-->
Have you voted in the 2020 Streaming Media Readers' Choice Awards? Vote Now!

Is the Pandemic the Death Knell for the Multiplex?

Article Featured Image

A few years ago on a flight to Amsterdam for IBC, I spent a bit of time looking through the in-seat entertainment (ISE) to find a movie I'd not yet seen. I settled on a movie from the Shrek series, so between dinner and the occasional request to stand up to allow aisle access to a middle-seat passenger, I'll admit to laughing out loud a few times and leaning toward the tiny screen to catch up on the antics of Shrek, Fiona, Donkey, and Puss in Boots.

Once I got to the convention center, I found out that the same movie was going to be playing in the main auditorium, showcasing a sponsor's highly tuned Digital Cinema Initiatives (DCI) projector coupled with a high-end projection screen and sound system. My first inclination was to brush off the screening, since I'd already seen the movie on the ISE monitor and there's so much to explore in Amsterdam. But I finally decided to attend, because a few of the songs are catchy and the audio on airline earbuds—with overhead announcements, the roar of the engines, and side conversations—leaves quite a bit to be desired.

What a completely different experience! The colors were crisp—and not just because the lights were dimmed and the DCI-compliant projector used very high bitrate compression with a wide color gamut—and the sound was immersive in a way that the ISE experience couldn't capture.

A few friends and I watched the same movie on DVD a few weeks later, and the experience was a middle ground between the ISE and the DCI-compliant projection. One movie, three different environments, and three different experiences.

Why is this relevant in mid-2020? As of the time of this writing in late July, movie theaters are still squarely in the middle of the chaos that the COVID-19 pandemic (and governmental responses to it) has wrought on the time-honored summer blockbuster movie season. Some theaters have reopened, but without new blockbuster movies to show, they've been reduced to offering movies from years past. In my area, two of the four multiplexes—one a national chain and the other a second-run "dollar" theater—have permanently closed. One multi­plex that reopened with classic movies from the 1970s and 1980s has closed again.

It makes sense. While there are a number of fans who might want to watch all of the Harry Potter or Lord of the Rings movies in sequence over the course of a few days, there probably aren't enough to sustain a multiplex in the smaller towns that have relaxed movie attendance rules. In essence, these multiplexes—starved for new content, since the major studios have pushed summer 2020 blockbusters to the holiday season or 2021—are competing with the home theater experience. In addition, the multiplex is hampered by the requirement that patrons wear masks and social distance, which is, of course, unnecessary in the living-room home theater.

All of these things put recent news about theatrical-window discussions into perspective. Multiplexes are in a perilous negotiating stance when it comes to the traditional 3-month theatrical window for movies before they are released to streaming services as premium video on demand (PVOD). Multiplexes are be­holden to the movie studios to provide content, and with AMC and Regal, the two largest U.S.-based movie theater chains, shifting a few years ago to rotating movies through a typical 3-week period, the need for fresh content is even more acute. Since most first-run theatrical release movies now show a significant drop in revenues by the second weekend, versus a decade ago when a movie could play for 4–6 weeks and generate revenue each week, the need for new content has created a perfect storm for multiplexes.

As I previously mentioned, new content slated for summer 2020 is being withheld until late this year or early 2021. But even if the multiplexes had fresh content every 2 weeks, it's uncertain they'd get audiences that are big enough to cover expenses. 

Studios, however, have significant investments in movies that are already "in the can." They need to recoup funds for investors, but are hesitant to release movies in theaters that would generate lower-than-blockbuster viewership and revenue. Two of the main reasons for this are a fear that the movie would be considered a flop, invoking investment clauses, or would further affirm the "new normal" trend toward downward revenues that would, in turn, scare off future investments in movies that typically take more than $100 million to produce. 

In the middle of the whole discussion is the elephant in the room about whether or not multiplexes are even needed. The release of NBCUniversal's Trolls World Tour direct to transactional video on demand (TVOD) was a win for the storied studio, at least for a film it knew wouldn't be in Academy Award contention and therefore didn't need a theatrical-first release.

NBCUniversal's release of Trolls World Tour to TVOD generated immediate backlash from AMC and Regal, with AMC saying it would no longer play NBCUniversal movies in its theaters and Regal stating it wouldn't screen any movie that didn't honor the theatrical window. While there's been a concession on AMC's part in which NBCUniversal now gets a 17-day theatrical window before the TVOD period, other theater chains have doubled down, stating that they won't play movies from studios that opt for the direct-to-TVOD approach. This explains why the battle between studios and theaters over the release of some content directly to video on demand (often as PVOD) is so critical to the viability of the optimal viewing experience that a movie theater presents.

The reality of the pandemic—especially if it stretches out into mid-2021—is that home theater may be the only one of the three screen types to survive, at the expense of both the multiplex and ISE. After all, if movie theater attendance has dropped, airline travel has contracted even more. But the theater is still the best place to experience movies in their intended presentation format. Size matters, as do aspect ratio and speaker placement, when it comes to true cinema-quality viewing.

When it comes to the length of the theatrical window, the studios will gain concessions from movie theater chains over the next few months, but they'll still likely keep the first release of blockbusters in the multiplex. Why? Because the short window of time in which a freshly released movie is presented in its optimal viewing experience is one of the few ways that studios can rake in serious bank. Until TVOD proves that it can consistently do the same, studios won't likely kill off a sure thing.

 [Editor's Note: This column first appeared in the September 2020 issue of Streaming Media as "Inches and Aspects."]

Streaming Covers
Free
for qualified subscribers
Subscribe Now Current Issue Past Issues
Related Articles

Netflix's Movie Library Is Kind of Terrible, But Does It Matter?

Today, Netflix got its first Oscar nomination for Best Picture. That doesn't change the fact that its movie library is shrinking—and often bad.