Hollywood at a Crossroads: Studios Face Tough Choices on How to Reach Audiences as Coronavirus Worsens

Rebecca Rubin
·9-min read

In Hollywood these days, the only certainty is that nothing is certain.

Already, the coronavirus pandemic has been responsible for some shocking developments in the film world: “Tenet” keeping its release date, “Wonder Woman 1984debuting on HBO Max and “Mulan” eschewing U.S. theaters for Disney Plus, to name just a few.

As the new year beckons, one thing is clear: Don’t expect the tumult to end in 2020.

Release date delays, or the prospect of sending studio movies to streaming services, might seem obvious or expected at this point in the pandemic. Yet traditional Hollywood players are still struggling to navigate a new movie distribution landscape, one with contours that are being charted, smudged out, and redrawn again on the fly.

Though most major movies have been shuffled to summer of 2021 or beyond, there are still some high-profile movies on deck for the first few months of the new year. But industry experts admit it’s unrealistic to assume the coronavirus crisis will drastically improve by January, even with promising potential vaccines having wrapped up their clinical trials. California is on the verge of new stay-at-home orders as COVID-19 cases hit an all-time high in the state, and other parts of the country may follow suit if the situation worsens during the holidays.

That means people won’t be returning to the movies anytime soon. As a result, executives have the unenviable job of making massive decisions, most of which are rooted in financials, that may have lingering reverberations. How each studio is adapting remains unique to individual companies, but it’s all pointing toward a future with unpredictable moves looming. In recent weeks, studio chiefs across Hollywood have been forced to take another look at rough cuts or nearly finished versions of upcoming releases through a new, singular lens: Does this warrant a traditional theatrical release?

To answer that question, one has to first consider what constitutes a traditional theatrical release these days. Over 60% of U.S. theaters are closed, making it difficult for studios to justify keeping movies on the big screen without a calculated plan B.

Warner Bros.’ contingency plan is considering sending several films to HBO Max, a la “Wonder Woman 1984.” With the “Wonder Woman” sequel, Warners anticipates keeping the Gal Gadot-led superhero adventure on the big screen for the standard theatrical window (typically about three months), with the major caveat that it will be available on the subscription streaming service HBO Max for the first 31 days of release. After the one-month mark, “Wonder Woman 1984” will be pulled from HBO Max and will only be available to see in theaters until it reaches the traditional home entertainment frame.

Many assume that decision, a shocking break from industry protocol, to be a one-off. But insiders suggest that may not be the case. According to sources familiar with discussions, “Judas and the Black Messiah,” a biographical drama starring Daniel Kaluuya and Lakeith Stanfield; Denzel Washington’s crime thriller “The Little Things;” and the “Tom and Jerry” remake could all see a hybrid HBO Max/ theatrical fate similar to “Wonder Woman 1984.” The studio also considered taking the same route with “Mortal Kombat, an adaptation of the popular video game, but expect to delay the film’s theatrical debut instead.

For now, movie theaters haven’t balked at Warner Bros.’ decision to open “Wonder Woman 1984” day-and-date — meaning on HBO Max the same day it arrives in theaters. It’s unclear how cinema operators will respond to studios making analogous moves. But months into a global health crisis that has decimated their business, film exhibitors would be ill-advised to deny any movie that could sell tickets.

Warner Bros. is hardly the only studio prioritizing streaming. Disney, the studio that shifted “Mulan,” Pixar’s “Soul” and “Artemis Fowl” on Disney Plus, has been similarly weighing the option of altering plans for upcoming titles to bulk up its subscription streaming service. Deadline recently reported that Emma Stone’s “Cruella,” “Pinocchio” and “Peter Pan and Wendy” could skip theaters in favor of Disney Plus debuts. But more pressing: there’s been little chatter about two movies from the Disney-owned 20th Century Studios — the YA musical “Everyone’s Talking About Jamie,” slated for Feb. 26 and Matthew Vaughn’s “The King’s Man,” set a couple of weeks earlier on Feb. 12. Could a Hulu or Disney Plus bow be in their futures?

The fate of other movies expected to be unveiled in early 2021, like Sony’s “Cinderella” remake with Camila Cabello (Feb. 5) and Jared Leto’s “Morbius” (March 19) still remain in question. But it wouldn’t be unexpected to see the trend of nearly constant release date changes continue into the new year. Across Hollywood, executives are expecting the film calendar to remain fluid for the near future.

With that in mind, it’s possible that MGM’s “No Time to Die” will move again after being pushed from April to November to the spring of 2021. The Bond sequel is currently scheduled to premiere on April 2, 2021, but the movie’s financial backers are wary of being the first blockbuster out of the gate because its core audience skews older, a demographic that’s been more reluctant to go to the movies during the pandemic.

