The Show Will Go On: A Rebuttal To “The Experience of a Movie”

Last week, my colleague wrote a piece explaining why they believed that movie theaters would be one of the now-countless victims of the COVID-19 pandemic. I disagree, and this article will both analyze my colleague’s argument and explain why I think movie theaters will persist.

            Let us begin by establishing the argument laid out in “The Experience of a Movie.” My colleague essentially argues that going to a movie theater was less about seeing a movie than the experience of going out to a movie theater and seeing a movie, citing their own experience streaming during the lockdown months. They further argue that companies such as Disney are likely to move to publishing movies directly to streaming services or DVD and, in the former case, doing so is more profitable. Their conclusion, then, is that movie theaters will not recover after being beaten down by the pandemic.

            Regarding their first point, I completely agree. Movies have been more about the experience than the movie itself for decades, arguably since VHS became commonplace. Ever since then, there has always been the option to wait until a movie came out for home release, usually a cheaper and more convenient option. Many argued at the time that the VHS would spell the death of the movie theater – and they were partially right. Movie theaters no longer held a monopoly on movie distribution but the theaters recognized that they had things to offer that could not be replicated at home. They still had the silver screen and the freshly-popped popcorn which microwaveable bags just cannot compare to. They leaned into this, developing things like IMAX and high-end theaters while expanding concessions menus to provide a unique experience. As such, given that movie theaters have survived for decades on the basis of the experience they offer, there is no reason to believe that they won’t continue to do so – assuming all other things are equal.

            As to their second point, I am afraid I must disagree. Their suggestion that releasing movies straight to streaming services is more profitable is just untrue. Let’s take Black Panther (R.I.P. Chadwick Boseman) as an example. On a formal budget of $200 million, the film made roughly $1.34 billion at the box office. Traditionally, theaters will get a cut of the box office revenue while the majority (usually 60 percent in domestic markets and 20 to 40 percent abroad) goes to the studios. This means that Disney made a net profit of about $400 million. It then went on to make roughly $100 million in home release sales. Let’s compare this to Mulan, which was recently released on Disney+. This is a bit more difficult, as the rental numbers have not been fully released. However, during the opening weekend, it grossed roughly $33.5 million according to Business Insider – though this only includes monitored households. Even taking into account the potential increase in Disney+ subscribers, this profit model fails to compare to the traditional model of initial theatrical release and subsequent home and streaming release. The latter could provide similar increases in subscriber counts as movies are released on streaming services after a theatrical run. This suggests that the direct release-to-streaming approach may work for low or mid-tier films, but theatrical release will remain the primary method for big blockbusters.

            Given all of this, I contend that, while the pandemic offers a temporary hurdle, theaters will eventually return as strong as ever, if not stronger. The show will go on!