The U.S. box office is expected to drop by 81 percent this year as the coronavirus continues to decimate domestic moviegoing, according to new analyst report from MoffettNathanson. The report recommends that cinema chains swallow their pride and team up with streaming services like Netflix as a “lifeline to get more product on movie screens.”
While cinemas in many areas have re-opened, key markets in Democrat-controlled states like New York and California remain closed, which has had a chilling effect on Hollywood studios who remain wary of putting their movies in theaters. The disappointing domestic release of Tenet has prompted studios to delay many of their tentpole releases to 2021.
As a result, cinemas are still starving for movies that could lure back customers.
“2020 unfortunately now looks like a year where the domestic box office is set to plummet 81 percent,” MoffettNathanson’s Robert Fishman concluded in the report, according to The Hollywood Reporter.
Fishman said the market could take a couple of years to bounce back. “Factoring in the studio supply and potential consumer demand issues, we now forecast 2021 to be depressed at 35 percent below 2019, or $7.4 billion, before growing 23 percent to $9.1 billion in 2022.”
In the meantime, he recommended cinema chains join forces with streaming services.
“Theater owners should consider finally striking a deal with Netflix, Amazon and other SVOD services as a lifeline to get more product on movie screens,” he wrote, adding that new windowing strategies will “help ease the decision making process for studios to bring back their movies.”
Major cinema chains have often regarded streaming services as the enemy. But in July, Universal struck a deal with AMC Theaters that has the potential to upend the industry.
Under the agreement, new Universal movies will have just three weekends of exclusivity at AMC cinemas, as opposed to the traditional three months. The studio will then have the option of makes its movies available for digital streaming at home.
Meanwhile, cinemas continue to play the waiting game. Big-budget movies including No Time to Die, Dune, West Side Story, and Top Gun: Maverick have all seen their release dates pushed back to next year.
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