With the news that all Cineworld cinemas across the UK and Ireland temporarily closed from Friday 9th October, and the ODEON chain reducing opening hours, it poses the question that in a world of online subscription streaming services (SVOD) and video on demand, was the cinema industry already in decline? Has Covid-19 just been a final nail in the coffin for the cinema?

This decision comes as a result of the halt in releasing new films, the most recent being the newest addition to the James Bond franchise: No Time To Die – which has been delayed for the second time to April 2021. Boris Johnson also made a plea on Monday 5th October for people to return to cinemas and support the industry during the pandemic. This being further evidence to highlight the current struggle cinemas are facing. However, has this struggle predated Covid-19?

Recent Box Office/Cinema Admission Statistics

When examining the UK box office revenue from 2003-2019, it is clear that rates are prone to fluctuate. Taking only the last three years into account, there lies a decline. The 2019 stats show a -1.9% decline in 2018, which stood at 1,277.12m(£), and was even higher in 2017. A small decline is also seen when comparing the total monthly admissions in UK cinemas in 2018-2019, with 946,890 fewer admissions over the whole year.

It is important to acknowledge that this decrease in revenue is not majorly drastic. These statistics depend on an array of factors such as, what films are released, if we experience periods of nice/hot weather, or the cost of a cinema ticket. But with the release of big 2019 blockbusters, such as Avengers: EndgameFrozen 2 and Star Wars: The Rise of Skywalker, it is still surprising to see a decline. Therefore, with an already declining revenue and admission rate, it is possible to assume that, eventually, cinemas would have struggled to remain open.

The Power of the Online Streaming Service

“within the first three months of 2020, almost 16 million people signed up to popular streaming service Netflix”

According to the Motion Picture Association 2019 THEME report, the number of subscriptions to online video services around the world increased to 863.9 million, a 28% increase from 2018. In the US alone, the 2019 digital market, which includes streaming services, accounted for 56% of the combined theatrical and home/mobile entertainment market. This pointing to the fact that people don’t need to go to the cinema to indulge in the latest entertainment.

This pre-established engagement with online streaming then sky rocketed due to Coronavirus, which acted in speeding up the process of a transition to on-demand services. For example, within the first three months of 2020, almost 16 million people signed up to popular streaming service Netflix, almost doubling the figure from the final months of the previous year.

Similarly to cinemas, Netflix is subject to production delays, which means release schedules may be pushed back. However, the key advantage Netflix holds over cinemas is the wide variety of not only films, but TV shows and documentaries that audiences can re-watch or newly discover. The prime example being the whirlwind documentary Tiger King, which saw 64 million households introduced to the one and only Joe Exotic, right at the beginning of lockdown. Now with more than 182 million subscribers worldwide and an increased revenue of $5.76bn, it seems that “Netflix is and will continue to be the media company least impacted by Covid-19”, as eMarketer analyst Eric Haggstrom already claimed in April 2020. To put it bluntly, due to its online advantages, the service is gaining profit whilst cinemas are loosing out.

A Viable Alternative?

“releasing films during Covid-19 is not a recipe for success, and the closure of Cineworld is a prime example of this.”

With Netflix’s successes in 2020, the last film to be released worldwide in cinemas was Christopher Nolan’s Tenet. Warner Bros. took a gamble and released the film in the US on the 23rd July and worldwide on the 26th August 2020, despite ongoing Coronavirus restrictions.

Inevitably, Tenet did not live up to predicted estimations. The film had a smaller release with only 65-70% of cinemas being open in the US, and within those cinemas only operating at maximum 50% capacity the $20.2million weekend debut is unsurprising. To try and maximise profit, Tenet is remaining in cinemas for longer than the traditional window of 70 days, with Warner Bros. stating that due to unprecedented territory the film’s success is going to be “a marathon not a sprint”. However, with Warner Bros.’s quick decision to then delay the release of its next project Wonder Woman 1984 to December 2020, it is clear that releasing films during Covid-19 is not a recipe for success, and the closure of Cineworld is a prime example of this.

“audiences are willing to pay additional fees to access films through streaming services than go to the cinema”

On the opposite side, the release of Disney’s new live-action remake Mulan is the perfect example to show how a world would work without cinemas. In order to try and curb the challenges Covid-19 presented, Disney released Mulan online through its streaming service Disney+ in September 2020. Albeit gaining criticism for the $29.99 price tag that accompanied the release (which is higher than your average £10 cinema ticket), and calls for a boycott due to its all-white production team not being representative of the Chinese heritage of the film, Disney+ saw a 68% increase in subscriptions.

Making a total of $35.5million on its opening weekend in comparison to the $20.2million for Tenet, it proves that audiences are willing to pay additional fees to access films through streaming services than go to the cinema, which could be a glimpse into the future of new releases.

The future of cinema

“cinemas are slowly but surely beginning to fall out of favour with audiences, whilst the digital market is only seeing progression”

The fact that subscriptions to these services rose when people were confined to their homes seems blatantly obvious, so what happens when all lockdown measures are lifted?

Well, despite Netflix warning investors of the decline in viewership when governments lift lockdowns, this does not mean an automatic return to cinemas. Being subjected to a new way of life that has limited social interaction may mean that people have to wear a face covering, stay 2m from each other, or avoid being in confined indoor areas such as cinemas for a lengthy period of time. With feature-length films normally lasting over two hours, and the larger cinemas such as the London ODEON BFI IMAX holding up to 498 people, it seems unlikely that people will be rushing back even with safety measures in place.

Ultimately, the ease and variety that digital entertainment services offer, whilst still being able to keep up the social element compared to going to the cinema, have attracted us all – even before the pandemic. Recent data from 2019 proves that cinemas are slowly but surely beginning to fall out of favour with audiences, whilst the digital market is only seeing progression. With the cinema market fluctuating annually, and the alternative method of releasing big blockbusters through streaming services proving successful, the future for cinemas has never looked so bleak.

Lauren Russell

Featured image courtesy of Denise Jans on Unsplash. Image license can be found here. No changes were made to the image.

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