Here's why U.S. movie theaters will probably have to close again. Theaters all around the world shut down earlier this year when the coronavirus pandemic took a turn for the worse, in an effort to help slow the spread of COVID-19. As a result, the industry was hit particularly hard in 2020. It's been estimated theaters will lose $31 billion this year due to the lockdown, putting them in a difficult spot moving forward. From that perspective, it's easy to see why exhibitors were eager to reopen their doors and try to drum up business. Over the summer, many venues screened classic movies while waiting for new releases.
Theaters have reopened globally (though they remain closed in other areas) with new health and safety protocols in place. This means attendance capacity is limited and there are fewer daily screenings to allow more time to clean auditoriums between showings. Combine that with people feeling unsafe going to the theater amidst a pandemic, the box office numbers are a far cry from what cinephiles are accustomed to seeing.
Health experts are advising to stay away from theaters for the foreseeable future, and Dr. Anthony Facui cautioned it'll be a year after a vaccine is available before they're truly safe again. And with all the lukewarm box office openings (particularly domestically), movie release dates are still being delayed. Wonder Woman 1984 got pushed back to Christmas, and there's talk of Black Widow possibly moving again. It all paints a bleak picture for movie theaters.
Movie Theaters Reopened for Tenet, Which Bombed
As movie studios cleared out their movies in April, May, and June, Warner Bros. kept Tenet in its originally scheduled mid-July window. Director Christopher Nolan's latest was eventually delayed twice, but the narrative all throughout the pandemic was that it was poised to be the title that helped save theaters by giving them a much-needed boost. For years, Nolan has been one of the most bankable directors, with a string of well-received commercial hits under his belt. He's one of the few filmmakers who can sell audiences on an original concept with his name, so the belief was Tenet would be a success - even with all the new health protocols in place.
Tenet's proven to be a solid draw overseas, with a global total of over $200 million. Unfortunately, it didn't make much of a splash in the U.S. Even though it scored the biggest opening weekend since theaters reopened, Tenet's actual numbers aren't great. To date, the movie's brought in $29.5 million domestically in two weeks, merely a fraction of what it would have made had it premiered under normal circumstances. While it may not be fair to call Tenet a box office bomb in the traditional sense (these are unprecedented times), the sad reality is WB is most likely going to lose money on a $200 million investment. Tenet needs to gross $500 million just to break even, a figure it is unlikely to hit. Its performance so far illustrates the risks of releasing a movie in theaters, and studios have taken notice.
Tenet's Failure Led To Other Releases Being Delayed
With hard data available, the fall 2020 release calendar quickly became barren. Universal moved Candyman to 2021, and WB pushed Wonder Woman 1984 to Christmas 2020. WB claims Tenet had nothing to do with the Wonder Woman 1984 delay, but it's easy to draw a correlation between the two developments. With Tenet struggling to draw audiences, it doesn't make sense to release another massive tentpole only in theaters so soon. Venues in New York and Los Angeles (the country's two biggest markets) remain closed indefinitely and theaters that are open aren't doing much business. Studios can't afford to take losses on multiple tentpoles at once.
The domino effect could extend into November, with it becoming increasingly likely Black Widow is going to be delayed again. Disney is also reportedly considering moving Soul to Disney+, potentially bypassing theaters completely. That would leave theaters with no new wide releases until No Time to Die in late November, and there's a good possibility that movie moves back as well. Even if the international box office is in robust shape, the domestic box office is still very important for studios. The U.S. is still the world's largest film market, obviously making it a key region (WB even demanded a greater percentage of Tenet ticket sales). Where the release calendar goes from here likely depends on how the pandemic progresses in the U.S. over the next couple of months. There are concerns the fall/winter could see another spike in new cases.
Without Major Releases, Theaters Can't Afford to Stay Open
If there's nothing new in October and November, theaters are going to find themselves in the same place they were in April and May, which means it would be impossible for them to stay open. When theaters are open, the owners have to pay full rent on the property, plus operating expenses (including staff salary). If there aren't major new releases drawing audiences in, it obviously becomes difficult to cover those costs. The theaters don't just need new movies to come out, they're dependent on viewers coming out in droves to see them. There's a reason why movies that bomb in their opening weekend normally don't stay in theaters for very long.
As it stands right now, the theaters are operating at a loss. Auditoriums are open at only 30 percent capacity (or less) and this isn't a sustainable business model longterm. The unfortunate reality of this difficult situation is theaters would be better off closed than trying to make whatever money they can and end up in the red. Over the next month, all theaters will have are Tenet and whatever smaller titles opt to play on the big screen (like The Broken Hearts Gallery). That is a stark contrast from the typical movie release schedule, which sees a new would-be blockbuster come out on a regular basis to keep business steady. Even if it's only a short-term closure until the holiday season, finances would be more manageable for theaters. A wrinkle to consider here is WB wanting to keep Tenet playing as long as possible to boost their own bottom line, but theaters may have to make a decision sooner or later.