Coronavirus: Film Industry Experts Explain the Impact on Box Office, Delays, and Streaming

Taking a snapshot of the conversations and concerns happening now inside the film industry.

With news that both the next James Bond movie No Time to Die and Peter Rabbit 2: The Runaway have been delayed until later in the year because their respective studios thought the ongoing coronavirus outbreak would negatively impact their global box office hauls, it’s worth questioning whether other studios are planning to move their big releases as well. Studios and theater owners are counting on big global releases like Disney’s Black Widow, Universal’s F9, and Sony’s Ghostbusters: Afterlife to bring in big bucks over the summer, but if moviegoers are too scared to go to the theater or if theaters are closed due to government mandate, then the under-performance of those franchises could not only cost the studios hundreds of millions of dollars but impact the lives of thousands who work in the film industry.

To get a better sense of what conversations studios are actually having behind-closed-doors about these subjects, IGN spoke to a high ranking executive at a major studio who wishes to remain anonymous to hear what kind of discussions are being had at the studio level about how to respond to the spread and rising fears of COVID-19, as well as several box office analysts to understand how these shifts will impact the movie industry.

Will Other Studios Delay Their Films?


While MGM made the decision to delay the new Bond flick and Sony the Peter Rabbit sequel, other major Hollywood studios aren’t planning on rescheduling their film releases, at least for now. With the outbreak in its relatively early stages in North America, studios seem to be opting for a wait-and-see approach until there’s more information.

According to this studio executive, two key factors are being considered. The first is the global financial performance a studio wants the movie to have upon release. No Time to Die and Peter Rabbit 2 were moved for financial reasons (as opposed to out of an abundance of caution, given that doctors say large public gatherings could increase the chance of the virus' spread) because they are global franchises that perform particularly well in foreign markets. But with movie theaters closed in China and Italy as part of government ordinances to help stop the spread of the coronavirus, and large public gatherings being discouraged in other countries, the studios decided to delay those releases in hopes that the outbreak will be dealt with and normal theater operations resume by then. Not all movies rely on this type of simultaneous global release strategy for their box office success, so these may be outliers that aren’t necessarily the new trend for all studios.

“Every movie, for the most part, needs a big global box office, but there’s a difference between a movie like Bond which has such deep roots in other countries and going global on the same day makes a big difference,” the exec explained. “There are a lot of movies that aren’t put out internationally on the same day anyway, so I think that’s the difference. [There are] films that need to have a global groundswell and the ones that don’t, and a lot of films can live in that second category.”

If there's a compelling movie out there, it seems that audiences want to go to the theater to see it.

That’s likely why Universal was fine with moving Trolls World Tour into Bond’s spot: It’s less of an overseas phenomenon (the original Trolls movie made almost half of its total profits domestically) and the box office, theoretically, won’t suffer as much.

The other big factor, according to the exec, is whether concerns around the spread of the virus will actually stop consumers from going to the movies. In the US, no theaters have been closed due to the coronavirus and there’s no data to suggest it’s hurting the domestic box office, which means people are still going to the movies as normal.

“Right now there's no discernible impact on North American box office [from the coronavirus outbreak],” Comscore senior box office analyst Paul Dergarabedian told IGN. “Now, it's an ever-evolving situation, so we just have to take it day by day and week by week. But for right now, if there's a compelling movie out there, it seems that audiences want to go to the theater to see it.”

The studio executive says if there’s a sharp decline in consumers visiting theaters because of the outbreak, then it would call for a serious conversation in order to decide on the best course of action, but it’s not a conversation one any single studio will have alone.

“If we start to see more movies move because we don’t think people should be going to or don’t want to go to movie theaters, that’s a bigger industry thing. That’s not going to be a studio decision. The Motion Picture Association decides what is the right thing to do,” they said. “It would not surprise me at all if all of these conversations are happening with the MPA so that no one studio has to take the brunt, because this is an industry problem.”

Though no one can predict the future, Exhibitor Relations senior box office analyst Jeff Bock suggests that the longer the outbreak continues to worsen, the more likely the US will start to implement measures we’re currently seeing in other countries.

“I think all films will begin to be impacted, especially if the outbreak starts to detour audiences closer to home. Everything is up in the air right now, and depending how long this lasts, don't be surprised if the entire theatrical industry is put on pause, like it was in China and Italy,” he said. “This is a situation that is fluid, so expect the unexpected.”

For now, studios are taking the approach to leave it up to the individual consumer to decide if they still want to go to the movies. If the outbreak worsens to the point where the government (such as the Centers for Disease Control and Prevention) says going to theaters becomes a public health risk, then that decision will essentially already be made for the studios, so until then they will continue to focus on financial aspects such as box office performance and marketing, as well as protecting their employees.

