Do you remember the last time you were in a movie theater with your friends? COVID-19 has affected all our daily activities, including how we watch movies. Due to the stay at home orders and social distancing requirements, people are hardly able to go to the movie theaters; instead, we are relying more on at-home solutions. The movie industry has also been affected tremendously, leading them to look for alternative business models to survive.
Even before the pandemic, movie-theater-goers have declined over time as streaming video services have taken over. In 2014, a poll showed that about 60% of total movie watchers prefer watching movies at home compared to watching in a theater. There are many different reasons, such as the comfort of staying at home, flexibility of time, and choice of selections. There are a plethora of streaming video sites such as Netflix, Hulu, Amazon Prime, and Disney+ to choose from, all with different types of films. Additionally, if you couldn’t find the film you wanted to watch streamed on the sites you subscribed to, you can rent the movie either digitally from iTunes or Amazon, or a physical location, such as Redbox. Due to the benefits of watching at home, the sales for movie tickets have stayed around the same from 1995 to 2019, according to the World Economic Forum, although the total movies watched increased tremendously in these years.
Consumers have widely adopted video streaming, especially during the pandemic. As a result, the number of subscriptions and revenue from these services is booming. According to Variety, at least 80% of U.S. consumers subscribe to at least one paid streaming service, which is up from 73% before the pandemic. However, the revenue that movie studios earn from these subscription-based services is very marginal. To make money, companies like Disney are pushing “early access” tickets to hit movies. For example, the movie Mulan was released on Disney+ on December 4. But if you paid the $30 purchase price, you were able to watch it starting September 4. Some studios refused to release certain movies, such as Sonic the Hedgehog, on streaming platforms and used the classic “buy or rent” pricing on services like iTunes and Amazon. Other times, streaming services made exclusivity deals with movie studios for a period of time. For example, Warner Bros recently signed a contract to exclusively feature their 2021 films on HBO Max for at least one month after release, the same time as the movie will be featured in theaters. However, all these are hardly sufficient to make this industry thrive within the pandemic.
At the same time, movie theaters are struggling to keep themselves afloat. Movie theater attraction has already started declining before the pandemic, but the pandemic has frozen their entire business. According to CNBC, since major theaters reopened in August 2020, the North American box office has “garnered just $123.6 million in ticket sales”. Besides, people aren’t likely to return to theaters any time soon. John Sloss, the founder of Cinetic Media, says that he is “not optimistic about the current state of the theatrical experience”. Smaller theaters already went out of business, and recently, even AMC Theaters had to declare Chapter 11 bankruptcy.
A key benefit of movie theaters was to provide people social interaction opportunities and a high-quality movie watching experience. Fortunately, there already are services such as this Netflix Party Chrome extension that allows you to watch content in real-time with friends while all being on separate computers. Along with being able to sync timestamps with each other, you can also use it to chat with your friends while watching content. Additionally, services like Netflix now stream 4K content if your device is compatible. Unfortunately, the experience of going to a theater cannot be entirely replaced, but with technological advancements, watching movies at home will be further enhanced.
Although we are still in the midst of pandemic and not able to enjoy our routine social activities, at least we can have fun watching our favorite movies at home. Hopefully, soon we will again be able to hold our movie parties in our beloved theaters.
Sources:
https://www.statista.com/statistics/299170/preferred-movie-watching-location-theater-home-usa/
https://www.cnet.com/news/mulan-disney-plus-free-2020-movie-new-live-action/
https://www.businessinsider.com/how-to-rent-movies-online
https://www.theverge.com/22152626/hbo-max-2021-movies-release-date-matrix-dune-suicide-squad
https://www.cnbc.com/2020/10/20/amc-warns-that-bankruptcy-is-on-the-table-as-cash-runs-low.html