box office

Coronavirus Will Have ‘Disastrous’ Effects on the Movie Business

“It’s going to change viewing patterns. It’s going to change behavior. It’s going to change the way people consume entertainment.” Photo: Mladen Antonov/AFP via Getty Images

As concern over the spread of COVID-19 mounts, Hollywood is facing a doomsday scenario of its own: the cancelation of blockbuster-movie season. On Tuesday, MGM, Universal, and producers for the 25th James Bond installment No Time to Die decided that it was no time to release a presumptive billion-dollar earner into a global movie marketplace convulsed by panic over coronavirus, punting the $250 million spy thriller from an April 2 release into a Thanksgiving theatrical frame. At a time when China — the world’s second biggest box-office territory — has mandated closure of most of the country’s 70,000-some theaters, and moviegoing attendance in such Asian boom markets as South Korea, Japan, the Philippines, and Taiwan is dwindling into insignificance, uncertainty surrounds the potential rollout of other mega-budget tentpole films including Black Widow (May 1), F9 (Memorial Day weekend), Wonder Woman 1984 (June 5), and Top Gun: Maverick (June 24). The sum of all studio-executive fears? That quarantine efforts could force 2020’s biggest releases to move out of summer’s most lucrative months and into the fall or — even more cataclysmically — spring 2021, lest risk the ruinous ignominy of flopping.

The worldwide coronavirus death toll currently stands at over 3,200 with no vaccine or diagnostic breakthrough in sight. But weeks before being upgraded from a public-heath scare to something closer to a global pandemic — with a state of emergency declared in California on Wednesday — the outbreak began to rattle the movie industry in earnest. In January, the Chinese government canceled several high-profile local-language film releases around its peak Lunar New Year distribution corridor. (The country sold $4.2 million worth of movie tickets between January 24 and February 23, a stark contrast to last year’s $1.76 billion in the same period.) And in what can only be described as “when China sneezes, Hollywood gets a cold” force majeure, the Middle Kingdom releases of Jojo Rabbit, Sonic the Hedgehog, 1917, Little Women, and Dolittle were indefinitely delayed last month (effectively killing their box-office profitability when you factor in the country’s rampant digital piracy).

From there, Disney (which set a global box-office record in 2019 with over $11 billion) pressed pause on plans for the Chinese theatrical distribution of its live-action version of Mulan — a calamity of the first order for the Mouse House, which had specifically tailored the $200 million adaptation of a Chinese folk tale to appeal to Chinese audiences and landed a rare, simultaneous Asian and North American rollout from Chinese film authorities. (Its March 27 domestic rollout remains intact despite reported internal discussions to postpone Mulan’s overall release.) “The market should have been China,” says an industry executive who “begged” the studio for such a delay. “They should have held the movie for a year. They didn’t and it’s going to be a bomb. Mulan is going to be a big blemish on Disney.”

As the second-largest film market outside of North America, China’s moviegoing sector has been crucial to the success of four-quadrant-appealing films like Avengers: Endgame. Now, some analysts believe coronavirus could result in a loss of at least $5 billion from diminished box-office returns and impacted production across the film industry. And in the latest bellwether of Hollywood’s increasing dependence upon international ticket sales to shore up domestic theatrical stagnation amid a 5 percent year-over-year decline at the box office, industry sources tell Vulture that studio executives are monitoring things “day by day, hour by hour” before spending big on prints and advertising campaigns and branching out into foreign territories.

While Hollywood weighs the financial exposure of releasing its splashiest fare into a theatrical landscape hugely affected by viral panic, a growing number of top-tier media companies are maneuvering to limit their staff’s physical exposure by reigning in travel, discouraging face-to-face meetings, and pulling out of a growing number of festivals and conferences. On Wednesday, the powerhouse Creative Artists Agency implemented a temporary policy asking agents to conduct negotiations by Skype, FaceTime, and phone rather than risk the spread of COVID-19 contamination by bringing clients into the agency’s headquarters. On Thursday, WarnerMedia, Starz, and Lionsgate joined a growing list that already included Netflix, Amazon, and Apple in skipping the Austin, Texas–based SXSW (which runs March 13-22) out of coronavirus concerns. Disney+ scotched a two-day press launch in London this week for the same reason. The Cannes, France–based television conference/marketplace MipTV canceled its March 30-April 2 run due to the virus, casting serious doubt about business as usual on the croisette at the Cannes Film Festival (taking place May 12-23). Cinemacon, the annual Las Vegas gathering of movie studios and theater owners, plans to press ahead later this month, albeit with enhanced health and sanitary measures, including “an abundance of hand sanitizer, efforts to reduce crowding around buffets, increased cleaning efforts by the hotel, medical assistance teams and extra trash bins.” And Paramount halted production on Mission: Impossible 7, which had been scheduled to shoot in Venice, Italy (where the virus’ infection rate currently ranks as the world’s third worst).

To hear it from John Penotti, co-CEO of Ivanhoe Pictures, the Santa Monica– and Singapore-based production company behind such Asia-centric projects as Crazy Rich Asians and Netflix’s The Sky Is Pink, coronavirus has been more impactful vis-à-vis executive exit strategies than on TV- and movie-shooting schedules. “In addition to concerns about contracting the virus, one of the challenges is, will there be travel restrictions imposed either by the countries we are working in or the U.S.?” says Penotti. “We’re willing to take every precaution with the virus. But outside of that, are we able to travel freely back and forth from these different countries that have been affected? That’s a concern.”

As rumors swirl that Disney is considering moving the Scarlett Johansson standalone Black Widow’s theatrical bow onto the November 6 release date currently occupied by Marvel’s Eternals, the summer debuts of such foreign-ticket-sales-dependent hits-in-the-making as A Quiet Place Part II, The New Mutants, In the Heights, and Trolls World Tour remain in question — arguably the shakiest distribution slate in the modern blockbuster era. For their part, Universal, Disney/Marvel, Warner Bros., and Paramount are keeping cards close to vest about any planned movie-release shuffling. But an 11th hour No Time to Die–style delay remains very much on the table for them all, and with it, the unprecedented prospect of a popcorn movie season bereft of blockbusters.

In the meantime, the entertainment industry’s newly received wisdom holds that streaming services are set to benefit most from COVID-19 with the outbreak potentially rewiring the way consumers choose to consume movies for years to come. “This is where streaming becomes normalized for the world and it’s going to be disastrous for the entire industry,” says chief executive of Artist International Group David Unger, echoing an increasingly common refrain. “As far as production blackouts and all that stuff, it’s too early to tell. But who wants to go to the theater right now? Do you want to go sit in a room with a bunch of people that are coughing? It’s going to change viewing patterns. It’s going to change behavior. It’s going to change the way people consume entertainment.”

Coronavirus Will Have ‘Disastrous’ Effects on Movie Business