How COVID-19 Impacted the Film Industry Post-Lockdown
The ongoing COVID-19 pandemic has served as a major disruption to the entertainment industry, among others. An industry that was already chock full of competition faced the obstacle of government lockdowns. People were advised to stay home to help prevent the spread of the deadly virus. With more people home, what did this mean for the traditional cinema box office? How much revenue was generated for the film industry in 2020? How has COVID-19 impacted the film industry?
Many industries reported a loss of revenue and other negative impacts of the pandemic, such as increased competition and labor shortages, for example — and the film industry is no exception.
We’ll discuss the state of the post-lockdown movie industry, the current performance of theatres, and what the future holds for the entertainment industry.
COVID-19’s Long-Lasting Impact on the Box Office
Many factors led to the downfall of the box office and film industry in 2020. The Motion Picture Association (MPA) released its annual THEME report, detailing the grim reality many theaters, production companies, and moviegoers had to endure.
The report contained many staggering figures and facts that highlighted the negative effects of the pandemic. Here are some of the key takeaways from that report:
- Box office revenue in 2019 was higher than in previous years. Still, revenue sharply decreased in 2020 when movie theatres either temporarily closed or permanently shut down.
- Blu-ray, DVDs, and rentals also decreased, totalling $7 billion compared to $14.9 billion in 2016.
- The number of movies being released in theatres declined 66% in 2020.
- Movie theatre attendance hit a low of 240 million compared to past years, which were well over 1 billion for decades.
The most obvious reason for these declines is that theaters were forced to close — some were able to stay afloat until restrictions were lifted, while others permanently shut down. Some claim that movie theatre closures were inevitable, and the pandemic merely accelerated this trend that was yet to emerge.
The Growing Popularity of Streaming Services
Streaming services became household necessities during the pandemic. It was more common to see someone streaming a movie on their smartphone than purchasing a ticket for a traditional movie theatre experience.
However, the popularity of streaming services also means traditional movie theaters, rental companies like Redbox, and DVDs all had to suffer the consequences of streaming’s growing popularity.
During the pandemic, more streaming services emerged, such as Paramount+. Other established services like Disney+, Netflix, and Amazon Prime Video saw major increases in subscriptions from customers.
It’s no surprise that this occurred — the average consumer spends about 15% more on streaming services than in 2018. With people home due to state mandates, it was only a matter of time until streaming became the new norm. The total number of streaming service subscribers surpassed 1 billion in 2020. That number will likely continue to grow in the coming years.
The Comeback of the Cinema Box Office
It’s unclear what comeback strategies are in place for the organisations in the film industry. Professionals in the industry must reflect and understand how future disasters could potentially impact its operations. Every sector has lessons to learn as they shift focus to making an economic recovery, and the film industry is no exceptions
Movie theatre chains, production companies, and streaming services need to work together to recoup the losses that resulted from the pandemic.
As for the traditional box office, some production companies, such as Warner Brothers, decided that the future is digital. It announced that all of its 2021 films would be released on HBO Max, the popular streaming service, the same day as they’re released in theatres.
However, there’s one caveat: the 17 films slated for release in 2021 will only be available on HBO Max for a month. After that, they’ll only be available in theatres.
Take AMC Theaters, for example. The extremely popular movie theatre chain is optimistic about the future. AMC CEO Adam Aron thinks with restrictions being lifted and vaccinations becoming widely available, moviegoers will return to theatres. As of December 2020, AMC resumed operations and operated at a 67% capacity for its domestic theatres.
The Future of the Film Industry: 2021 and Beyond
All of this shows how the pandemic completely upended the film industry’s potential growth. Before the pandemic, the industry’s future looked bright.
While the pandemic certainly caused negative effects, it will likely take some time for the industry to recover fully. With more people getting vaccinated, the goal is to shift towards herd immunity and ultimately get people back in theatres to enjoy the latest movie releases.
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