Lead Forensics

Cinema: can we expect a full recovery?

by Mitchell Cocker

03 March 2021


As the pandemic began, all over the world countries retreated into lockdown – forcing consumers and audiences to spend more and more time at home.

Naturally this resulted in a significant uplift in the consumption of most at-home media: record TV viewing figures; SVOD services smashing their projected subscription numbers; and big increases in the consumption of audio streaming services.

Blockbuster launches shelved

However, cinema saw a huge decline of 80% in 2020 due to the impact of COVID, both domestically and globally. Many films completely cancelled their release dates and are now either looking to reschedule for 2021, or have moved to a paid VOD or SVOD service. Trolls & The Witches had their at-home premiere on pay-per-view platforms; Hamilton, Mulan & Soul were released exclusively on Disney+; Amazon secured the rights to Coming 2 America and the new Borat release; and Netflix premiered the Trial of the Chicago 7, which received a minimal release in cinemas.

The biggest film at the box office in 2020 was Bad Boys for Life, something no one would have predicted with big hitters like No Time to Die, Tenet and Black Widow (Marvel) all due for release across the year.

We’ve seen a small number of blockbusters hit the silver screen this past year, including Tenet and Wonder Woman 1984. Tenet delivered a strong performance domestically under the circumstances but under-performed globally. This made studios nervous about ploughing ahead with cinema-only releases (the film grossed $362 Million, not enough to break even).

Wonder Woman 1984 was released in the UK in December, with a very underwhelming performance delivering sub £900k in its opening weekend (an important caveat here is that only 1 in 4 cinemas in the UK are currently open). Compare that to the first instalment – which grossed £7M in the UK – and you can see the huge drop off. WW84 was released on pay-to-view VOD platforms from mid-January in the UK.

Will 2021 spark a recovery?

So, what next for cinema and advertisers? With the latest announcements pointing towards the reopening of screens on the 17th May, we’re expecting a strong rebound with the release of Pixar’s Luca, Marvel’s Black Widow and Fast & Furious 9.

We forecast cinema to be up 160% in 2021 vs 2020, as film studios seek to monetise their backlogs with a surge of highly anticipated launches. While this rebound may seem optimistic, we note that it only brings cinema back to 52% of pre-pandemic advertising spend, which is a reasonable assumption given the expectation of a widely distributed vaccine by mid-2021.

The biggest challenge to cinema however isn’t COVID – it’s the movie studios themselves. They’ve learned how to adapt to changing consumption habits and have had varying success with at-home releases.

Warner Brothers have already announced their intention to release all 2021 releases simultaneously on HBO Max & in cinemas, with Disney also announcing a slate of content to be exclusively released on Disney+. While both efforts may be short-term plans to help bolster their new streaming platforms, the industry will be watching their performance closely.

If this shift to direct-to-consumer platforms continues, it will have a huge impact on the cinema market. Only time will tell how much damage this will cause; the question is, have audiences learnt to live without movie theatres?

In our view, the innate joy of an evening out at the cinema will ensure its recovery. Whether its popularity can return to pre-pandemic levels, however, is something that will become clear in the coming months.

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