Movie ticket sales are cratering as theaters in the US and around the world close their doors or restrict capacity amid the coronavirus pandemic. The last time the US box office was this low on this particular March weekend was 1995, when, ironically, the highest-grossing movie was Outbreak, a film about the spread of a deadly virus through a California town.
Hollywood has already lost $7 billion, according to most estimates. It could lose another $10 billion over the next few months if theaters stay closed.
And it could still be so much worse.
The first quarter, running from January through the end of March, is typically the quietest time of the year for cinemas. It comes right after the holiday season, but before late spring and early summer when studios begin releasing some of their biggest blockbusters.
In 2019, Q1 accounted for just 14.8% of the total US box office—and that was a relatively good year for the January-to-March period. Over the last decade, Q1 has been responsible for only about 12% of the annual box office. Meanwhile, the second and third quarters, which together make up for the summer blockbuster season, can each account for more than a third of the annual box office.
For the weekend of March 13-15, the US box office grossed $55 million, the worst single weekend at any time of the year since 2000, when the Sept. 15-17 weekend totaled $54.5 million, according to Comscore. But that’s not adjusted for inflation. Taking inflation into account, this weekend’s US box office was the worst since at least the 1980s, when ticket data started being independently compiled, the New York Times reported.
There is little international box office to speak of due to the virus. Theaters in China, South Korea, Italy, and France are closed, while more countries are shuttering theater doors each day. In countries where some theaters remain open, like India, the box office is still suffering as moviegoers are being urged to stay home as much as possible to prevent the spread of the virus.
But if theaters were forced to close at any other time of the year, studios would stand to lose much more than they are now.
Many studios rely on their major “tentpole” releases—many of which come out during the summer and holiday months—to prop up the rest of the schedule. Those blockbusters are what allow Hollywood companies to subsidize everything else. Without them, studios could literally go bankrupt.
Disney, as the industry leader in the tentpole strategy, would be hit particularly hard. The same strategy that has helped the company dominate the global box office could also be what makes them more susceptible than their competitors to the devastating economic effects of the coronavirus outbreak.
Between all of its division, Disney only has nine films scheduled to be released theatrically this year. Two of them have already been impacted by coronavirus: Onward, the Pixar film released earlier this month, has had anemic ticket sales due to all the theater closures around the world. And Mulan, which was scheduled to come out this month—and expected to do quite well in China—was indefinitely postponed.
Five more Disney blockbusters are scheduled for release between May and August. The one most imminent is the Marvel film Black Widow, which is scheduled for release May 1 and could be the next potential blockbuster to be postponed:
Huge movies like the James Bond film No Time to Die, F9, and A Quiet Place: Part II have already been postponed by their studios, which have lost tens of millions of dollars on nonrefundable ad campaigns. But the costs of rescheduling these films, while substantial, still pale in comparison to the potential loss in ticket sales if they were to come out in the next few weeks as originally planned.
June was expected to be an especially big month for blockbusters this year. Four of the five major Hollywood studios have at least one tentpole planned for release then: Warner Bros. (Wonder Woman 1984 and In the Heights), Disney (Soul), Universal (Candyman), and Paramount (Top Gun: Maverick). With countries on lockdown and major US cities like New York and Los Angeles closing theaters, these movies may not be able to keep their June release dates. Studios don’t have very long before they have to decide what’s next.
In the unlikely (but possible) event the summer blockbuster season is cancelled, the lost box office revenue would, in the best case, force Hollywood studios to lay off workers, restructure their organizations, and seriously reevaluate their future release schedules. Some companies might never recover. At worst, several of Hollywood’s biggest companies would have to close up shop, or sell their remaining assets to whichever competitor was left standing. Hollywood can survive a March without movies. Whether or not it can survive a June or July without them is much less clear.