The impact of COVID-19 on the global cinema business (as at 15/4/20)

US and international circuit Cinemark has laid off 17,500 hourly-rate employees since the closures due to COVID-19. Circuit also furloughed half of their HQ staff at 20% of salary and remaining employees are being paid 50% of their salary. It is also discussing modifications to the timing of some contractual payments with landlords and suppliers.

On a more positive note, Cinemark has said that it is looking tentatively to re-open its domestic sites around the beginning of July, probably state by state and over time. A gradual re-opening, even with social distancing measures, would allow them to operate profitably. An opening date of 1 July would require staff to come back around two weeks earlier, and communication with clients around the same time. The expectation would be that prices would be lower for higher profile library titles until major movies were being launched again.

Also positively, the Czech government has outline a detailed plan for re-opening the country, including setting a date for cinemas re-opening. The timing of each date may shift depending on the impact of each of the previous steps. From 20^th April 2020, the government proposes a five-phase plan for re-opening sections of the economy. Restaurants and bars with outside service or areas, museums and galleries can open from 25^th May 2020. Cinemas are grouped with ‘inside restaurants’, bars, theatres, and large gatherings and can open from 8^th June 2020. This is the first specific date we have for opening of cinemas in Europe.

In Russia, a two-screen cinema has opened in the fairly remote region of Chukotka, which has seen no cases of COVID-19 (one of only two areas in Russia that have no cases).

In China, the State Council has explicitly recommended that enclosed entertainment venues (including cinemas) remain closed for the foreseeable future. This is the highest-level statement on cinemas so far.

The European Commission has also laid out a broad set of criteria and guidelines for the economies of Member States to open up gradually and safely, whilst also making the point that some businesses and industries won’t return to normal until a vaccine is found and rolled out. The Commission President says that restaurants, bars and cinemas could resume business with restricted opening hours and limits on the number of people who could enter.

The issue for cinemas is to find the balance between re-opening cinemas and the timing of when to release major movies into them. Staggering measures and capacity ceilings in auditoriums will limit the box office revenues available, and may deter some distributors from releasing movies with high expectations. Additionally, as seems likely, there will be a national approach to re-opening of cinemas, not an international one. The International market is important to global distributors and the ability to be able to earn revenue in all major markets (especially USA and China) will be an important factor in the timing of releases.

Paramount has moved the release date of action title Infinite from 7^th August 2020 to the 28^th May 2021. Paramount has also moved SpongeBob Movie: Sponge on the Run again, to a week later than its previous move, now set for 7^th August 2020.

Disney has also now postponed the theatrical release of Soul, the new Pixar movie, from 19^th June 2020 to 20^th November 2020. Studio has shifted Raya and the Last Dragon from 25^th November 2020 to 12^th March 2021.

These date moves, like the others that have happened, also underline the clear preference for studios to keep the theatrical window first in the media window chronology.