Hollywood tests new ways of releasing movies amid COVID-19

Aug. 27, 2020 7 AM PT

Since the advent of the blockbuster, Hollywood followed a rigid rule book for how to release movies to the public — put the film in as many theaters as possible, and give theaters full exclusivity before people can see it at home. But amid the COVID-19 pandemic, the old practices have given way to a free-for-all of experimentation.

No one knows that better than Bob Berney, the indie film veteran who runs Los Angeles-based production and distribution firm Picturehouse. He’d planned to give the faith-based drama “Fatima” a theatrical release buoyed by support from churches, but with the pandemic still raging, the company switched gears. Instead, Picturehouse is putting the movie out as a $20 video-on-demand release Friday, the same day it will be on about 215 cinema screens.

“The film has an older audience,” Berney said. “If they can’t go to church, it’s difficult for church leaders to recommend they go to a movie.”

In the coming weeks, studios will release multiple delayed films, even though eight of the top 20 theatrical markets in the U.S. — including Los Angeles and New York — remain closed for indoor theaters.

Walt Disney Co. stuck with a relatively traditional plan for 20th Century’s “The New Mutants” and Searchlight’s “The Personal History of David Copperfield” this weekend. However, the studio pulled “Mulan” from the theatrical release schedule and opted to put it on Disney+ as a $30 purchase.

Warner Bros.’ Christopher Nolan movie “Tenet” is hitting international cinemas before it arrives in the U.S. Sept. 3. Meanwhile, Universal is overhauling the traditional business with a deal with AMC Theatres that allows it to shrink the theatrical window to just 17 days.

Each experiment reflects the diverging priorities of the various studios and filmmakers. Some analysts expect the business to eventually return to its normal playbook once there’s a widely available vaccine and patrons’ comfort levels increase. It remains to be seen if any of the new methods will be bring permanent changes.

“I do think that the pandemic has unleashed all options,” Berney said. “It’s become a testing zone of every possible way of getting a film out there, and it’s going to take while before it gets set into some sort of pattern.”

‘Tenet’ to the rescue?

The $200-million “Tenet” has begun its long-awaited rollout — just not in the U.S. The film on Wednesday debuted in countries including Belgium, Denmark, Egypt, France and Britain, and will play in about 50 countries before its U.S. launch during Labor Day weekend.

It’s unusual, though not unheard of, for movies to go international before their domestic release. Still, to go forth when six states remain shuttered is risky, reflecting Nolan’s unflinching support of theaters.

“Tenet,” a time-bending thriller has symbolic importance. Tom Cruise on Tuesday showed his enthusiasm with a video on social media, in which he attended a public screening of “Tenet” in London while wearing a face mask.

How the film performs will send box office observers into overdrive to parse the figures. Warner Bros. decided to hold off reporting box office grosses for international territories until Sunday morning, according to several people familiar with the matter who were not authorized to comment.

Normally, studios release their figures day by day. The studio plans to do the same for domestic grosses, the sources said. The movie won’t be released in drive-ins in markets where indoor theaters can’t open (sorry, Los Angeles).

Warner Bros. declined to comment.

Mooky Greidinger, CEO of British exhibitor and Regal Cinemas parent Cineworld, said that going international first is a smart tactic for “Tenet.” “The international market is a huge market,” he said. “I don’t think the moviegoers in the U.S. care if the movie opens internationally a week before the U.S.”

The lack of competition should help. Distributors are looking at the recent release of Russell Crowe’s “Unhinged,” which generated $4 million in its first weekend, as a positive sign of pent-up demand.

I do think that the pandemic has unleashed all options. It’s been so set in stone for so long, and now there’s going to be no rules.

— Bob Berney, founder of Picturehouse

“This idea that all of a sudden no one will go to movies, and theaters are dead, is laughably silly,” said Mark Gill, CEO of Solstice Studios, which released “Unhinged.” “The two dirtiest words in the dictionary right now are ‘my couch.’”

“Tenet’s” opening weekend won’t be nearly as big as that of a blockbuster release in normal times, so the studio and theaters are hoping the movie plays for significantly longer than usual.

“While there are risks ... a release of this type continues to signal their commitment to the theatrical marketplace while also benefiting from being one of the few big new releases this summer,” said marketing and distribution executive Paul Davidson.

