Hollywood looks ready to come down with a serious box office flu thanks to Covid-19.
What began as a few isolated coughs looks to be the start of a very long, and potentially very dangerous illness for movie studios. Recent news, such as the shuttering of the South By Southwest film festival shows how much the novel coronavirus can damage Hollywood. Early numbers out of China’s cinema industry paint a much grimmer picture.
The coronavirus that causes Covid-19 started making waves in mid January, swiftly followed by a massive quarantine effort in China. The timing could not have been worse: Lunar New Year celebrations, kicking off China’s largest box office season, started at the end of January. In 2019, China notched 2.14 billion dollars during the Janauary/February period. In 2018, it was a blistering 2.37 billion in sales. This year…238 million.
That’s a drop of just under 2 billion dollars, year on year.
The quarantine has led to the closure of 70,000 theaters in China. It also forced several large releases to skip live premieres and go straight to streaming. Upcoming Hollywood films slated for a Spring 2020 launch, such as Disney’s Mulan and the latest James Bond film, have had their Chinese dates erased. Films already in US release such as 1917, Dolittle, and Sonic the Hedgehog, have had to delay or cancel releases in China.
This was only the beginning.
The ripple effects of the virus quickly spread globally. Most famously, No Time to Die followed up on the China premiere cancellation by opting to postpone all premieres to the fall. (I hope somebody told the boys in marketing that if Covid-19 acts like a traditional respiratory flu, it usually flares back up in the fall…) The latest Mission Impossible outing has had to postpone shooting in Italy due to the outbreak there, delaying the film indefinitely.
Small movies felt the burn as well. Prominent indie festivals like SXSW and others, have been canceled or had promoters pull out. Many of the smaller films shown there desperately rely on such festivals to generate awards and buzz. Without it, many may not see wide release.
There is some relief to be found. Two big releases in China, Lost in Russia and Enter the Fat Dragon, negotiated deals to premiere online. Disney+ cancelled some Asian press events, but was able to resort to a digital ad campaign.
Unlike any other period in cinematic history, studios have options these days. Digital media and global distribution can move films around that would simply have died upon missing a timely debut in prominent markets. Some of those indie films affected by SXSW cancelling will at least be able to pivot to online streaming platforms, either for marketing and promotional work or for their full release.
It’s bitter medicine, but at least better than swallowing entire budgets for films that nobody is going to risk going out to see.
Long, Slow Burn.
Looking at our weekly Box Office Wrap Up, we’ve been anxiously scrutinizing the trends. As of yet, the US box office hasn’t come down with the bug…though the weekly figures have pretty uniformly been down modest amounts compared to 2018 and 2019.
That’s not to say losses haven’t begun to accrue. The first three months of the year tend to feature riskier projects: either films with limited appeal, tight budgets, or shaky studio projections. Sonic the Hedgehog managed to beat predictions for its US release. Unfortunately, films like Doolittle and Call of the Wild have not. Getting locked out of China could kill those films. In past years, China has been a godsend for US flops, a backstop where so-so movies can thrive so long as they feature big visuals.
We’re just at the beginning of this thing. Infection rates are trending down in China, prompting hopes of a quick fade that allows theaters to get back on their feet. Sadly, aftershocks will be real: notable Asian directors Wong Kar-Wai and Jia Zhangke have both shelved production for upcoming movies. That’s going to have knock-on effects for studios, craftsmen, and the locales that rely on drawing movie productions to generate revenue.
Global cinema is about to go through a serious stress test. Can mitigating factors such as streaming and concentration (Disney, who owns pretty much everything, is unlikely to wind up begging in the streets) prevent a prolonged collapse? We’ll have to cross our fingers.
After washing our hands, naturally.