Yahoo Finance Theaters need a 'bridge' to 2021 or else ‘might not survive’ COVID-19: Movie association
Movie theaters need “a bridge” to get to 2021, when a coronavirus vaccine is expected to be ready, or else the industry “might not survive” the pandemic, according to the National Association of Theater Owners (NATO).
On Wednesday, NATO — along with the Directors Guild of America and the Motion Picture Association — plus over 90 prominent Hollywood types, wrote a letter to Congress urging them to pass more relief funding for the struggling industry.
With COVID-19 infections still on the rise, domestic theaters are stuck in limbo as restrictions keep major markets shuttered — and big budget movies in the deep freeze.
“Cinemas are an essential industry that represent the best that American talent and creativity have to offer. But now we fear for their future,” the document read. “Our country cannot afford to lose the social, economic, and cultural value that theaters provide.”
According to the letter, 93% of theater owners experienced over 75% of losses in the second quarter. If that downward trend continues, 69% of small to mid-sized theater chains will either close permanently or go bankrupt which would eliminate 66% of jobs, it added.
After a record-breaking 2019 that saw the industry pull in $42 billion, the pandemic hammered theaters across the country, NATO president and CEO John Fithian told Yahoo Finance.
“We know that we won't be hugely profitable this year, but we're trying to ramp back up and get back into business so that, when we do get to the other side of the pandemic in 2021, we can return to record-breaking form,” Fithian, a co-author of the letter, added.
“What we need between now and then is a bridge to get between 2019 and 2021. That's what we're asking Congress to do,” he continued.
At the moment, theaters are asking the government to redirect unallocated CARES Act funds, or enact new proposals like the “RESTART Act,” which would extend hundreds of billions of dollars in loans for hard-hit businesses.
CARES and the Payment Protection Program “did help quite a few of our smaller members, but that was very constrained in terms of the size of the business that could use the loan, and it was also for a time certain,” Fithian explained.
“We're still hurting and we'll be ramping back up very slowly, so we need additional liquidity or grants from the next relief package to make it to the other side,” he added.
At-home model seen temporary
In the interim, some studios have decided to bypass the theatrical experience entirely, and go directly on-demand or to a streaming service.
Most recently, Disney (DIS) took a calculated risk to release its live-action “Mulan” remake on its streaming service — while NBCUniversal (CMCSA) had a surprise success story with the digital release of “Trolls World Tour.” That resulted in the historic VOD deal between the media conglomerate and theater chain AMC (AMC).
However, other titles have chosen to weather the coronavirus storm, with high-profile films like “Black Widow” and “Wonder Woman 1984” delaying their respective theatrical release dates to 2021 or later this year.
On Friday, it was announced that “No Time to Die”, the final installment of the Daniel Craig-led James Bond franchise, would be delayed until Easter weekend 2021. The film was originally set to debut this past April.
“I think what the movie studios are saying is that they want the theatrical release for their big movies,” NATO’s Fithian told Yahoo Finance.
“They want the theaters to survive and come back up at the end of this, because that's how they make the most money on their movies — with a big theatrical release first and then a home release later,” he stated.
“The movies that went straight to the home during the pandemic, honestly, that's a ‘business pandemic model.’ That's a need to monetize those particular titles quickly...but the vast majority of the movies were rescheduled,” he added.
“We think that means that once we're strong and vibrant again, movies will be coming to theaters and people will be coming back to theaters as well,” Fithian said.
As for whether or not the traditional theatrical window is at risk amid coronavirus uncertainties and the at-home entertainment boom, Fithian stated the focus remains on that initial cinematic experience.
“We may adjust around the edges what the release windows are, and how long each of these various platforms have access to the movie, but certainly the initial theatrical release remains fundamentally important to the movie distributors,” he concluded.
Alexandra is a Producer & Entertainment Correspondent at Yahoo Finance. Follow her on Twitter @alliecanal8193
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