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If Theaters Can Survive the Current Pandemic, It Will Be on Different Terms

Even if major and specialty chains survive an extended shutdown, studios may have more leverage over theatrical windows than ever.

"Black Widow"

“Black Widow”

Disney

On March 12, writer-director-actress Amy Seimetz debuted her new indie film “She Dies Tomorrow” at an oddly subdued Soho House in West Hollywood. Star Kate Lyn Sheil was on hand; she portrays Amy, an anxious first-time homeowner who tells her artist friend (Jane Adams) that she is going to die the next day.

This private screening was meant to replace the film’s canceled SXSW premiere, but things have changed. Seimetz is plugging onward, seeking a buyer. “Everything’s very contagious right now,” she told the small gathering after the screening, offering guests wine but no cheese platter. “I apologize, but you should thank me.”

Kate Lyn Sheil in “She Dies Tomorrow”

It’s a very strange time. Screenwriters are turning back to spec scripts. Agents are digging into unread screenplays, since there’s no urgency to drive projects into production. Studios and streamers shut down movies, series and pilot production, from Coronavirus patient Tom Hanks’ Elvis Presley Project in Australia for Warner Bros., Disney/Fox’s Ireland shoot of Ridley Scott’s “The Last Duel,” starring Ben Affleck and Matt Damon, to Sony/Amazon’s “Birds of Paradise,” starring Rosamund Pike, and Sony/Tristar’s “The Nightingale,” starring Elle and Dakota Fanning, to name only a few.

For now, doors remain open at national movie theaters — albeit with AMC and Regal enforcing 50 percent capacity rules, to maintain social distancing — but they face an uncertain future. During the Depression, Ginger Rogers sang “We’re in the Money” to moviegoers who flocked to cinemas to be cheered by Hollywood escapism. Nearly a century later, the coronavirus pandemic means that communal experiences are just what people must avoid.

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“We need to keep having a place where people can go and get some relief,” said Ted Mundorff, president of Arclight Cinemas. “What happens to all these kids at home? If we can try to behave as normal with some enhanced precautionary procedures, than possibly it slows down hysteria.”

Hollywood is watching this weekend’s box-office results with fierce interest. So far numbers are down 6 percent over last year, but that’s a drop that can be largely attributed to last year’s blockbuster “Captain Marvel.” However, exit polls for Focus Features’ “Emma” — the Landmark Theatre chain’s strongest performer nationwide — shows a drop in the core arthouse audience of older moviegoers, the ones most susceptible to the virus. That has the potential to decimate specialty box office, which suffered a dismal 2019 outside of “Parasite.”

“Older people are scared to go out to theatres,” said one specialty distributor, who will see where the numbers are Monday before proceeding to date its slate. Landmark reported a 15 percent drop in box office last week from the week before.

People enter AMC's Studio 30 theaterAMC Theatres Odeon and UCI, Olathe, Kansas, USA - 11 May 2005AMC Theatres is buying European movie theater operator Odeon & UCI Cinemas Group in a deal valued at about 921 million pounds ($1.21 billion). AMC says, Tuesday, July 12, 2016, that the transaction will make it the biggest movie theater operator in the world. Odeon & UCI has 242 theaters in Europe. The deal will give AMC a total of 627 theaters in eight countries.
The major movie chains are much like that older audience: Their immune systems were rickety before this global pandemic sent their stock prices into freefall. The world’s biggest theatre chain, AMC, owned by China’s Wanda, is already below $3 a share. And Regal owner Cineworld has been hit by theater closings in Europe.

“If grosses are horrible, it may not be worth it to stay open,” said one distributor. At this writing, small theaters are already closing, including the Jacob Burns Center, Anthology and Pacific Film Archives, IFC Film Center, Film at Lincoln Center, film programs at the shuttered Whitney, MoMA, LACMA, and Museum of the Moving Image, the Alamo in Brooklyn, and the Nitehawk Cinemas.

Running at 50 percent capacity are the Angelika, City Cinemas, BAM Brooklyn, Film Forum, the Metrograph, and the Quad Cinema. The indie Landmark and Alamo theater chains have an advantage of being nimble and creative with their programming.

Studios are withdrawing one tentpole after another, from the James Bond movie “No Time to Die,” which called out its November 25 postponement plans early enough to save millions in advertising, to Paramount’s “A Quiet Place Part II” and Disney’s “Mulan,” which did not.

“We’ve spent, there’s no denying that,” said Paramount distribution chief Chris Aronson. Postponing “A Quiet Place Part II” from March 20 to a date still to be determined “was the responsible thing to do. Nobody knows how long this is going to go. We hope it’s shorter rather than longer. We have to do what’s right for public health and safety as well as what’s right for our pictures.”

“Emma”

Focus Features

But as the studios retract the shiny new movies that could draw audiences to theaters, they cut off their partners at the knees. Audiences won’t watch “Onward” and “Call of the Wild” indefinitely. Even if theaters stay open, months of lackluster product will take an inevitable toll. (Significantly, Disney has not moved Marvel’s “Black Widow” off May 1 — again, at this writing.)

In the meantime, AMC, Regal, the Arclight, and Pacific Theatres have instituted not only rigorous cleaning but also social distancing in movie theaters, with a few seats between each customer. Indie theaters are exploring simply booking fewer attendees at every show.

Landmark is compressing schedules and cutting back staffing hours to put more moviegoers in every show, says owner Charles S. Cohen, who said that his UK arm Curzon’s “vibrant day-and-date home entertainment arm is doing well. That will exceed the theatrical if things get more challenging over there, where people can watch first-run movies at home.”

While Tom Hanks reassures fans that he can bounce back from the virus, there’s no guarantee that movie theaters can survive a severe downturn. Some could default on rents, or go bankrupt. But will studios be willing to help their partners? While the CinemaCon mantra demands that movies be seen theaters, that model now faces a global population that has begun to hunker down at home with their hoarded supplies, where they can stream the likes of CBS All Access’ “Star Trek: Picard,” “The Mandalorian” on Disney+, “The Outsider” on HBO, and “Altered Carbon” on Netflix — which is, by the way, the one pureplay entertainment stock that has held its own in a bear market.

That said, studios still need global theatrical revenues in order to recoup their hundreds of millions of investment in tentpole pictures. Disney+ can’t bail out a Marvel blockbuster anytime soon. When the time comes for theaters to regroup and rebound, the studios may need to help exhibition get back on its feet, whether via favorable terms or some kind of share of streaming revenues.

“We have to hope they can stem the tide and endure the slowdown from a lack of content,” said Aronson. “We don’t know where it’s going. But if we do have a wholesale shutdown, when we come out of this there will be a tremendous appetite for our films’ content. We can right the ship quickly, once it comes back into theaters.”

For theaters, a studio bailout could come at a cost. That 90-day windows debate that’s been raging all this time? The studios might finally have the leverage to maneuver the big chains into shortening their exclusive theatrical windows to 70 days or even fewer. Disney is already offering Disney+ customers “Frozen II” three months ahead of its usual streaming window. In some ways, that no longer matters much. Thanks to coronavirus, streamers now have the advantage.

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