Paramount has been an active seller during the coronavirus shutdown, shipping the likes of “Without Remorse,” “Coming 2 America” with Eddie Murphy and Aaron Sorkin’s “The Trial of the Chicago 7” to Amazon and Netflix and reaping hundreds of millions of dollars in the process. However, the studio doesn’t seem to be on the verge of selling any more movies.

Universal is plunging ahead with plans to release several films in the theaters that remain open during the pandemic because it has worked out deals to put them on-demand within a few weeks of their bows. AMC and Cinemark, the No. 1 and No. 3 U.S. movie theater chains respectively, are already on board with Universal’s strategy to shorten the theatrical window and bring movies more quickly to the home. Sources say the studio is close to forging a similar deal with Regal, the second largest circuit in the U.S. and the last remaining standout. That’s significant, because the three circuits combined represent over 50% of the U.S. market. The reason that Universal orchestrated these agreements in the first place was to avoid the possibility that movie theater chains would refuse to showcase the studio’s movies if they land on demand sooner than usual. (Over the summer, AMC’s CEO Adam Aron threatened such an action after Universal released “Trolls World Tour” simultaneously in theaters and on digital rental services.) Assuming the Regal deal is complete soon, the studio will have confidence to forge ahead with abridged theatrical windows without fears that it may lose out on substantial screens. Of course, that’s assuming struggling theater chains survive the next few months.

Universal deployed its new model with some success last weekend with “The Croods: A New Age,” earning more than $14 million its first five days in theaters. A year ago, that would have been a disaster. During coronavirus, it’s practically given the second “Croods” movie blockbuster status. Upcoming releases from Universal and its indie division Focus include revenge thriller “Promising Young Woman” and “News of the World,” a Tom Hanks drama that the studio did a little risk mitigation on by selling foreign rights to Netflix.

Siphoning off movies to the Netflixes, Amazon Primes and Hulus of the world would appear to be the obvious temporary solution, but insiders say it’s more complicated than flipping a switch. Studios have to take a look at contracts that may promise some kind of theatrical release, as well as renegotiate backend deal with financial partners and talent before making any announcements in the press. In the case of “Wonder Woman 1984,” insiders say that Gadot and director Patty Jenkins received generous backend deals after agreeing to send the film to HBO Max. The pair may never have hit the necessary milestones to trigger that money in the current environment, given that many theaters are closed and cinemas still haven’t opened in New York City or Los Angeles. But in pre-pandemic times, the sequel to 2017’s “Wonder Woman” would have likely been within reach of the billion-dollar mark. The original superhero adventure generated over $800 million at the worldwide box office.

Further complicating matters, studios have to play a seemingly unending game of phone tag to get all parties to sign off. Some of these actors and directors have moved on to other projects, many of which are shooting in the U.K., Australia or other exotic locals that wreaks havoc on aligning all the timezones.

If the director, major stars or producers can’t be convinced that digital debuts are their best option, the alternative is to continue kicking movies down the road. But then, they run the risk of an even more uncertain theatrical environment. There’s no indication of when moviegoing will return to a significant degree, which means waiting can be equally as risky as taking a bold bet on a streaming service. When “Tenet” premiered in September, 70% of U.S. movie theaters had reopened. By Thanksgiving, hundreds had shuttered again, leaving roughly one-third in business. The number of screens to play a movie could keep dwindling, especially if independent cinemas don’t receive federal relief.

And there are movies that have to contractually open overseas. It’s harder to convince filmmakers to move them, since essentially every country outside of the U.S. has had significantly more success controlling coronavirus, and key markets, particularly in Asia, have already fielded big box office hits. But keeping the release date internationally causes problems beyond just piracy concerns for its eventual domestic release. It’s hard to re-hype up a movie that feels like its moment has already come and gone.

That was the situation with “The Personal History of David Copperfield,” an adaptation of Charles Dickens’ novel that Fox Searchlight released at the end of August, seven months after it launched theatrically in the U.K. “Copperfield” had originally been slated to premiere domestically in the spring until COVID upended those plans. It’s a bigger issue with independently financed productions, which rely on a foreign pre-sale process in which producers auction off distribution rights for key territories in order to raise the money to make a movie. Unwinding those deals and getting all of the parties to comply with a new release plan during a pandemic can be difficult.

Studios executives keep talking hopefully about a return to “normal” they predict may come in the summer when a vaccine is widely available. However, few think that the industry will be able to quickly shake off the financial devastation of the past few months. Moreover, how movies open in theaters has changed perhaps irrevocably. That reality is the new world order that studios will be operating in when the pandemic finally ends.

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