Are the Movie Theaters Dead? Part II

                                        

Hello, It has been 6 years ago today since I started my blog. A lot has changed since I started my blog, and that my friends, is the understatement of the past 6 years. The last blog I posted back in June, was about the current state of the movie theaters, that blog is now outdated despite the fact that it is less than 2 months old. So, I have decided, in true Hollywood fashion, to put out a sequel while the paint is still drying on the first one. First, I will begin with something that I never expected to become outdated, and that is, the law that prohibits movie studios from owning their own theaters. Last week, the department of justice and a federal judge eliminated that law. If you are interested in my more in-depth analysis please check out my most recent episode of “In the Mind of Mr. Bee”. ((Go To my Facebook page)

Let’s move on, two weeks ago Universal and AMC made a landmark deal that could shorten the theatrical window to just 17 days. To more accurately understand this, let’s have a brief history lesson. The theatrical window is the amount of time between when the movie comes out in theaters to the time you can purchase it for your own viewing pleasure. This window came about sometime in the early ’80s when VHS tapes were the new thing, and during this time the theatrical window was a whole lot longer, we are talking almost a year! Sometime in the early 2000s, the window was shortened to about 74 days for digital and 90 days for physical media (DVD, Blu Ray, etc.), to about 3 months. This brings us back to today, or at least 2 weeks ago. The full terms of the deal have not yet been disclosed, but the crux of it is it will see Universal movies playing in AMC theaters for 17 days or 3 weekends before Universal can put the movie on Video On Demand (VOD). Now, AMC and Universal have clarified a few things. Number one, Universal has said they will not be doing this for all of their movies, so there will be some that will be at the 90-day window. As to which of the movies this will be, we do not know and I am not sure Universal knows. Also, the movies will not necessarily be pulled after 17 days, meaning that a movie could be in theaters while you are able to watch it at home. Now AMC’s two biggest competitors (Regal and Cinemark) are against the deal. The CEO of Regal’s parent, Cineworld, blasted the deal, calling it “bad for business.” Cinemark’s CEO was a little bit kinder by simply "saying that shortening the theatrical window could have an adverse effect on their business." Despite being offered by AMC the other studios have yet to sign on to the deal. Granted, the CEO of Viacom (Paramount’s parent company) said that the theatrical window does need to be shortened, but he gave very little detail. A Lot of independently owned theaters are against the deal and fear that this will eventually put them out of business. 

Now let’s take a look at Disney. At the end of last quarter, while on a conference call with investors, the CEO Bob Chapek, announced that Mulan would be going to Disney+, but with a catch, there will be an extra $30 fee.  Chapek did make it clear that they are looking at Mulan as a “one-off event”, but you need to keep in mind that what Chapek says and does are two different things. Now before you get sticker shock over the price, let’s do the math; depending on the number of people in your party, you could pay that price or well above, for example, a family of 5 would be about $70 just for admission. Disney does have some problems with the numbers though, to understand this let’s break it down. Mulan has a $200 million budget, add in the marketing price (which they finished in March!). Disney has not released the marketing budget, but I would estimate that Disney needs to make $300 million to break even. Now with it being released on Disney+,  Disney will get 100% of the profits, so to break even Disney would need 10 million subscribers. On the surface, 10 million subscribers don’t seem like much, but Disney only has a 60 million subscriber base, which compared to Netflix’s 182 million subscriber base, it is a little high to expect to get 10 million subscribers to pay. Now, remember this is only to break even and an estimate on my part, so the number of subscribers needed could be even higher, but probably not much lower. If you are wondering why Disney is taking this chance, it was done on the day that Disney reported a loss of nearly $5 billion dollars, so it was a way to get the shareholders to “look the other direction” and it worked. 

In conclusion, the shortening of the theatrical window is inevitable, but will it be 17 days? Probably not, more likely the new standard will be 30 to 60 days. For the reasons I laid out, Disney's new “premiere access” venture will not become the “new normal” (crazier things have happened!) Just for the record no, I will not be paying the extra $30, but I would have gone to the theater. Starting next week Movie theaters will be reopening in parts of the US, and have already opened in most other parts of the world, but as for me and other New Yorker’s we must continue to be content with Disney+ and Netflix. This pandemic will be remembered for a lot of reasons, for me personally I will never forget watching a 130-year-old industry go haywire right before our eyes!

Goodnight, and Bee Happy!™  

Mr.Bee 

copyright 2020 Bradley Entertainment All rights belong to Mr. Bee and if anybody breaks this copyright they will have to spend ten years as my personal slave, and thanks for your understanding.

 image courtesy of  AMC Theatres