Dark clouds still Hang Over movie theaters: Covid-19 and the streaming business weighs heavy
Streaming video services are clearly having a significant impact on the movie industry, with the latest bold move made by Amazon AMZN -0.7% Prime last week when NextTV reported that the e-commerce giant will pay $225 million to Director Joe Koesinski to make a Formula 1 movie that will star Brad Pitt.
The move was made in part to prevent Netflix NFLX -0.2% from getting hold of the title as the streamer would have surely been in the market for the film given the success of its Formula 1: Drive to Survive docuseries.
Netflix CEO Reid Hasting has made it clear he plans to bid on the Formula 1 broadcast rights (currently with ESPN) when they come up for renewal after the 2022 racing season. This would parlay off of the success of the docuseries.
Despite the streaming giants being in the market to bid on blockbuster budget films, there has been some good news on the traditional movie front recently such as Spider-Man: No Way Home grossing an enormous $669 million thus far, according to Box Office Mojo. That’s more than any other Spidy film, the #2 grosser was the original Spider-man which grossed $404 million domestically back in 2002.
However, many in the traditional movie industry believe that the double whammy of the pandemic paired with well capitalized companies like Amazon, Apple AAPL 0.0% and Netflix (not to mention a number of newcoming streamers coming in and trying to compete with these giants) it will make it difficult for the box office to recover to its pre-pandemic level.
Stephen Galloway, the dean of Chapman University’s Dodge College of Film and Media Arts, summed it up nicely in this Sunday’s New York Times NYT -0.5%. “The movie business is this gigantic rock, and we’re close to seeing that rock crumble,” he said. According to a recent study, 49% of pre-pandemic moviegoers have not stepped foot in a theater since and eight percent say they will never go to a movie theater again.
Those are sobering numbers and a look at the annual domestic box office grosses from Box Office Mojo showed that, although 2021 domestic box office at $4.5 billion was more than double 2020’s $2.1 billion, that’s not even close to the pre-pandemic numbers. Between 2009 and 2019, domestic box office steadily came in at between $10-$12 billion per year.
In addition, the 2021 box office number included the huge gross for Spider-Man: No Way Home, so it’s unclear that with the Omicron variant still strong in 2022 we will even be able to beat 2021’s $4.5 billion, much less go back to pre-pandemic levels. There are currently a number of promising films headed for release in 2022. However, much of the success of the 2022 box office will hinge on whether or not the major studios keep pushing out their release dates or choose to do a limited release with a big streaming push (which is what Amazon plans with the new Formula 1 movie. Forbes
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