Taking place in tandem with these more business-focused concerns are conversations about how the studio’s employees are being impacted by the outbreak. The studio exec says all decisions being made are based on what’s the right thing to do for their employees. Taking precautions like letting them work from home helps to protect employees, which is the most pressing internally-facing concern for the studio. But even those protective measures create new challenges that the studio must account for, and the exec says there are conversations being had right now about what course of action they might take if the coronavirus outbreak worsens. If that happens, then a large part of the studio workforce may have to work remotely, which impacts their ability to communicate and share information, which in turn affects the studio’s film productions and their ability to market and may lead to a negative impact on a film’s box office.

Will the Coronavirus Create Opportunities for Streaming Services?


If the outbreak continues and consumers don’t go to the movie theater either out of caution or because theaters are closed, Bock sees it as a boon to the business of streaming and a major blow to the theatrical industry.

“Streaming will move even farther into the spotlight if this continues to affect theaters,” he said. “Honestly, couldn't have come at a worse time for the theatrical sector.”

Therefore, it’s not unreasonable to ask whether a major studio would consider debuting a big release on their respective streaming service. NBCUniversal is preparing for the launch of its Peacock streaming platform, which will roll out to Xfinity users in April and go wide in July; Warner Bros. is teeing up the debut of HBO Max in May by establishing a new film development division to create mid-budget movies for the streaming platform, and Disney is already using Disney+ as a launchpad for smaller, lower-budget films that probably wouldn’t merit a theatrical release. Netflix, meanwhile, has established itself as a go-to outlet for movies that studios believe might underperform at the box office.

There's little reason to drop a big film on a streaming service.

While being able to capitalize on more people being stuck at home could be seen as a benefit to companies who have a streaming service, the studio executive doubts any studio would choose to forego a theatrical release. Unless a studio can drive millions of subscribers to watch that movie on their streaming service, they won’t be making additional funds because they already have those subscribers.

That said, if a company is looking to debut a streaming service, then offering a major release at launch could help drive subscription sign-ups and help make up for the theatrical loss. But still, as things stand now, there’s little reason to drop a big film on a streaming service, especially because it would be well worth holding the film several months, a year, or more if it meant eventually being able to earn big box office money.

It's also worth pointing out that streaming services aren't immune to the impact of coronavirus. Marvel's The Falcon and The Winter Soldier canceled a shoot in Prauge after the local government shut down all public events. The show is scheduled to debut on Disney Plus in August.

Will the Coronavirus Cause Production Delays?


Some films currently in production have already been affected by the coronavirus. Paramount was forced to cancel a three-week shoot for the next Mission: Impossible movie and put the film’s production on hiatus, but that’s because it was scheduled to shoot in Venice, Italy, one of the locations most heavily impacted by the coronavirus. A big question is whether continued concerns around the coronavirus -- especially in international territories where the spread of the virus may be wider than in the United States -- will cause more suspended movie productions and thus impact the timeline for future theatrical releases.

The studio exec says that there are workarounds to help keep most films on track. “A film set is somewhat contained so it’s easier to control for those sort of things ... The goal would be, can you keep the production on track by doing other things? For example, maybe you work on special effects,” they said.

Ultimately, what happens with a film’s production depends on the talent, the crew, and the filmmaker, says the studio executive. “If someone on a film had an issue and felt there was a problem, we’d deal with that on a case-by-case basis,” they said. For now, most films in production shouldn’t experience delays, the exec believes.

While things may seem mostly under control at the moment, there is one key area that studios are actively working to deal with: marketing and publicity. The executive said this is one of the most internally discussed topics concerning the impact of the coronavirus.

For the safety and well being of everyone, major corporations are doing the right thing by cancelling events.

The cancelation of Austin’s annual music and arts festival SXSW, for example, has thrown a wrench into many promotional plans because it means an upcoming film can no longer make a showing in front of the massive crowd of attendees and garner press coverage. In 2019, an estimated 417,000 people attended SXSW. This year, movies like Paramount’s The Lovebirds and Universal’s The King of Staten Island were planned to have their premieres at the conference.

“From a marketing perspective, especially for studios that like to anchor themselves in big events, if we start to see these [events] go away, that has an implication. Are we going to move a movie because of that? No. We’ll probably just change how we spend our money and what we do, but those are all financial ripple effects that could be felt,” they said.

There are numerous conventions in the coming months that now have a question mark hovering over them because of the coronavirus. CinemaCon kicks off on March 30, San Diego Comic-Con on July 23. So studios are keeping a close eye on whether those events will go forward as planned because missing out on those promotional opportunities can have a negative impact on a film’s financial performance. With other big events like Coachella seeing delays, it seems no industry will remain unaffected by the coronavirus.

Bock sees these types of cancelations as necessary despite the financial consequences.

“For the safety and well being of everyone, major corporations are doing the right thing by cancelling events,” he said. “Everything is going to slow down for a bit for awhile, and box office returns, like every other industry, will decline.”

Joshua is Senior Features Editor at IGN. If Pokemon, Green Lantern, or Game of Thrones are frequently used words in your vocabulary, you’ll want to follow him on Twitter @JoshuaYehl and IGN.

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