Good Morning! The final week of July has come and it’s time for Creative Close-Up. The weekends are where I can go to the theater to enjoy a good film. I miss it a lot. With the second wave of COVID-19 cases rising every day, that’s still not possible. I read that Christopher Nolan’s The Tenant may not get released any time soon. AMC theaters were supposed to open a week before the last on July 17, but that’s not possible either. It’s frustrating for those of us who love to escape to theaters for the latest films, especially during the summer months.
The summer box office of 2020 is not looking so, should I say hot? An article from Rebecca Keegan and Pamela McClintock of The Hollywood Reporter has an interesting take on this subject.
The supervillain Hollywood never saw coming, the virus has already disrupted the summer movie season, forcing studios to push (and re-push) their lucrative tentpoles while leaving anxious theater owners hopeful for a third-act hero.
In early June, executives at Warner Bros. convened a video meeting with their top filmmaker, Christopher Nolan, and his producer and wife, Emma Thomas, to strategize about the release of his $200 million espionage movie, Tenet, which at the time was due to open July 17. The studio laid out several theoretical scenarios for Nolan, listing likely profits and losses with his movie being released on different dates, according to multiple sources with knowledge of the call. Presented with an economic case for moving Tenet to Aug. 7, when presumably the novel coronavirus would be a more contained threat and box office grosses more reliable, Nolan said it wasn’t about money, but instead about the desire to be the one the first big studio films back in theaters, to show faith in the form and solidarity with exhibitors, when they’re allowed to open and say they’re ready.
After some debate, Nolan and Warner Bros. ultimately agreed to shift Tenet‘s proposed July 17 release, though only by two weeks, to July 31; then, on June 25, as COVID-19 numbers began to spike in pockets around the U.S. including California, Texas and Florida, Warner Bros. pushed the film again, this time to Aug. 12. “We are very proud of Tenet and can’t wait for people to see it in theaters,” says Warner Pictures Group chairman Toby Emmerich. “However, we only want people to go to theaters when state and local officials say they can be safely reopened.”
Not just any filmmaker gets this much say in the fate of his work. Nolan has reliably delivered commercial and critical hits for Warner Bros., among them 2008’s The Dark Knight ($1 billion worldwide), 2010’s Inception ($829 million) and the best-picture- and best-director-nominated 2017 war drama Dunkirk ($526.9 million worldwide). The partnership also has benefited theater owners: Ardently devoted to the moviegoing experience, Nolan is the rare contemporary filmmaker who hasn’t worked with a streaming service; in March he wrote an op-ed in The Washington Post calling on Congress to help shuttered theaters, which he said supply “a vital part of social life, providing jobs for many and entertainment for all.”
Studios, theater owners, and filmmakers now find themselves in an extraordinary dilemma, wanting to fight for the survival of a theatrical business that was already under siege pre-COVID but also facing the frightening and unpredictable specter of the pandemic. As COVID cases continue to climb and states that had lifted lockdown rules roll back their openings, even an August release is shaky. If studios are forced to push release dates again, the summer of 2020 would be the first since 1975, when Steven Spielberg’s Jaws introduced the concept of the summer megahit, that moviegoing’s high season unfolds without a blockbuster. That will bring severe financial consequences: Last year, the season, which runs from the first of May through Labor Day, counted for $4.35 billion, or 38 percent, of the full year’s $11.4 billion in ticket sales.
Typically confident box office analysts are hard-pressed to gauge Tenet‘s potential in this environment. Nolan’s average opening weekend gross in North America is $56 million; some analysts believe that Tenet has a shot at a $30 million opening weekend, likely occupying a record number of screens but playing to half-full, socially distanced theaters. The film will need to earn around $400 million globally to break even, after factoring in marketing, which is likely less than the typical $120 million to $140 million price tag because of the dearth of costly live sports ads.
Like Warner Bros., Disney has been engaged in a release-date dance with its Chinese folklore action film, Mulan, which has moved from March 27 to July 24 to Aug. 21 in an attempt to get away from the virus. “It’s never ideal to have to move a release date,” says Walt Disney Studios co-chairman and chief creative officer Alan Horn, “especially multiple times, as some films have had to do in these past few months, but we’ll have to continue to do so until the situation is more stable. It may be painful at the moment, but health and safety is the priority right now, and eventually, we’ll be on the other side of this.”
