Cinema and Streaming – A New Battle Ground
In 2019 UK cinemas took a whopping £1.255 billion at the box office, up 25% over the previous decade, as the twenty-first century big screen experience held its own against Netflix, Amazon Prime and Apple TV.
In 2020 that dropped to a ‘mere’ £296 million. Three quarters of that came in the first two months of the year.
For over a year, UK cinemas were effectively shuttered. Car parks empty. Popcorn machines quiet. Buckets of Coca-Cola dry.
On 17th May 2021 indoor cinemas were finally allowed to reopen. COVID cases were at their lowest for eight months and maybe, just maybe, we had this virus on the run.
The big question... Would the draw of the big screen experience outweigh the concern of sitting for two hours in a room of strangers? How comfortable would we all be to return to the UK’s cinema screens?
The industry has not disappointed, with major releases hitting the big screen most weeks.
While there have been rays of sunshine, it appears that the clouds have yet to clear. A recent BBC report compared the initial box office return of some of this year’s biggest films with their predecessors, it tells a consistent story.
|2021 Film||Revenue||Previous Film||Revenue|
|Black Widow||£18.2M||Spider-Man: Far From Home||£37.3M|
|Fast and Furious 9||£16.3M||The Fate of the Furious||£30.4M|
|The Suicide Squad||£10.8M||Suicide Squad||£33.6M|
Box office revenues are around 50% of pre-COVID levels. But, look beyond COVID and there may be another factor at play...
Traditionally, the movie industry can be broken in to three segments:
Movie Production - Financing and creation of films, often by movie studios.
Movie Distribution - Connecting films to cinema networks, streaming services and DVD markets, and promoting the film to potential viewers.
Movie Exhibition - Displaying films to viewers in cinemas / movie theatres.
While the figures are somewhat opaque, movie exhibitors may negotiate a 40% - 50% take of box office. When only 50% of Hollywood films actually making a profit, cutting movie exhibitors out of the equation could seem an attractive option for movie producers.
Take a look at these streaming release dates and you may conclude that some producers certainly think so.
|Film||Cinema Release Date||Streaming Release Date|
|Black Widow||7th July||9th July|
|Fast and Furious 9||24th June||30th July|
|The Suicide Squad||5th August||TBC|
Traditionally, streaming releases would happen after a movie had maximised its cinematic run. Not now.
Are movie producers being forced to make their content available for home streaming because we aren't yet comfortable going to the cinema, or, are fewer of us going to the cinema because we can now watch major new releases at home?
Black Widow star Scarlett Johansson has made her view clear, suing Disney for breach of contract, claiming that the early release to streaming has impacted her box office revenue share.
The reality is probably a combination of the two. While many are relishing their trip to the cinema, others are breathing a sigh of relief and pressing ‘download’ in their own home.
In the meantime, according to the BBC, cinemas said they were "very pleased" with the current figures and "pretty confident" they will get back to previous levels.
But, how quickly?
The remainder of 2021 is packed with blockbuster releases, but this is the bellwether that everyone is waiting for...
In the meantime, wherever you watch your movies, we hope that you are enjoying your two hours of escapism.
We all need them.
Update: It seems there is still a lot of nervousness amongst movie producers. Just as we published this article, Paramount announced delays to both Top Gun: Maverick (now May 2022) and Mission: Impossible 7 (now September 2022).
Update 2: As of 11th September, Disney has announced that all of its remaining 2021 releases will enjoy a dedicated cinema release before they are available to stream. Welcome news for movie exhibitors!
Adam and the Art of the Movies team.