Hollywood, COVID-19, and the Future of Movies
The global film industry has been experiencing drastic change since the advent of streaming video on-demand (SVoD) services. As these services grow in popularity, movie studios are shifting toward developing content for these services and less so for theatrical release. The COVID-19 standstill is magnifying these shifting consumer tastes. A recent article from WeForum’s Stefan Hall and Silvia Pasquini examines how the global film industry is transforming—for better and for worse—and how film studios and theaters are adapting to the future of SVoD services.
Theater Attendance Is Taking a Back Seat to Streaming
Movie theater attendance is declining worldwide. This is largely influenced by the immense popularity of streaming services like Netflix and HBO Max. As a result, film studios have less interest in theatrical releases. Say Hall and Pasquini:
“…The amount of time studios show movies exclusively in theatres before releasing them for sale, download or streaming [is shrinking]. Since the turn of the century, the theatrical window has narrowed by more than two months.
“This change reflects consumer preferences for content consumption, which increasingly favor SVoD. Many SVoD services are now owned or invested in by movie studios, which mitigates incentives to maintain a long theatrical window and intensifies an increasingly competitive streaming environment.”
What Lies Ahead
Hollywood’s business model is increasingly moving from third-party distribution and single-ticket sales towards owned distribution and recurring revenue, say Hall and Pasquini. With SVoD services, “a single movie or TV series is rarely a profit driver; rather, recurring subscriptions […] produce value.”
The authors continue, “Media companies no longer optimize releases for fixed schedules, primetime TV slots or popular holiday weekends. Instead, the goal is increased engagement, thereby improving user retention and data on content popularity.”
It is predicted that investment in content creation will come from distribution platforms like Netflix and Hulu instead of film studios. More film studios will bypass theatrical release. This will hit independent theaters especially hard, and they will need to come up with creative ways to keep audiences engaged. In the wake of COVID-19, movie financing will be riskier due to health and safety concerns, and independent companies will find it harder to raise capital. This could lead to a lack of diversity in movie content.
While this sounds bleak, this isn’t the definite end of the movie-going experience. There is still nothing like going to the movies—it is now a matter of creating a balancing act with streaming video.
You can read WeForum’s full article on the future of Hollywood in the wake of COVID-19 here: Can there be a fairy-tale ending for Hollywood after COVID-19?