Cinema around the world is reopening. But the uncertainty prevails and the biggest risk comes from the Consumers. Will they return.? and When?
Global box office revenues amounted to the US $42 billion last year, an all-time high.
By May 2020 cinema has resulted in an enormous loss estimated at US$ 17 billion.
Divesting the industry of films that could have brought momentous returns at the box office. Especially during the summer months when schools are closed. How many more billions lost for June and July are worth speculating.
World’s largest box office market worth US$ 11.4 billion in 2019 is still struggling. Hollywood supports more than 2 million jobs. A key driver of the US economy. As a result of the “new normal” brought about by the COVID-19 pandemic. Major blockbuster movies continue to be delayed with no end in sight while film production and overall business are operating on a day-to-day basis.
Financial ramifications will likely be felt by studios, filmmakers, theater owners, for months or even years. Disney making sweeping changes also owns 20th Century Films and Searchlight Films. Sony delaying nearly all its movies until 2021. NBC Universal to release major films digitally. Paramount changing dates.
Disney moved its upcoming trio of Star Wars movies forward by one year; they’re now slated to release in cinema by 2023, 2025, and 2027. And James Cameron’s Avatar sequels were moved back by a year as well, with the first set to premiere in cinema by December 2022. While Tom Cruise’s Top Gun Maverick shift to 2021 was among the biggest news.
Where audiences grew over 860% from 2009-2019 ( source: wef ) –the world’s second-largest market with US$9.2 billion.
More than 70,000 screens in 10,000 theatres stopped operating before opening back partially in March.
This action had a tremendous impact on the release schedules of theaters, as many film production companies struggled with liquidity challenges largely as a result of the plunge in box office revenue. A total of 64% was generated by domestic movies.
Demand for the quality theatrical experience was at an all-time high before the COVID-19 surfaced.
The lockdown has led to losses of over US$133.7 million, the worst for the first 6 months.
Add to that a relative dearth of screens on the supply side. Furthermore, in India, the pandemic has altered the consumption pattern. By shifting eyeballs in favor of TV and Online. India has one of the fastest-growing streaming markets projected to be worth US$ 2.4 billion by 2030.
In Japan, the drop is 46% from $2.4 billion and for South Korea, it is 65% from $1.6 billion in 2019. In Southeast Asia, Singapore, Indonesia, Vietnam, Thailand, and Malaysia have been the 5 major markets. Boosting expansion prior to Covid-19. Their film industries have lost enormous revenues due to the closure of theatres to the extent that it may take 3-5 years for recovery.
In Asia, theatre chains have already invested in safety and hygiene protocols. adhering to guidelines that ensure the safety of patrons. For instance:
- Attendance is mostly limited by 30%-50% of capacity. Age restrictions below 12 and above 55-60 years. Generally not allowed.
- Physical body checks have also been done away with. The theatre’s entrance is adapted with sensors. Followed by temperature checks.
- Comprehensively contactless transaction system. The customer has to scan QR codes. Available at multiple touch points through phone camera. This is to book tickets and then order food and beverage.
- Only in the notable case where a customer is either not carrying a phone or does not want to make digital payment will cash be accepted. Either way, no physical tickets will be sold anymore.
- Washroom taps have also been equipped with sensors and operate at 50% of their capacity.
Despite the hardship experienced by global film industries. It is their faith that the theatres will survive. Cinema takes up to 50% share of ticket sales. And yet, the show must go on.
To Be Continued…
Asim Qureshi is the Founder of Starring Brands, a pioneer in marketing media, entertainment, and fashion from Pakistan.
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