The first sign that moviegoers were ready to return to theaters came when “Godzilla vs. Kong” stomped into cinemas at the end of March. Even though it also streamed on HBO Max, the movie made $98 million in North American theaters and $436 million worldwide. That was welcome news after a pandemic year that was terrible for movie theaters.
Then, the pent-up demand exploded last week over the Memorial Day holiday with Paramount’s “A Quiet Place Part II,” which was exclusive to theaters and made about $57 million over four days, and Disney’s villain origin myth “Cruella,” which was also available on Disney+ for $29.99 and made $26.5 million in theaters over the same period. While some distributors argue that Disney left as much as $10 million on the table by splitting its audience with streaming, no other movie that opened in theaters and streamed at the same time has performed as well as “Cruella.”
But for all these signs of momentum, and big releases to come this summer like “Black Widow” and “F9,” it’s becoming increasingly clear that the two-hour theatrical release is far from secure. During the pandemic, studios found other avenues for sharing their movies with audiences. After a year of shutdowns, theaters are more heavily leveraged financially. While the studios could go forward without theaters, the reverse is not true. A lot of things have to go right for the two-hour movie theatrical release to endure.
Here are four reasons a return to theaters and moviegoing isn’t a sure thing.
1. The studios are calling the shots.
The halcyon days when top theater chains could threaten not to play any movie that violated their 90-day exclusive are gone. Now theaters have to take what they can get, like Warner Bros.’ 2021 simultaneous releases in theaters and on HBO Max and Universal’s “The Boss Baby” sequel “Family Business,” even if it’s available on the Peacock streaming service.
Some movies will still be exclusive to theaters, including the “Fast and Furious” franchise juggernaut “F9” (June 25). Studio bosses are not looking out for theaters — they’re attending to their own bottom lines — but they still need them.
“Nobody is friends in this business,” said Patrick Corcoran, a spokesman for the National Association of Theater Owners. “It’s all dollars and cents.”
2. Streaming is king.
The theaters believed that Disney would always be there for them. Every year, it releases tent-pole movies from Marvel (“The Avengers” franchise), Lucasfilm (“Star Wars” films) and Pixar (“The Incredibles”) — big-budget movies that are expected to compensate the studio for its less profitable releases. Those films can yield as much as $1 billion each in global box office. Of the 47 movies in the past 25 years that have crossed that magic threshold, Disney released 26. Whether the studio is temporarily making up for pandemic revenue shortfalls or leaning into Wall Street’s current love affair with streaming, theater owners are reeling from the news that some Pixar titles are skipping multiplexes altogether. Pixar has released 23 animated feature films to date — all smash hits.
It makes sense that Pete Docter’s Oscar-winning “Soul” went direct to streaming on Dec. 25 during the pandemic. But the next Pixar release, “Luca,” is going straight to more than 100 million Disney+ subscribers on June 18 — with no surcharge. Losing a Pixar movie at the theater isn’t about just the loss in grosses but also the family audience that buys overpriced popcorn and soda.
Sure, Marvel’s long-delayed “Black Widow,” starring Scarlett Johansson, will drive a huge weekend at the box office on July 9, but as with “Cruella,” theaters are sharing audiences with Disney+. Now all the major studios except Sony have launched streaming sites to compete with Netflix, and Amazon has bought the MGM studio. The streamers are fiercely competing with one another for content. They have huge maws to feed.
3. Older moviegoers are missing in action.
The pandemic scared seniors out of enclosed interior spaces. So far, younger audiences are driving the return to movies, but independent cinemas, especially, need older customers to come back if they are to thrive. Art films play in theaters over weeks and months to build awareness and value. That doesn’t happen without theaters. “Trying to get back your audience is a marketing challenge,” said Mabel Tam, head film buyer for the independent Landmark Theaters chain. “Every week gets a little better.”
Still, the fall lineup should pull grown-ups back, with films like Ridley Scott’s “House of Gucci” (Nov. 24) and “Downton Abbey 2” (Dec. 22). “The content through 2022 is a stocked cupboard,” said Chris Aronson, president of domestic theatrical distribution at Paramount. “No one is running out of food.”
4. The theater business is not growing.
We will never see another $11 billion year at the domestic box office — five in a row passed that benchmark, ending with 2019’s $11.3 billion. Over the next three years, fallout from consolidation, debt and leases will continue to shutter many cinemas. The strong will survive. The Alamo Drafthouse chain, for one, has emerged from Chapter 11 bankruptcy and plans to open new theaters.
But now more than ever, studios and theaters need synergy. Distributors can now create custom release patterns for their films. They’re learning what works, like getting the most bang from their marketing buck and reaching home customers with the right price points. And theaters are looking for alternate content, such as opera and sports events. “We’re all on a learning curve right now,” said Lisa Bunnell, the president of domestic distribution at Focus Features.
If they know what’s good for them, studios and streamers alike should look past Wall Street smoke and mirrors. “Audiences brand a title,” Mr. Corcoran said. “Look at the Oscars and Golden Globes. They didn’t tune in because the movies were out of the conversation.”
Nothing builds value for a title like three weeks in a movie theater with strong word of mouth.