black Widow,” another $200 million Marvel production, now sits as the next high-profile theatrical release after “Tenet,” due on Nov. 6. Yet that film is widely expected by studio and theater executives to skip to a new date. Disney’s most recent Marvel movies have all grossed around $1 billion or more at the global box office.
Disney recently canceled plans to release its $200 million “Mulan” remake in U.S. theaters, opting instead to make the film available on its streaming service for about $30. Disney hasn’t disclosed how many people have paid for the movie.
In addition to enforcing capacity restrictions and mask-wearing mandates, the theater industry is also operating without some of its biggest metropolitan markets, including New York City, Los Angeles and San Francisco.
The one high-profile movie that appears to stand a good chance of sticking to its date is the James Bond film “No Time to Die,” which is slated for Nov. 20 in the U.S. If the studio MGM Holdings Inc. follows through with plans to release the 25th Bond movie—a production that cost more than $200 million—it will be because of its faith in international theaters, not the U.S. market, said a person familiar with the matter. Recent Bond movies have made the majority of their money outside the U.S.
Consumer habits in the U.S. appear to have a long way to go before returning to pre-pandemic patterns. Even television ratings for the National Football League, usually America’s most-watched sport, have been lackluster so far.
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The near future of the international market is also far from certain, as some European nations confront a possible second wave of infections. Governments might avoid rolling back the reopening of movie theaters and other public spaces, but a rise in cases could still slow moviegoing.
That makes wagering $200 million on a single movie all the more challenging, according to “Wonder Woman 1984” producer Charles Roven. “Just when you think things are calming down in a particular market, it can flare up again,” he said.
Write to R.T. Watson at [email protected]
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