Tiny Texas-based Santikos Entertainment is one of the few movie theater companies that has been operating in this unusual environment. After it opened three of its nine theaters May 2, Santikos represented a whopping 57 percent of non-drive-in domestic box office revenue for the week, even while adhering to a Texas law that required it to keep theaters at 25 percent capacity (at the same time, Santikos barely cracked the top 20 list of theaters that weekend; drive-ins were far more popular).
Santikos employees wear masks and clean the theaters with new, COVID-rated sprayers; the company is not accepting cash and has installed plexiglass anyplace where employees and the public interact. After two months without a new wide release from a studio to lure audiences, keeping the doors open is getting harder. “Without new material, being open is just slightly better than being closed,” says Santikos CEO Tim Handren. “We opened May 2 to bring our employees back, to give people an escape from COVID-19, and to learn how to operate in this crappy environment. We’re still losing our tails; we’re just not losing them as fast.”
So far, the chain has been allowed to operate at 50 percent capacity for seven weeks, but still, Handren says, “We never, ever come close to hitting 50 percent capacity in any of our theaters right now, because we’re showing old content.” The company’s hope for better business lies in the releases of Tenet, Mulan and Solstice Studios’ Russell Crowe thriller Unhinged, which is now scheduled to open July 31 (Unhinged had previously been set to come out July 1). “This whole plan of hope is not very settling for me,” Handren says. “And that’s what it feels like we have right now, nothing but hope. That’s frustrating, just trying to find some sense of stability so you can plan. I mean, I wish Warner Bros. would have said all along, ‘It’s going to be August.’ OK, I can plan around that. But you keep moving the goalpost on me every single week.”
National Association of Theatre Owners chief John Fithian and others at the trade organization have been briefing state and local authorities as to which safety and social distancing measures theaters are planning in hopes of getting the green light to reopen the 5,500-plus indoor cinema sites in the U.S. In many instances, the push has gone well. As of June 30, cinemas in 42 states could reopen with certain protocols. That, however, excludes Los Angeles and New York City, the country’s two largest moviegoing markets, without which the big national cinema circuits can’t reopen. “It’s a moving target,” Fithian says. “People want to get out of their houses and go to movies. It’s just a question of how long it will take to get there.” Cinemas raised the bar on Monday, July 6, when filing a lawsuit against the state of New Jersey alleging that Gov. Phil Murphy can’t keep theaters closed any longer. New Jersey is one of five states — the others being New York, North Carolina, Maryland, and New Mexico — that haven’t yet said when movie theaters can reopen even though institutions such as churches are being allowed to resume services.
Hollywood movies such as Tenet and Mulan are global box office plays — an event film can make 70 percent of its money offshore — and internationally the picture is equally complex. Much of the world will reopen before the U.S., but China’s more than 12,000 cinemas remain closed, and markets like Brazil and Mexico, which are key to the success of a family film like Mulan, are facing surging COVID numbers, with most theaters still closed.
Like Universal, Sony moved its big event movies, including a Venom sequel and a Ghostbusters update, out of 2020 entirely. But the studio is experimenting with another, old-fashioned notion — slowly rolling out a low-risk romantic comedy, executive produced by Selena Gomez and called The Broken Hearts Gallery, which Sony bought for less than $10 million after the pandemic had begun and plans to release Aug. 7.
“Even if the world were normal, it’s not a movie that you would release on 3,000 screens,” says Tom Rothman, chairman of Sony Pictures Entertainment’s Motion Picture Group. “The play on Broken Hearts Gallery is not about a weekend. It’s about several months. If there are theaters open, and the safety protocols are in place in Ohio and not in Los Angeles, that’s OK. We’ll play Ohio and then we’ll play L.A. when it opens. That’s how movies were released in the pre-Jaws era. They rolled out. If you’re the only film in the market, that can be OK, if you’re able to be patient.” This strategy depends on being able to move quickly, without the burden of costly TV ads and billboards that can rapidly become out of date. Sony’s marketing campaign for The Broken Hearts Gallery is entirely digital, and the film will enjoy a publicity boost just from being a studio movie in theaters.
Alongside Broken Hearts Gallery will be Unhinged, the first movie from Solstice Studios, Mark Gill’s indie outfit. The road-rage thriller, starring Crowe, originally was set to open in September, but Solstice decided to move up the release in hopes of generating exposure. “It’s simultaneously exhilarating and terrifying. You have all these unpredictable things, like release-date changes and health updates,” says Gill. In the span of two months, Unhinged has moved two more times, first from July 1 to July 10, then from July 10 to July 31. “You have all the theater owners to call, then you have to shift all the ads. It does feel a bit like Groundhog Day. We all knew this might happen,” says Gill. “We knew it would get bumpy. But there is a tremendous advantage to being first. We’ve gotten so much publicity. We’ve earned over 400 million media impressions, including social media. In a normal time, we would have been lucky to get 50 million.”
