The Pandemic Could Kill Mid-Budget Films at the Box Office For Good
There’s a lot going on in the world right now, so you might’ve forgotten there’s a deadly pandemic still in our midst. The coronavirus hasn’t gone anywhere, and Hollywood is still trying to figure out how to swim in these uncharted waters. Even before the coronavirus, the mid-budget movie – that is, a standalone film that wasn’t meant to be a big, franchise-launching blockbuster – was a dying breed. Now, in the wake of the pandemic, the mid-budget movie might be gone for good – at least theatrically.
Variety spoke with some industry insiders about the fate of non-blockbuster movies here in the age of the coronavirus. The virus has shut down movie theaters across the globe, and while many are holding out hope that things can start opening up again in July, nothing is guaranteed. As a result of the shutdown, studios have had to figure out what to do with their 2020 releases. Many big franchise movies, like Black Widow and Wonder Woman 1984, have been shuffled to later this year, while other blockbusters, like F9 and Ghostbusters: Afterlife, have moved to 2021.
Indeed, the 2021 movie release landscape is going to be littered with films that were originally supposed to arrive this year. This is going to create a whole new set of problems for studios – oversaturation. With a glut of films clogging up the box office in 2021, studios are going to have more competition than they’d prefer. As a result, some studios – like Universal, Sony, Paramount, and Disney – have embraced streaming.
Universal’s Trolls: World Tour was the first film to bypass theaters and go straight to streaming – a move that angered theater owners. But other films have followed suit. Disney moved Artemis Fowl to their streaming service Disney+; Paramount sold the rom-com The Lovebirds to Netflix; Sony is releasing their Tom Hanks World War II movie Greyhound via Apple; and Universal has moved The King of Staten Island to VOD for next week.
While there’s been much talk about salvaging the sanctity of the theatrical experience, pushing smaller films to streaming is not without its benefits. As Variety reports: “There are advantages associated with this blueprint. Selling a film to a streamer gives studios an immediate cash infusion, whereas renting the film takes longer to recoup costs — the money comes in incrementally with every rental.”
With theatrical releases, the studios have to split the profits with theater owners. Digital VOD titles, however, give studios 80% of revenues. That’s not to say every movie is bound to bypass theaters – just the films that producers don’t have full confidence in. Take The Lovebirds, for instance. Variety writes:
Paramount executives believed that as a midrange project, the film had limited commercial prospects. In contrast, Netflix liked that the movie had well-known stars. Since the streaming company makes money on subscriptions, it didn’t have to worry about box office sales. It’s not clear how much Netflix paid for the film, but insiders say that Paramount was able to recoup its $16 million budget as well as most of the money it had spent on advertising.
The Lovebirds is the very definition of a mid-budget movie. It’s not meant to be a franchise launcher; it doesn’t have huge stars; it’s not a superhero pic. It’s just a harmless (and kind of forgettable) rom-com. If Paramount, and other studios, can make a bigger profit selling these types of movies off to streamers, that’s exactly what they’re going to do. “They had low expectations for most of these films,” said Eric Handler, an analyst at MKM Partners. “Selling them gave studios a chance to recover their budgets sooner rather than later.”
And Peter Csathy, founder of Creatv Media, adds: “These changes were happening, but the pandemic accelerated them. These smaller films will be squeezed out of theaters, and all we’ll be left with will be event films and Marvel movies.” That may not bother you if you’re fine getting your mid-range movies at home. But if you’re nostalgic for the days of watching such movies on the big screen, you might be about to face a harsh reality.
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