During a pandemic, the close quarters of a movie theater are among the last places anyone would want to be. Already, the outbreak of the novel coronavirus has led cinemas in northern Italy and all across China to temporarily shut their doors. The reality is that soon U.S. exhibitors such as AMC, Regal and Cinemark may have to do the same — or suffer a massive decrease in patrons anyway. Studios are even starting to delay film releases, with MGM and Universal Pictures announcing last week that they will postpone the opening of the latest James Bond movie, "No Time to Die," from April until November.
There's still a lot of uncertainty about how badly the coronavirus will spread and what it will do to the economy. But what is clear is that the disruption couldn't come at a worse time for the U.S. movie theater industry in particular, where AMC Entertainment, Cineworld Group (Regal's parent company) and Cinemark Holdings together control nearly half the cinema screens and ticket sales. That's in addition to theaters they operate in Europe and Latin America.
The U.S. box office fell about 5% last year to $11.3 billion. Theaters were already bracing for the sudden deluge of streaming-video services, which have been spending like mad on original content. New offerings from Apple, WarnerMedia, NBCUniversal, Disney and so on may result in more people reserving trips to theaters only for the big blockbuster films.
WarnerMedia's HBO Max is set to launch with a catalog of Warner Bros. movies in May, while NBCUniversal's Peacock service coming next month will draw from its own film library. Disney+ has already managed to sign up more than 25 million subscribers, and Netflix has signaled that it's stepping up film investments after receiving 24 Oscar nominations, including for "The Irishman," "Marriage Story" and "The Two Popes."
As Disney turns its attention to streaming, it also doesn't have as large of a must-see theatrical film slate this year, having pushed off "Avatar 2" to 2021 and the next "Star Wars" to 2022. Even before the coronavirus outbreak, Rich Greenfield, an analyst for LightShed Partners, was predicting a double-digit drop in the domestic box office. "As we look at the overall film slate for 2020, we simply do not see the excitement that will drive top 10 attendance," Greenfield wrote.
Disney's perhaps most-anticipated release is the live-action remake of "Mulan," which is set in ancient China and features an all-Asian cast. As of March 4, teasers for the film were still promising a March 27 opening. That said, a delay may be inevitable with Chinese theaters still closed and U.S. theaters starting to give off that petri-dish vibe.
"Health-related epidemics, such as flu outbreaks, could cause people to avoid our theaters or other public places where large crowds are in attendance," said a Cinemark official, part of a list of boilerplate-type risks that most people might gloss over during normal times. Now that risk has become very real. So much for all those costly theater renovations if nobody can even attend.