Folding the Tents in Tinsel Town

The major Hollywood studios have begun clearing the 2020 decks.

With little hope that theaters in the U.S. will be able to open in sizable numbers before next year, or that movie fans would return to them even if they could, the studios are folding their tent poles for this year and decamping for 2021 in the hope of salvaging respectable theatrical openings for their big budget franchise releases.

Mulan

Disney last week pulled Mulan from the 2020 calendar, just days after Warner Bros. announced an indefinite delay in the theatrical release of Tenet. The Mouse also pushed back the planned next installments in the Star Wars an Avatar franchises by a year.

Paramount has pushed back the release of Top Gun: Maverick, the sequel to the 1986 Tom Cruise blockbuster, to next July, after previously postponing A Quiet Place Part II. Also delayed are Sonic the Hedgehog 2, Jackass, Under the Boardwalk and The Tiger’s Apprentice.

Sony Pictures pushed back the release of the next live-action Spider-Man film to December 17, apparently hoping Christmas can yet be saved, but don’t be surprised if that web unravels as well.

While painful, the studios have little choice at this point. With hundreds of millions of dollars tied in production costs, to say nothing of merchandising tie-ins, theme park rides, spin-off plans and other franchise elements on the line, they can’t afford to let the main events fizzle. Whether they can turn fizzle into sizzle even a year from now, however, is an open question.

Theaters will eventually reopen. But their footprint will likely be reduced due to bankruptcies, real estate defaults and other exigencies, leaving fewer screens from which to conjure a blockbuster release.

Moviegoers, too, may be fewer in number after the trauma of pandemic and economic disruption, particularly with so much high-quality, high-profile content available for viewing at home via streaming services, some of it provided by the studios themselves.

In short, the studios could be facing a very different movie viewing and distribution landscape next year, which may never revert to its pre-Covid posture, and for which their core product strategy is singularly ill-suited.

For the past 15 years, the major studios have basically been in the franchise business, creating and acquiring IP that can be exploited across multiple domains. Periodic movie releases are the tent poles that keep the franchise aloft, while creating leverage with distributors, helping to attract capital, and providing fuel to keep the rest of the production machinery turning,

But for the strategy to succeed, each new movie must be made into an “event.” That means releasing it simultaneously around the world and on as many screens as possible on opening weekend to create the necessary downstream momentum.

Without sufficient screens or eager moviegoers, it may be much harder to create an event around a film’s opening than in the past, undermining the entire strategy.

Disney managed to create something of an event around the streaming release of Hamilton on Disney+, but the Lin-Manuel Miranda Broadway musical is not a property Disney can easily build a franchise around.

Nor is it clear whether Disney’s success with Hamilton can be consistently repeated, given the radically different consumer behavior around watching movies on demand at home vs. going to the theater for the 8:00 showing.

The studios themselves will also likely face conflicting priorities. As Disney, WarnerMedia and NBCUniversal pour millions into building out their direct-to-consumer strategies via streaming they face a strong incentive to put their most compelling programming on their own streaming platforms amid fierce competition for subscribers in the increasingly crowded OTT market.

If event movies don’t work on streaming platforms, maybe they need to shift production resources into something other than major event movies. Yet given how entrenched the franchise business is in Hollywood, that won’t be an easy pivot to make.