Exterior of cinema with neon lights - the movie business is rapidly pivoting

The Movie Business Is Rapidly Pivoting

Like the current pandemic, the Spanish Flu pandemic of 1918-1920 had a severe impact on the movie business. Prior to the scourge, the film industry was booming. There were some 20,000 bustling movie theaters around the United States. However, in October of 1918 a second wave of the deadly virus spread across the country. It killed nearly 200,000 Americans in that month alone. For perspective, the US population was only 100 million back then, just 31% of today’s 331 million.

Many theaters were shuttered in the fall of 1918. High-profile movie stars were infected. Film production came to a screeching halt, and legions of actors, directors, camera operators, and other crew persons found themselves without work. Movie studios large and small faced existential threats from the economic downturn.

However, there are, of course, major differences between today’s entertainment industry and that of 1918. Most notably, people around the world can indulge in movies and television shows at the time and place of their choosing. And they have a plethora of viewing platforms to choose from. Because of this, some producers, distributors, and exhibitors of content have been able to quickly pivot and shift to more viable business strategies.

Drive-In Movie Theaters

The New York Times and others have reported on the pandemic-era resurgence of drive-in movie theaters in the United States. Unable to visit the cinema, moviegoers are opting to hop in their cars and drive long distances to park in front of an outdoor screen. Even some restaurants are setting up temporary screens for patrons who want to take in a flick while enjoying curb-side food service. Drive-in theater enthusiasts believe that the industry will make a major comeback. Entrepreneur Spencer Folmar is planning to build the world’s largest drive-in theater in Florida.

305 of these relics of a time gone by still exist in this country, spread across 45 states. There were over 4,000 drive-ins in 1958, some of which advertised their setups as a way to enjoy a night out while avoiding polio.

The Netflix Party

As expected, content streaming giant Netflix has experienced a massive uptick in activity and subscribers since stay-at-home orders began rolling out around the world. On April 21 it reported almost 16 million new subscribers in the first quarter of 2020 alone. This number doubled the expectations of Wall Street experts and of Netflix leadership. In recent weeks 64 million households have tuned in for the bonkers true-crime private-zoo documentary series Tiger King.

Netflix is on track to generate over $24 billion in revenue this year as compared to $20.2 billion in 2019. Most of the growth comes from its international streaming division. The company’s current stock price is $405, a more than 400% increase in the last 5 years.

Recently, independent app developers launched a Chrome browser extension called “Netflix Party.” Friends and families can use it to coordinate socially-distanced screenings of Netflix content. Viewers in different locations simply use a custom generated URL to login and simultaneously watch a movie or TV show while sharing thoughts and critiques in a private online chat room.

Universal Pictures makes a bold move

In March, Hollywood’s oldest studio announced that it would release various movies on streaming services without a theatrical release. This bucks a traditional mandate from major movie theater chains, which requires that studios allow for a 90-day theatrical run prior to a digital release. Universal is employing a “premium video on demand” (PVOD) strategy with various streaming services which charge $19.99 for a 48-hour rental of select newly released pictures.

To date, Universal has executed PVOD releases for several films, including “The Invisible Man,” “The Hunt,” “Emma,” and “Never Rarely Sometimes Always.” Hollywood insiders have monitored the move very closely. However, they are particularly interested in the performance of the studio’s tentpole children’s movie Trolls World Tour. The follow-up to the very successful 2016 hit Trolls was slated for release on April 10. When theaters across the country shut down, Universal opted to keep the same date for a PVOD release. WSJ reports that, in less than 3 weeks, Trolls World Tour has generated $100 million in rentals. This exceeds what the original Trolls achieved during its entire 5-month theatrical run. Universal is particularly thrilled with the outcome because 80% of the PVOD rental revenue flows back to the studio, as opposed to just 50% from theatrical releases.

Film festivals regroup online

ELEVATION previously reported that the ultra-popular Austin-based multimedia festival known as SXSW would partner with Amazon to release its slate of 2020 festival films online. The initiative was launched yesterday, free to all who wish to view the assortment of short films, documentaries, and feature narratives from up-and-coming filmmakers. The online collection will be available until May 6.

And, just yesterday, YouTube announced a partnership with 20 leading film festivals around the world to present an even grander online spectacle. The Cannes Film Festival, Toronto International Film Festival, Tribeca Film Festival, and Venice Film Festival are among the organizations that will be providing content for the special initiative. We Are One: A Global Film Festival will run ad-free from May 29 to June 7 at www.youtube.com/weareone.

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