‘Mulan’ breaks the window

Multiple studios made their movies available for premium video on-demand while theaters were dormant, including Universal Pictures with “Trolls World Tour” and Warner Bros. with “Scoob.” Still, the release of Disney’s live-action version of “Mulan” is unique.

The $30 price point is higher than the typical premium video-on-demand offering, which is about $20. Additionally, it’s only available to Disney+ subscribers, who already pay $7 a month. “Mulan” will be available to buyers for as long as they are Disney+ subscribers, whereas other premium videos-on demand (PVOD) are limited to viewing during a 48-hour rental period.

Analysts are eagerly waiting to see how many families take Disney up on the offer. That will allow Disney to recoup some of the costs on its $200 million movie while driving subscribers to Disney+, which is a top priority. The service now has 60 million subscribers.

Chief Executive Bob Chapek, on an August earnings call with analysts, described the “Mulan” plan as a one-off.

“[W]e find it very interesting to be able to take a new offering ... to consumers at that $29.99 price and learn from it and see what happens,” Chapek said.

“Mulan’s” move to streaming is a blow to theaters that were hoping for a one-two punch from “Tenet” and the long-awaited Disney remake.

However, Cineworld’s Greidinger said there’s little chance of big-brand movies such as “Black Widow” or Warner Bros.’s “Wonder Woman 1984” bypassing cinemas.

“Under the circumstances, we need to remember that Disney is one of the studios that is a big ally of the theatrical experience,” Greidinger said.

“Mulan” will only be released in theaters in countries where there are no current plans to launch Disney+, Chapek said. That means the movie will be released theatrically in China, which is the world’s second-largest box office market.

Disney has already shown its willingness to experiment by showing its filmed version of “Hamilton” on Disney+ more than a year before it was expected to premiere in theaters.

Disney+ releases could be lucrative for the company, allowing it to keep all revenue from selling “Mulan” online. Studios selling through other platforms such as iTunes and Amazon give up 20% of sales to the online retailers.

“Disney is big enough and smart enough to be able to experiment,” said Michael Pachter, an analyst with Wedbush Securities. “They’re not wedded to any of these solutions.”

AMC and Universal push a new model

The move that triggered the most consternation was the deal between Universal Pictures and AMC Theatres, the world’s largest cinema operator, to dramatically shorten the theatrical window.

The companies in late July announced an agreement that would allow the studio to put its movies on digital outlets after their first three weekends in theaters, a far cry from the typical 74-day gap between a movie’s cinematic debut and its availability for electronic purchase.

Universal has to sell the PVOD titles for at least $19.99, and they will only be available as two-day rentals. Also, no one expects giant franchises pictures such as “F9” and “Jurassic World: Dominion” to truncate their multiplex runs.

However, a movie like Universal’s next scheduled release, a Jordan Peele-produced reboot of horror flick “Candyman,” could be an ideal candidate for what AMC CEO Adam Aron called an “industry-changing” agreement.

Theaters have long resisted premium video on-demand, fearing that it would undercut their business model. Some rivals saw AMC’s move as a desperate act by a heavily leveraged chain. Both AMC and Universal have argued the deal is forward-thinking and will keep the business healthy.

“We are incentivized to make theatrical box office as big as possible,” said Jim Orr, president of domestic distribution for Universal. “We are very much leaning into the success of the theatrical model.”

Under the deal, AMC will receive a share of the revenue from digital sales. “We think we made an attractive deal for AMC shareholders, and we know it’s an attractive deal for Universal,” Aron told analysts recently.

Aron said he expects the model to become an “industry standard,” but it’s not clear how many other studios or exhibitors will follow AMC and Universal’s lead.

Some theater chains, like Landmark and Alamo Drafthouse, which have already been amenable to showing streaming movies on the big screen, may want to participate. But Cineworld’s Greidinger has already voiced opposition.

“It is clearly the wrong move at the wrong time,” he said. “It is not something that makes any sense from an economic point of view, and I think the future will prove it.”

Davidson, however, said studios will continue to experiment.

“We’re entering a phase where the already-complicated window of film releases is going to get even more complicated for the consumer to understand,” Davidson said. “I think you’re going to see a pretty confusing cross-section of release patterns, exhibitor deals and outside-the-box thinking.”