Disney and Universal Pictures are the first studios to suspend the release of their box office data, amid the Covid-19 outbreak. Sony and Warner Brothers are expected to follow suit.
The closure of theatres around the world has prompted these actions. Disney said in a statement: “Given the large amount of theatre shutdowns around the globe, Disney will suspend global weekend reporting for the time being.” These figures are usually used to present popularity of box office movies. Furthermore, they are used as a marketing tool to promote the product.
The lockdowns around the world combined with travel bans have crippled the movies and entertainment industry. Estimates are that the global box office has already taken a hit of US$7bn. This could climb up to US$20bn if closures remain through May and into the summer.
Disney and Universal Pictures suspending release of data signals catastrophic impact
Universal’s Fast and Furious 9, a box office franchise colossus, with Furious 7 capturing over $1.5bn in box office revenue, has made the decision to delay its release by a year.
Movies that had just hit the box office, such as Disney’s Onward and Warner Bros’ The Way Back, have been hit hard by closures. Disney’s blockbuster for this period was its upcoming release of Mulan, due to hit screens at the end of March. The movie was mass marketed to appeal to its Chinese audience. However, with around 70,000 theatres in China shut as a result of the virus, estimates are that the studio will lose hundreds of millions in box office revenue.
Studio production will also take a hit
Included in these shutdowns is the impact on studio production. All major studios will have insurance for halted production, but it is currently unclear what will and won’t be covered through their policies. This is because such an outbreak has never been seen in modern times.
One thing the companies will cling on to is that the timing of Covid-19 is well placed in the calendar. Q1 is generally the quietest time of year for theatres and movie releases. However, if this outbreak stretches through to Q3 and even Q4, studios will be in trouble.
Most studios count on revenue they accumulate through late summer and the holiday season. This means that extended closures could be catastrophic for not only smaller studios, but the industry’s major players.
Postponement of the Cannes Film Festival, due to take place in May, could further hamper the health of the sector. Arguably the industry’s most prestigious date in the calendar, it has only been postponed for the time being. However, there is a distinct possibility of a complete cancellation after France’s ban on gatherings over 1,000 people.
If forced to cancel, it would be only the second time it has been forced to close its doors. The last time was during the first ever festival, which took place in 1939, two days prior to World War 2.
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