In an unprecedented move, US studio Universal Pictures is offering its current theatrical releases to on-demand services, making them available at the same time as their theatrical release as a response to the COVID-19 outbreak.
The films in question for now are The Invisible Man and The Hunt as well as Emma (which is being distributed by Focus Features), and it applies to any country where the films are on release. The suggested price is $19.99 for a 48-hour release, which is relatively high. The next movie will be the Universal/Dreamworks animation Trolls World Tour, scheduled for US theatrical release on 6 April 2020. This tactic does not apply to Dolittle, which released a while ago to disappointing results and will follow a normal route into non-theatrical windows.
This comes at a time when AMC has closed all its cinemas in the USA, and Odeon, Everyman, Cineworld and Picturehouse have all closed their UK and Ireland sites until further notice. This follows on from cinemas being shut across Europe as part of the social distancing measures that are being put in place by governments and health authorities. In Canada, Cineplex and Landmark have both shut all sites as from Monday 16th March for the foreseeable future.
In effect, but with extenuating circumstances, Universal is unilaterally breaking the theatrical window and offering day and date films in cinemas and on-demand. However, given that cinemas have been shut down in many countries until further notice, this is more like switching the release strategy to favour on-demand first before being released in cinemas at some date as yet unknown or even moving to releasing in digital only.
In the short term, cinemas have more immediate concerns such as staying in business while their venues are shut, but cinemas will be worried about two main things with this latest move.
Firstly, maintaining the theatrical window is a red line for cinemas, and has led to product boycotts and fierce disagreements in the past. The cinema exhibition sector is often under pressure on this topic, most recently from Netflix’s stated aim to release day and date, but a common resolve amongst global exhibitors to stand together has kept the issue at bay. There may be a fear that other studios will follow this move and if so, will they seek to make this the ‘new normal’ once the epidemic has passed thus breaking the window long-term. As we have shown in the past, the value of cinema to the movie model is very high in both revenue and value perception terms.
Secondly, cinemas will also be concerned that if all new movies release digitally first, there will be no new movies for their screens once this has passed and they can re-open. They could release some of them theatrically after they have been on-demand and that will pick up the people that decide a particular title has to be seen on the cinema screen but it may be a limited market. At the point that cinemas re-open, as well as postponed films there will also be the films that were scheduled on the release calendar already at that point and event cinema screenings that will be held over. There should be enough content to play when the sector returns to normal.
For distributors, the loss of their launch platform for the biggest films is a major concern. The other media windows generally revolve around at home or mobile and they should be less affected by COVID-19 than the social space that is a cinema. Making some revenues now when cinemas are shut is probably the best they can hope for, with the prospect of maybe releasing some of these titles back into cinemas when they re-open.
There are other parts of the cinema ecosystem that will be dramatically affected by this, from the staff that work there, technology vendors (including those with a revenue share deal), suppliers of F & B products, cleaning and maintenance staff, mastering and distribution operations, cinema ad providers, and marketing agencies.
Ultimately, we are in a situation that cinemas, distributors and other film industry stakeholders have not experienced before. Communication between the industry partners is key to coming through this and avoiding misunderstanding at this point will ensure a smooth re-opening when things calm down. For example, if studios are intending to offer films like this, they should make it clear that this is for the immediate period only. As cinemas are being made to shut, they are not in a position to generate revenues from releasing films but the long-term future of movies is still the cinema and this urgent and unprecedented situation cannot be allowed affect that reality.