Coronavirus could be the best thing to happen to Hollywood

Could the unintended consequences of the coronavirus kill the movie theater industry? If Hollywood decides to shift its release strategy from theaters to streaming, it could spell the end for major theater chains.

Lots of industries have been affected by the worldwide pandemic of the coronavirus outbreak, but none as high profile as the entertainment industry. Whether it be celebrities like Tom Hanks or Idris Elba testing positive for the virus, or major studio productions getting shut down “indefinitely” due to worries of exposure, it has become clear that Hollywood is going to be deeply affected by this outbreak.

This also extends to the major theater chains, who’ve seen big Hollywood releases pushed back and have been forced to shut down to try to limit the social interaction necessary to spread the coronavirus. AMC theaters, the biggest movie theater chain in the United States, just announced that they will be closing their facilities for a full 90 days, putting every movie release from March to June in question.

For any industry, three months is a long time to go without revenue. But for Hollywood Studios, who outlay hundreds of millions of dollars for their films, the lack of theater distribution could be catastrophic.

Or… maybe not?

Strangely enough, the shutdown of theater chains due to the coronavirus outbreak might possibly be a blessing-in-disguise for the entertainment industry. Though Hollywood has long flirted with the idea of simultaneous home video and theatrical releases, this had always been met with resistance from the theater chains, to the point where big exhibitors would threaten not to carry a studio’s movies if they pursued the “same day home release” strategy.

But the landscape of film distribution has quickly shifted. Now, many Hollywood studios have their own direct-to-consumer streaming services.  In these cases, the studios not only control the content, but the method of distribution as well. Now that the traditional theatrical model is on hold for the next three months, the studios suddenly find themselves with lots of exclusive content that they might be able to use to attract subscribers to their streaming services.

This makes lots of sense from a business perspective. And let’s face it, with a quarantine in full effect in most of the world, there’s not much else to do other than watch TV. Which means that streaming services are poised to gain LOTS of new subscribers.

Already, Hollywood Studios are pushing content out to digital streaming that normally would still be in theaters. Warner Brothers announced it would be making their comic book film Birds of Prey available early, even while it’s still at the tail-end of its theatrical run. Universal Studios has announced it will be releasing a number of its pictures on digital home video early as well, including the sleeper hit The Invisible Man, which is still actually playing in theaters. Even Disney dropped Star Wars: The Rise Of Skywalker early to help meet the demand for home entertainment during this quarantine period.

With a three-month distribution gap looming for the industry, studios might decide to put their planned releases on home video instead of pushing back the theatrical releases as a way to entice people to sign up for their services. There’s already been rumors that the next big Marvel movie, Black Widow, might become a Disney+ exclusive due to its early April release date being canceled because of theater closures.

The unintended consequences of the coronavirus could have a major impact on the theater business. Already trying to compete with streaming by offering subscription plans for unlimited theater visits, the major theater chains are constantly trying to convince people to leave the comfort of their homes and come to the theaters. But this is getting harder to do as home video equipment becomes cheaper and more advanced, and prices of concessions and tickets continue to rise.

Now that the theater chains are in no position to demand the Hollywood Studios not premiere theatrical releases on home video, they are in danger of losing their advantage in the industry. If the studios can find a way to make more money doing direct-to-video home releases and avoid the expense and hassle of a theatrical release, you can be certain they are going to do it. And if that’s the case, then it could spell disaster for theater chains worldwide.

This isn’t the first time doomsday proclamations have been made regarding theaters, but it is the first time these proclamations may actually come true. The question now is: once people get a taste of exclusives coming to digital home video through streaming services, will the theaters be able to compete? This may cause theater chains to invest more heavily in newer technologies, such as 3D, IMAX, and Screen-X. It may also cause them to increase their services, such as better seating, better food, alcoholic beverages, in-theater dine-in service, and so forth.  

But one thing is for certain – if the theater industry doesn’t do something to compete, post-coronavirus, there’s a good chance that this is one disease they may never recover from.

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The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.