After theaters and box offices around the United States were forced to close as a result of the Covid-19 Pandemic, optimistic investors, theater-owners, and movie-goers alike anticipated the recovery of the box office as the nation heals.
The domestic box office, consisting of the United States and Canada, reported a mere $2.2 billion in revenue in 2020 — a sharp 80 percent decline from the $11.4 billion it reported in 2019. As vaccine rollouts and the number of fully vaccinated adults increases, theaters are optimistic that people will once again return to see their favorite movies and plays on the big screen.
Despite the optimism, however, the box office is unlikely to exceed expectations in 2021 simply because of the uncertainty surrounding the United States’ recovery from the Covid-19 Pandemic. While it is certain that the nation is making significant gains in the fight against Covid-19, it is unclear exactly when those gains will come to fruition.
The biggest reason for concern about the domestic box office’s recovery is a report from the World Health Organization (WHO) that the world is unlikely to achieve herd immunity from Covid-19 in 2021. The WHO report means that theaters and production companies will need to continue to meet rigorous operating standards if to have the opportunity to reopen their doors.
The rigorous standards that production companies must meet means that there are likely to be few new large-scale, blockbuster movies to attract people to the small number of theaters reopening this year. Further, the consumer shift to at-home streaming services will act as another potential nail in the coffin for the struggling move industry.
Netflix, in particular, will act as the most significant competition to movie theater companies like AMC, Regal, and Cinemark. Netflix announced earlier this year that they would be releasing a new movie every week — far more than any typical production company in Hollywood can manage while meeting Covid-19 restrictions.
As companies are forced to deal with Covid-19 restrictions, they are considering ways around the limits that would still allow them to turn a profit. The biggest question for many production companies is whether they should follow suit with Warner Bros., who last year decided to release movies on streaming services at the same time they make their way to theaters.
By releasing movies to streaming services at the same time as theaters, production companies can avoid further delaying blockbuster movies and continue to make profits. Companies are cautious, though, because they are unlikely to make as much money as they could in a typical movie release.
As Hollywood companies and executives come to terms with the recovery from the Covid-19 Pandemic, they are hopeful that increasing vaccine rollouts will help the struggling industry return to normal. While there is still uncertainty regarding the end of the pandemic, theaters have already begun to reopen their doors — meaning that there is still a chance for production companies to release blockbuster movies before the end of the year.