When theaters do finally reopen, audiences will enter a different world, where face masks, staggered seating and high-tech electrostatic sprayers are the new norm. Theaters’ planned enforcement of those new policies has already proven divisive. On June 18, AMC Theatres CEO Adam Aron ignited a social media maelstrom when, in explaining why customers wouldn’t be required to wear masks, he told reporters he didn’t want to wade into “political” territory. Filmmakers and film fans spoke out, with Doctor Sleep director Mike Flanagan tweeting: “Face masks are not political. @AMCTheatres, please reconsider this decision to intentionally endanger your own customers.” Sources tell The Hollywood Reporter that Disney was so concerned, it reached out to Aron’s team the evening of June 18. How could the media giant require guests to wear masks at its reopened theme parks but not require them of moviegoers heading to see Mulan? (Research suggests many moviegoers would feel reassured by such a rule: In a June 29 NRG poll, 44 percent said they would be more likely to go to a movie theater if they were required to wear a mask and keep it on for the duration of the film.) Within a day of Aron’s comment, AMC reversed its policy, and the company now plans to require masks. Regal Cinemas and Cinemark Theatres, the other two of the country’s three largest circuits, also retreated and issued revised guidelines, saying patrons would be required to have a mask on except when eating concessions inside an auditorium.
In a move that may now seem prescient, some Hollywood studios decided early in the pandemic to sit out the summer season entirely. Universal quickly pushed the releases of tentpoles like the next Fast & Furious movie (F9) and Minions: The Rise of Gru to summer 2021. “We weren’t popular with exhibitors, but we knew it was probably going to be the best thing for the movies, and now, of course, we are very relieved that we did,” Universal Filmed Entertainment Group chairman Donna Langley told The Hollywood Reporter in her first interview since the COVID-19 crisis struck. “We got prime real estate next summer, and we prevented a lot of headaches. We had certainty about some things when there is so much uncertainty. We wanted to nail things down as best we could.”
Additionally, NBCUniversal was finally able to release a large event movie on premium VOD, something many of the major studios have wanted to do for years, only to be blocked by cinema owners. Just as cinemas were closing en masse in mid-March, the conglomerate announced that it would make its April animated event movie, Trolls World Tour, available to rent day-and-date in the home for $19.99 for 48 hours. Cinema owners fumed. In a calculated move that likely didn’t help, Universal executives didn’t give exhibitors much of an advance warning before the Trolls news broke. Aron wrote Langley a letter saying his circuit would boycott all Universal films going forward. While the company hasn’t ever released official stats, NBCU CEO Jeff Shell, an avid proponent of PVOD, boasted in a Wall Street Journal interview that Trolls World Tour generated $100 million in rental fees.
Perhaps with the depth of the pandemic sinking in, theater owners have since stayed quiet as a number of other studios debuted titles on premium VOD or streaming services, including Hamilton (Disney+), Paramount’s The SpongeBob Movie: Sponge on the Run (PVOD) and Warner Bros.’ Scoob! (HBO Max). AMC’s Aron told THR that the circuit and Universal are in talks, but that the boycott remains in place. “I don’t think people were upset that Trolls was going to PVOD. I think it was NBCU’s attitude,” says Wall Street analyst Eric Handler of MKM partners. “Exhibitors don’t have any choice now but to be understanding.” (Studios are also being selective in what they move to PVOD or sell to SVOD platforms, selecting films that appeal to families who might not return to theaters right away, like Scoob!, which Warner Bros. sent to HBO Max, or older audiences, like the Tom Hanks World War II movie Greyhound, which Sony sold to Apple.)
Thanks to Rebecca Keegan, Pamela McClintock, Borys Kit for the article, which is featured in the July 8 issue of The Hollywood Reporter magazine.
Cases rise, film dates get pushed back. When will it be safe to go back into the theaters? No telling…the only thing we can do is wait and see. In the meantime, we might as well get used to getting new films coming to VOD. I hope this article provided you with an interesting look at the summer box office dilemma.
Enjoy the rest of your Monday, be safe, be healthy, be blessed, and most of all…WEAR A DAMN MASK!
Featured image: Wallpaper Boat