‘Movie Theatres Returned. Audiences Didn’t. Now What?’ is the title of a New York Times article posted mid-September, that carefully captures the distress the film industry is currently in. After a period of complete shut-down, movie theatres have been allowed to re-open if they take safety measures in regards to Covid-19. The audiences however, have not returned and studios are postponing their big releases. Sperling and Barnes (2020) argue that the longer the pandemic continues, the more streaming will become a true substitute for movie theatres.1 This struggle however is not new. Long before Covid-19 forced us to put our lives on pause, the film industry was struggling to make ends meet. There are two main developments that played a part in this.
First, home theatre technologies such as surround sound systems, HD televisions are becoming increasingly sophisticated and affordable.2 If you have a state of the art system at home, why would you still go to a movie theatre? Especially if a ticket to see a movie is 10 euros and it costs about the same to access a seemingly unlimited number of movies through a streaming service.
Which leads us to the second development: streaming. In the second quarter of 2020, Netflix had almost 200 million paying subscribers and a survey conducted in the US in May of 2020 found that 62 percent of respondents were currently subscribed to a paid streaming service.3,4 Streaming platforms previously only offered ‘older’ movies, but the introduction of original content increased the power of streaming platforms even further. It could mean the disruption of the traditional format in which a movie always goes to theatres first and for a dedicated number of weeks before it can be shown anywhere else. Covid-19 might push studios towards a new format. Disney has already made this decision regarding the release of the live-action remake of ‘Mulan’, as they will mostly skip movie theatres and directly making the movie available on their own streaming platform Disney+ for an additional fee.5
Although the increased use of home theatre system and streaming platforms are no new development, Covid-19 is speeding up the changes they cause for the film industry.
References:
- https://www.nytimes.com/2020/09/15/business/media/tenet-movie-theaters-coronavirus.html
- https://people.howstuffworks.com/culture-traditions/tv-and-culture/10-tv-technologies-making-movie-theaters-obsolete.htm
- https://www.statista.com/statistics/250934/quarterly-number-of-netflix-streaming-subscribers-worldwide/
- https://www.statista.com/statistics/325162/svod-penetration-rate/
- https://www.reuters.com/article/us-film-mulan-idUSKCN2502VO
Hey Romy, thank you for this interesting perspective on movie theaters during the Covid-19 pandemic. Although streaming services and improved home cinema technology pose the question if movie theaters will still be present in the future, I think that they can‘t replace the experience of a movie theater. In addition, I don‘t believe that movie theaters got replaced during the pandemic. I rather believe that a visit to the cinema is not considered important enough by many consumers to take the risks of being infected by the Coronavirus. During these times, many consumers have limited their out-of-home activities to a minimum, and a cinema visit is simply not part of it. After the pandemic, I am confident that cinemas‘ customers will come back, and hopefully they will be more than ever before.
This is certainly an interesting development. I agree that cinemas are becoming less popular as there are alternative options with a similar kind of experience like Netflix. On the other hand, going to the cinema is more than watching a movie, people can view as night out. Especially during Covid-19, I think people see it as a way to get out of the house.
Hi Romy,
Interesting how you state that the film industry is affected by Covid-19. I thought about many industries that are affected, but the film industry did not come to my mind. Before Covid-19 the streaming services were indeed a potential substitute, but now they became competitors. However, don’t you think that, if Covid-19 is over, movie theatres will come back? Mostly movie theatres are the first ones to show new movies and after a while, these new movies can be seen on streaming services. I think that people, who really love movies, will return to the theatres.
Hi Romy,
Interesting article! The pandemic has nearly affected every industry and promises to continue to do so for the next foreseeable future. In terms of cinemas, recently they have opened up again with limited seating to avoid infections. Interestingly, Tenet is considered as a trial to see if movies could still be profitable if released during covid-19 times. Depending on this outcome, many others will either follow or continue to delay the release. I do think. though, that at home cinemas are more popular among the older crowd while students will continue to attend the cinema as an activity post-covid.
Hi Romy,
This is a very interesting analysis of how COVID-19 is affecting the movie industry. Consumers are increasingly staying home, but still want to watch new movies. Consumers now have access to surround sound systems, movie theater seats and even popcorn makers at home. This would ensure a very similar experience to being in a theater and studios can increasingly tap into this market. The use of disney’s mulan was an example that I immediately thought of as well. Netflix also tapped into this market with their release of the Irishman. An oscar-nominated film that was only released to a minimal number of theaters, simply because Netflix had a much larger reach through their own platform. However, I still believe that the activity of going to the movies is a consumer experience that can never be fullt replaced. The customer journey that goes into this process is much more significant than solely the entertainment it offers to users. I thus believe that we as consumers will return to the movie theaters. There might be a slight shift, but I do not believe that it will be much more significant than the one we have already experienced with the current developments of streaming services.
Interesting post Romy! You cover an interesting and very recent topic which includes the effect of Covid-19. I agree that movie theatres are becoming less appealing to consumers, this can also be seen in the last few years. In my opinion, streaming platforms are definitely disrupting the film industry. Like you mentioned streaming platforms offer an unlimited number of options and in comparison, it cost less. To add to that I believe that Covid-19 is indeed speeding up the process of disrupting. However, I don’t think the whole industry will disappear eventually since like others commented, watching a movie in the cinema is a different experience than watching it at home. Moreover, it is associated as a more social event which currently is less happening due to the virus. Therefore, I expect that movie theatres will come back to a certain extent, maybe as a more niche market.
Do you think that companies like Disney, which also have a streaming service, will eventually not present their films in the cinemas anymore? If so, how will this influence the varying of movies offered in the movie theatres? It is really interesting to think about these questions and the further development of the film industry.
It is certainly true that Covid-19 is affecting the film industry and movie theatres. And that it is becoming far less popular in comparison to streaming services which are cheaper and more accessible, especially in these times. But i don’t think streaming services will substitute movie theatres entirely. For me personal, I like to go to the cinema on a night out with friends and it’s more than just watching a movie like on a streaming service. Especially now that we are mostly at home and our activities are limited, its nice to have the opportunity to leave the house and watch a movie. But I do think movie theatres will have to adapt to attract more customers and to stay relevant.
Hi Romy, I enjoyed your post about how different factors, from technology to the recent pandemic, are accelerating a process of disruption within the film industry, where incumbents like the movie theatres are progressively being substituted by streaming platforms. However, I believe that at the end the value proposition of a movie theatre cannot be entirely matched by an online provider, due to the large number of aspects that characterize this kind of experience that simply cannot be delivered on the internet, like the food, the atmosphere and being a pretext for spending a night out. At the same time, it is also interesting to notice the fact that even a company like Netflix has understood that Theatres are much more than “competitors”, that some of them present some historical significance and can be used to broaden its offer and implement a multichannel strategy, like the saving of New York’s iconic Paris Theatre can testify.