- Movie theaters in the US are facing a multitude of struggles as they inch toward recovery.
- “Black Widow” releasing simultaneously on Disney+ benefited Disney more than theaters.
- A lack of family animated films this year in theaters, like Pixar’s “Luca,” has hurt the box office.
Movie-theater owners are not happy about the performance of “Black Widow.”
The National Association of Theatre Owners (NATO), the largest theater trade group in the US, released a scathing statement on Sunday lambasting Disney’s decision to release the movie simultaneously in theaters and on Disney+ (for a $30 additional fee) after it underwhelmed at the box office in its second weekend.
“Black Widow” earned $26 million over the weekend, a 67% drop from its domestic opening of $80 million, which was on the low end of projections.
NATO called simultaneous release “a pandemic-era artifact that should be left to history with the pandemic itself.”
Some analysts were quick to push back against NATO’s comments.
Exhibitor Relations media analyst Jeff Bock tweeted: “Theatrical and streaming will both be with us for a long time, and while windows will continue to ebb and flow for months/years, the answer for right now certainly isn’t exclusivity of any kind. Anyone saying that is scared of change and simply selling fear.”
The box office has shown signs of recovery as restrictions eased in recent months. But even “blockbusters” of the pandemic era — from “Godzilla vs. Kong” to “F9” to “Black Widow” — have seen big drops after their initial weekends.
NATO’s statement reflects the uncertainty of the future of movie theaters in the US and the rapidly changing media landscape that may be more beneficial for Hollywood studios than it is for theaters. And that’s a nightmare scenario for the theatrical industry.
‘Black Widow’ helped Disney more than theaters
“Black Widow” may not be the box-office smash theaters were hoping for, but it was still a smart move by Disney, according to the Wall Street firm Cowen.
“We think the dual-window strategy was pretty clearly net accretive for Disney; for theaters, on the other hand, the dual-window strategy presents a serious problem,” the firm wrote in a report released on Monday.
Cowen estimated that “Black Widow’s” lack of theatrical exclusivity cost it $50 million to $70 million domestically over its first 10 days, a 27% to 35% cut.
But because Disney keeps nearly all of the revenue from Disney+ purchases, compared to 60% of box-office sales, Cowen said that it was a “positive tradeoff” for the company. Disney announced that “Black Widow” earned $60 million from Disney+ in its first weekend.
“While for Disney the dual offering made sense (particularly given still-ongoing COVID-19 concerns), the 27% to 35% estimated hit to box office for the theaters is pretty devastating — particularly so given that Disney’s tentpole films constitute one of the last reliable sources of attendance for theaters,” the report said.
Disney has one more movie, “Jungle Cruise,” scheduled for simultaneous release this year. After that, its movies will be exclusive to theaters — for now.
Other studios, like Universal and Paramount, have embraced premium video-on-demand but in other ways, by dramatically shortening the exclusive theatrical window rather than simultaneous releases.
Theaters need more movies
Movie theaters are contending with other issues, too.
“Right now, the main absences felt [at the box office] are those of family-centric and high-profile animated films,” said Shawn Robbins, the Box Office Pro chief analyst.
Warner Bros.’ “Space Jam: A New Legacy” opened above expectations over the weekend with $31 million, but we’ll see how it performs in the coming weeks. And it’s also streaming on
Theaters have lacked exclusive animated family films that could help them thrive. Pixar’s “Luca,” which went straight to Disney+ last month, is the most notable example. This summer’s “Paw Patrol” movie will debut in theaters and on Paramount+ simultaneously.
Studios have been most willing to experiment with family films during the pandemic as they look to boost their streaming businesses. In an April survey of 1,904 of its users, the movie and TV tracking app TV Time found that family-friendly movies were the ones that respondents would most prefer to watch at home.
The fall could be better for animated films. Disney’s “Encanto,” Sony’s new “Hotel Transylvania,” and more are getting exclusive theatrical releases — for the time being anyway.
Still, movie theaters in the US could already be living through a nightmare scenario for the industry. If Disney, the biggest studio of recent years, views PVOD as a viable option, that could hurt ticket sales and put pressure on theaters to offer different ticket splits. And if a lack of family movies persists, that would be another blow to long-term theater recovery.
Chris Johnson, the CEO of the Illinois-based chain Classic Cinemas, thinks the industry is suffering from a supply issue. Right now, theaters aren’t just lacking animated films, he said. There’s also a lack of rom-coms, high-profile dramas, and other genres that could attract moviegoers outside of tentpole franchise sequels.
“The demos we’re going after are limited,” he told Insider. “Once we meet the full menu of supply, we’ll service the full demand. Our fortunes can’t live or die on a film here and a film there.”
This is part one of a two-part series about the state of movie theaters in the US. Part two will look at reasons to be optimistic about the industry’s future.
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