NORDIJA INSIGHTS · MAY 2021
Cinemas are fighting. Will they win against covid-19 and streaming services?
Thanks to the global pandemic COVID-19, we have involuntarily found ourselves in temporary quarantine from spring 2020, we have experienced closed borders, and we are gradually getting used to the new ’new normal’ in all the areas of our lives. One year later, many of the changes we see as a new standard, but we all look for a fast ’fast-forward’ mode into a corona-free life.
Among the industries that have been hit the hardest by the lockdown are film and cinema. They were on the exponential rise in the last couple of years. Both due to the successful movies produced by Walt Disney, Paramount Pictures, or Universal pictures but also by irreplaceable cinema experience which is still worth the effort: The big screen, People everywhere, Focus, Relentlessness, A massive speaker system, Previews, Disruption, 0,5l of Coca-cola in the dark, crunchy popcorn, etc.
The reason for the dramatic drop in the traffic is obvious. In addition to a previously mentioned pandemic, an important element that contributes to the negative results is the last of the premieres that are being postponed indefinitely - James Bond, Avatar 2, West Side Story, The Batman, Jurassic World, Star Wars, The Matrix 4 and many more. And not only postponed the premiere in the cinema but many times they moved directly to VOD, such as Disney+ or Hulu.
Source: European Audiovisual Observatory
A typical picture of the corona crisis is empty cinemas. While the European cinemas celebrated record success in 2019, they were hit by a disaster last year. As compared by the International Union of Cinemas (UNIC), revenues in Europe have fallen by more than 70%.
On the other hand, we see the ever-accelerating rate of change from the traditional-Flow TV towards new global services like Netflix, Disney+ or AppleTV+, which we call cord-cutting. The pandemic has caused a historic growth at companies like Netflix and Walt Disney's streaming services. As people turned to digital options available at home and on mobile devices, the streaming subscriptions rose 26% from the previous year. ‘’Streaming has taught people to enjoy the cinema in the comfort of their own homes, a habit they can follow later as life begins to return to normal,'’ also these concerns were expressed recently by Disney CEO Bob Chapek.
According to the latest reopening plans in Denmark, cinemas will re-open within a week from now on, but are the cinema-goers ready to go back? Are cinemas prepared to open despite the increased hygiene and safety measures? Will the cinema tickets be more expensive and shortened movie showtimes?
We can't be sure what role cinemas will play after the pandemic. There is definitely going to be a boom… but who knows how long that boom is going to last?