Hollywood Braces Itself For A 40% Decline In Revenues In 2020

With the global pandemic, less than 1% of the movie theaters in the world are presently open and almost all of America’s 5,400-plus theaters have been shut since March. As a result, the biggest Hollywood releases have been pushed to now release later in the year or even next year.

Most recently, Disney moved the release date for Mulan from March 26, to July 24. While Warner Bros. has pushed back Wonder Woman 1984’s release from early June to August 14, it is sticking to July 17 for the release of Christopher Nolan’s Tenet. Paramount, on the other hand, has chosen to release A Quiet Place Part II in September and Top Gun: Maverick in December. It is safe to assume that most of the big production houses are hoping to have the theaters running by July.

The postponing of the release of films like F9, Jungle Cruise, The Eternals, Minions: The Rise of Gru and the new Ghostbusters film, to 2021 alone will result in a $1.8 billion plus loss in  revenue.

If the theaters do open up to full business by July, according to the London-based research firm Gower Street Analytics, the North American box office revenue for 2020 will barely be able to reach the $7 billion mark. In the best case scenario, if the theaters do get running full-fledgedly by July, the estimated earnings would be $ 7.09 billion, a marked 40% decline from 2019’s $11.4 billion; the lowest earnings in more than 20 years. In a worse scenario, where the theater lockdown extends beyond July or they do not open to big numbers immediately, the estimated earnings stand at a low of $6.36 billion.

According to the National Association of Theater Owners, it was in 2000 when North American box office revenue last totalled at $7.5 billion or lower. 1999 saw a revenue of $7.33 billion, while 1998 raked in $6.86 billion. “The studios have looked at the situation and realized they cannot fit everything into the end of this year. They’ve had to accept that this year is going to take a big hit,” says Gower Street head of theatrical analytics Robert Mitchell. 

The global situation, too, is equally bleak. Theaters in China have been shuttered since January and while they opened for a short window last month, they have been locked down again. Global box office revenues raked in $42.2 billion in 2019 and if the present scenario is any indication, the numbers are set to drop to $22 – 25 billion, this year.

While films like Emma and the Ben Affleck-starrer The Way Back have opted for VOD releases, most bigger titles are holding out for a theatrical release. “I think people will want to go to the movies once this is over, but it will be a process for people to build their confidence,” says Paul Dergarabedian of Comscore, according to a THR report.

While the study proves that 2020 will be a year of losses for theaters across the world, it also points to the sadder reality of independent theaters across the country. If the biggest names in Hollywood are bracing for unforeseen losses, one can imagine the anxieties of smaller theaters which almost never release blockbusters and concentrate on popularizing independent and niche films. While some of them are partnering with distribution houses to hold virtual screenings, some are bracing themselves for the storm to pass.