Why the future of movie theaters is looking uncertain again

Venom 2 let there be carnage
‘Venom: Let There Be Carnage.’ Sony
  • Some Hollywood studios have once again started delaying their movies or selling them to streamers.
  • It’s a sign that theaters could face more complications as concerns over the coronavirus intensify.
  • Here is Insider’s guide to how Hollywood and movie theaters got to this point, and what the future looks like.
  • See more stories on Insider’s business page.

While the North American box office has yet to rebound, there have been some signs of recovery after a calamitous 2020.

“Free Guy,” the Ryan Reynolds action-comedy, earned $28 million at the domestic box office during its August opening weekend, beating expectations, and “A Quiet Place Part II” has had strong legs at the box office since it debuted in May.

But as the Delta variant causes coronavirus cases to rise and the vaccination rate slows across the US, movie theaters could soon face challenges similar to last year, when studios delayed tentpole movies or found streaming alternatives to theaters.

Paramount has already removed its “Clifford” movie, which was slated for October, from the release calendar, and Sony delayed its “Venom” sequel by three weeks to October 15. The latter studio, without its own streaming platform, also sold the latest entry in its “Hotel Transylvania” animated film series to Amazon, skipping theaters altogether. More big changes could follow.

Read more about why Hollywood studios should delay their big-budget movies.

One major problem facing tentpoles released in the current theatrical environment is that they’re seeing big drop offs in revenue after their first weekends.

That was normal in the pre-pandemic market when movies like “Black Widow” and “F9” would have opened with significantly larger numbers at the box office. But it’s not exactly sustainable now, given that films are already at a disadvantage with a number of North American theaters still closed, pandemic-related restrictions in place, and many consumers uncomfortable returning to theaters.

Movies like “Black Widow,” “F9,” and “Godzilla vs. Kong” managed to cross the $100 million mark at the domestic box office, but these films each cost around $200 million to make. While the international box office has given them a boost – particularly in the case of “F9,” which has earned $680 million globally – prior Marvel and “Fast and Furious” movies grossed more than $1 billion worldwide.

Read more about why strong openings alone couldn’t save the box office.

Another hurdle theaters faced this year was the lack of exclusive animated movies, as many of these family films got simultaneous, or exclusive, streaming releases. It looked like that could improve as the year progressed, but now the aforementioned “Clifford” and “Hotel Transylvania” films have been removed from the equation.

Though “Space Jam: A New Legacy” performed well, the box office could have used a boost from the Pixar movie “Luca,” which went straight to Disney+ this summer. Other animated movies like “The Boss Baby: Family Business” and “Paw Patrol” got day-and-date releases on streaming platforms Peacock and Paramount+, respectively.

Read more about how a lack of exclusive theatrical animated movies hurt the box office.

The shifting relationship with talent amid streaming strategies has also impacted Hollywood, with theaters at the center of debates surrounding talent compensation.

For example, Christopher Nolan, a champion of theaters, has had conversations with Netflix, which wants to poach the filmmaker from Warner Bros. for his next movie. Nolan was heavily critical of WarnerMedia’s decision to release its 2021 movies to theaters and HBO max simultaneously. His next move will be an important indicator for the future of cinemas as big tech and streaming shake up Hollywood.

Read more about where Nolan could take his next movie.

The coming weeks will be a barometer of the more immediate future of movie theaters. If studios continue to delay films or sell them to streamers, it could be cause for concern – and a sign that the exhibition industry will continue to change at a breakneck pace.

Here’s a list of our recent coverage on the state of movie theaters as the industry looks to recover from the pandemic:

The big-picture take

Major obstacles theaters and Hollywood have faced

Evolving Hollywood strategies

Tense talent relationships

But it hasn’t been all bad