Major exhibitors currently share twin obsessions: the Christmas release of “Wonder Woman 1984,” and reopening the markets of New York City and Los Angeles County. For specialized theaters, all they need are the reopenings and enough distributors eager to play their awards-season titles. In speaking with a range of specialized exhibitors and distributors in both markets, there’s a sense of optimism and a sense that opportunity awaits as soon as they can reboot.
Why so cheerful?
Top Films Are Ready to Go
Many top titles went the Premium VOD/streaming route, but others like Searchlight’s “Nomadland,” Sony Pictures Classics’ “The Father,” and Focus Features’ “Promising Young Woman” are holding out for theaters. There’s also streamers that want theaters ahead of home availability, including Netflix titles “The Mank” and “Ma Rainey’s Black Bottom” as well as Amazon’s “One Night in Miami.”
The Calendar Is Optimal
Although the Oscar deadline to open was extended to February 28, films that open by December 31 qualify for the New York and Los Angeles Film Critics prizes that were critical for movies like “Parasite,” “Roma,” and “Moonlight.” A year-end opening also allows movies to enter their VOD windows many weeks before the Oscars. That’s a prime opportunity for post-nominations revenue.
Capacity Restrictions Are Surmountable
Reduced capacities reduces gross, but specialized exhibitors say there’s still enough to open. (These theaters also are less dependent on concessions than their mainstream counterparts.) It won’t allow for the sellouts that drove “Parasite,” but that level of performance is an exception. With pre-sales now the norm, core audiences willing to attend theaters for major titles could adapt to attending outside prime showtimes. Many have been planning for months on how best to block off seats, including expanded seat selection options.
Less Competition Means More Opportunity
Chain theaters might close if studios drop their holiday films, but specialized films — and the theaters that play them — could still thrive. In a normal year, top specialized titles expand at Christmas and it’s always a battle for screen space with blockbuster competition. In 2020, if those films evacuate the core specialized theaters might enjoy elevated profiles. In any event, the fate of “Wonder Woman 1984” is not their problem.
Broader audience response
Many potential ticket buyers (particularly older ones) will refrain from cinemas, but we’re seeing more top titles thrive with more diverse audiences. By the time COVID-19 arrived, “Parasite” was available on many platforms; the weeks that followed brought prime titles like “First Cow,” “The Assistant,” “Emma,” “Never Rarely Sometimes Always” (significantly, all directed by women) that built on the momentum. Older audiences were only part of their reach. That alchemy might be tricky to recreate, but the range of titles ready to play are generally closer to that broader appeal.
Much of this, of course, depends on whether New York City and Los Angeles county can reopen. Their presence is significant for all exhibitors; the country’s largest city its and biggest county represent 17 million people, or 6 percent of the population; they also generate 10 percent-15 percent of the North American theatrical gross.
For specialized theaters, the impact goes beyond numbers. Not only do their films do the bulk of their business in these markets, but they are also where awards voters and other tastemakers live.
Will New York Gov. Cuomo allow the city to open while localized hot spots exist? New York City could get a boost since theaters in the rest of the state are permitted to operate, but the city still deals with upticks in cases and it’s scarred by the devastating toll last spring; reopening is unlikely to be rushed.
Los Angeles Co. is more complicated. This week saw one day with the biggest single rise in cases in two months. Neighboring Riverside County, with 2.4 million people, went backward with tougher restrictions including reclosing theaters for at least three weeks. Unlike New York, Los Angeles authorization requires county and city approvals even after the state allows it.
At this writing, Los Angeles County’s adjusted case rate increased to 7.6 new cases per 100,000 people. According to county health director Barbara Ferrer, that number needs to go down to 7 or less, and stay there for two weeks straight, in order for the county to advance to the less-restrictive red tier that would permit theater reopenings.
As the underwhelming domestic results for “Tenet” showed, failure to perform would hasten studio and distributor flight to alternative platforms. Also, distributors have an alternative: They can satisfy critics’ groups with a one-week run in 2020 and open early next year, riding the nomination wave as they expand in March.
One exhibitor in a market not yet open, with theaters that host specialized and studio titles, remains wary; he’s seen the revenue numbers from open theaters. “I don’t see the case for opening,” he said, “until there is evidence of more demand than seen so far.” From his perspective, better to preserve cash and wait for a time when it’s possible to turn a profit.