After falling from $11.4 billion in 2019 to $2.2 billion in 2020, the U.S./Canada theatrical market has been slowly recovering but remains well below pre-pandemic levels. While box office numbers cannot be entirely relied on to determine the well-being of theaters, they can offer a broad snapshot of general trends. Right now, those trends remain negative. Every year that the pandemic keeps movie-goers at home poses a risk for film exhibitors.

 

“There's plenty of reason for legit concern,” said Todd Hitchcock, director of programming and associate director at AFI Silver Theatre and Cultural Center in Silver Spring, Maryland. “The longer that we go through this bad stretch, the more it removes everybody from what the normal movie-going habits were.”

 

The concern is that movie-going habits could change permanently, with more people choosing to catch the newest flick from home. In the long run, films given a traditional theatrical release generally garner the most profit for studios. But the uncertainty of the pandemic forced studios to forge new distribution methods that less heavily relied on or entirely circumvented theaters.

 

“But 2020 was hard to know what the long run even looked like, so decisions had to be made,” Hitchcock said. “Studios took some things off the schedule and held them, they shifted some things to direct video. They also sold some titles from one studio to another, or from one studio to a streamer.”

 

Shaun Barber, Lionsgate’s executive vice president of theatrical distribution, said that while Lionsgate tries to prioritize theatrical distribution, the pandemic has forced the company to employ a variety of different distribution strategies.

 

“When we are green-lighting films, we are green-lighting them to be theatrical motion pictures first and foremost,” Barber said. “In the time and day and age of COVID, we start to always have an eye on optionality for those movies.”

 

This includes releasing more films directly to streaming or decreasing the theatrical window—how long a theater can exclusively show a film before it goes to Video on Demand and Subscription Video on Demand platforms. Barber says that the Lionsgate theatrical window used to be about 74 days before a film could move from theaters to SVOD but, these days, that window has been cut to about 45 days and is expected to remain in that range. In some cases, studios have started releasing films day-and-date, meaning they simultaneously enter movie theaters and streaming services.

 

“There were a lot of really big movies that were coming out and they were also streaming at the same time and that does cut into the box office, for sure,” Gerber said. “Because we've just come out of a period where people did nothing but watch streaming services, they probably subscribed to a ton of them, invested money in their televisions and sound and everything.”

 

AFI’s Hitchcock said that a film being day-and-date is a factor the Silver Theater considers when making its schedule, but it is not necessarily “a killer” to the box office.

 

And while it seems that the pandemic spurred these changes, COVID-19 may not be entirely to blame. This increased focus on the steaming market was heavily considered and debated well before the pandemic.

 

“If the pandemic hadn't happened, probably we would have maybe gotten an extra five years where nobody made drastic changes to the windows,” Gerber said. “But the pandemic accelerated all of that because we couldn't hold films and wait for people to come back to the theater. Studios wanted the most people to see them, so they streamed them.” 

 

Even in the midst of the pandemic, certain films are always reliable performers in the theatrical market. Hitchcock says that films with branded Intellectual Property—IP associated with an established brand—tend to perform well. “Spiderman: No Way Home” grossed about $800 million in the domestic box office and about $1 billion worldwide, according to Box Office Mojo.