National Association of Theater Owners CCO Patrick Corcoran says movie theaters aren't worried about streaming competition in the aftermath of the coronavirus. The COVID-19 outbreak has had an unprecedented impact on the entertainment industry, to put it mildly. Over the last two weeks alone, everything from theaters to professional sports games, annual film festivals, and comic book conventions have closed down in order to prevent the further spread of the virus. In addition, the movie release calendar has been virtually wiped clean on through to the second half of May, with several films being indefinitely delayed along the way.
Because of this, the U.S. box office recorded zero revenue for the first time in history this past weekend and NATO has been working to secure funding from Congress to help theaters and their employees get by financially until they can reopen for business (however far away that might be). Meanwhile, studios have been dropping their current releases on-demand and on digital early for those self-quarantining to watch at home, leading many to wonder how this will impact the theater industry moving forward. However, according to Corcoran, streaming really isn't a concern for theater owners right now.
In an interview with Screen Rant, Corcoran said the longterm implications of streaming is "not really" a concern for NATO, explaining "The long term business model still makes sense. People still need to get out of the house. The experience is different." He went on to point out how difficult it is for studios to make the kind of money releasing films - and not just tentpoles that gross billions of dollars worldwide - straight to streaming as they would releasing them in theaters first. Further, Corcoran argued theaters are covered in people's budgets for "outside" spending, whereas streaming is covered in their "inside" spending. Here's his own explanation for what that means:
"... [People] budget for what they're going to pay in the home. Any other expense in there is not measured against what we're paying outside; it's measured against what you're paying inside. And you have the budget for what you're going to do for entertainment out of the house. That's what we're competing against. We're competing against concerts and bowling and everything else you can do outside of the house. We're not competing against the home experience."
He went on to cite a Barclays study suggesting streaming services and movie theaters could form a financial ecosystem, so to speak, where Netflix Originals "would benefit from having full theatrical releases, because it creates that aura for a title, people are more likely to watch it once it's on the service, and they feel a greater sense of satisfaction." Corcoran also claimed "people who stream a lot go to the movies a lot," which has similarly been supported by past studies indicating people who stream more also see films in the theater more often. Finally, when it comes to changes in theater attendance over the last fifteen years, he had this to say:
It's not that people aren't going to the movies. For $100 million-plus titles, more people are going to them than 15 years ago. But from that $50-$100 million range, because there are fewer of those movies, we're getting fewer admissions there. That's where the whole difference for us, between last year and 2004. It's entirely in that middle range. On streaming, there's so much content, and so much competition for viewers, and so much competition for filmmakers, many of whom want their work to be seen in a movie theater. We think there's going to be a reverse of the situation where you would make things for theaters and have a backstop in the home; we're going to see things that are made for the streaming services that go to movie theaters as a backstop first, to bring in revenue, to bring attention, branding, to keep filmmakers happy. And then it goes to the streaming service where it's differentiated from other content because it had a theatrical release.
These are all valid points, and it stands to reason streaming and movie theaters can continue to coexist once the coronavirus has been contained. At the same time, this doesn't mean the movie business will emerge from the pandemic unaffected. Blumhouse founder and producer Jason Blum is predicting the window between movies premiering in theaters and debuting on streaming will only continue to shrink after theaters are up and running again. Universal is even planning to release Trolls World Tour straight to VOD next month, and many are curious to see how that affects things in the future. But for now, this won't be the norm; NATO has already issued a statement assuring the majority of delayed films will still release in theaters once the crisis has lifted. And after being stuck at home for who knows how much longer due to the coronavirus, people will surely be excited to return to their local multiplex when it's safe again.