We’re about to see how strange things can get.
There’s a campaign being planned by exhibitors, studios, talent agencies and others to encourage people to head back to the movie theaters that have been closed for about two months through the worst of the Covid-19 pandemic. While the details appear to still be in flux, the campaign would involve some mix of PSAs featuring top-tier talent. There are also plans to test the waters of audience comfort by placing older popular movies in theaters, with marketing efforts supporting those releases, which would happen in advance of July 1st.
A number of stories and surveys have come out over the last several weeks with information on what kind of audience attitudes are out there regarding heading back to the theaters. 90 percent of respondents to one survey said they were uncomfortable doing so until a Covid-19 vaccine was available, and 70% said they’d prefer to watch new movies at home until that happens. That’s good news for most of the major studios, which have more to gain by shortening the existing theater-to-home video window, though NATO has warned otherwise.
Even if people do come back in any volume and there’s no second wave of virus outbreaks (and no further closures because of the ongoing protests that are sweeping across the country), box-office is expected to be down by around 50 percent in 2020. That could be even lower if more cities follow San Francisco’s lead and don’t allow for theaters to reopen until mid-August, after the scheduled release dates for movies like Tenet and Mulan that Warner Bros. and Disney, respectively, are counting on to make a big splash.
More and more theaters across the country are opening up again, including in California later this week, though AMC Theaters (which is facing significant financial issues due to its debt load) has said it won’t until there’s actual new material from studios. That could throw a sizable monkey wrench in the planned reentry campaign, but not the biggest.
The biggest could come in the form of an advertising landscape that’s changed drastically in the few short months since things shut down.
Even before the Covid-19 pandemic turned the media world upside down it seems advertising efficacy was being called into question. A study last month reported decision makers were reconsidering TV advertising in particular, planning to reduce budgets because that medium just wasn’t working for them.
The pain is being felt throughout the industry. The IAB reported a majority of publishers have seen advertisers pull back or paused planned spending. One has to believe that a significant chunk of that was the result of the theatrical film industry disappearing almost completely.
Now there’s a report TV networks are pushing back against media buyers who want big rate cuts, in part because so many companies have either disappeared or made massive changes means fewer parties with deep pockets competing for airtime. That’s likely to get worse depending on when studios wind up making further adjustments to their release calendars, continuing to reduce how many players are looking to buy up ad time as well as the volume of each individual effort.
To what extent that happens remains to be seen. At this point Hollywood studios are releasing just a fraction of the titles originally planned for 2020, and that percentage could fall further if it seems people aren’t ready to head back to theaters or if something even more tragic occurs. It seems like every month this goes on winds up pushing things out at least four months, so the impact of this will be felt well into 2021 in all likelihood.
More advertising money could be put into platforms like Facebook, not media companies, since they will be the only player left standing at the end of this as hundreds of outlets around the country close or are whittled down to a shadow of their former selves. That, as it has done for the last several years, will only make matters worse for the overall industry and have repercussions down the road for quite a while.
Right now the limited reopening of businesses across the country has been a mixed affair, with states in some regions seeing increased infection rates. And the protests that have roiled the country in the last week has made the situation even more complex, as they have resulted in some businesses closing almost as soon as they were open again.
Of course it goes without saying that the success of whatever films are released to whichever theaters are open hinges on the volume and intensity of the campaigns that are run in support of them. That’s something that’s always true. While the premium VOD releases studios have experimented with recently probably haven’t brought in as much revenue as theatrical would have, budgets are something that can be adjusted.
More importantly, ad campaigns that have direct revenue attribution will be prioritized by studios looking to account for every dollar they’re spending. Online media offers just that kind of accountability and tracking, something that will make them very attractive.