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How cinemas and streaming services will compete with viewers

Home entertainment is more prevalent than ever. Can the cinemas survive?

How Movie Theaters and Streaming Services Will Compete for Viewers
How Movie Theaters and Streaming Services Will Compete for Viewers

With major studios launching new movies directly to streaming services, theaters are struggling to stay relevant to viewers. This controversial partnership has lasted for years but the rise of the COVID-19 pandemic has overwhelmed it.

Here’s how cinemas and streaming services are constantly fighting to get your attention and what the future will look like for both.

How cinemas are used to ensure ticket sales

In the old days, when a new film was released by a major studio, it would have a specific period in theaters before it was released to the public for rent. Usually, this requires a movie to play for 90 days before anyone at home can receive a copy.

Cinemas have struggled long and hard to keep this 90-day deadline intact so they can make as much money as possible from the film.

Prior to the COVID-19 pandemic, studios were in talks with several larger theater chains to reduce screening times for smaller-cost films while increasing the duration for larger-cost blockbusters.

After people stopped going out in public for a long time, the relationship between the cinema, studio and streaming service changed dramatically.

How streaming changed the movie landscape

After the COVID-19 pandemic hit and cinemas were forced to close for months, streaming services saw record growth. Netflix alone ended 2020 with over 200 million subscribers.

Studios must release their cinemas online so that audiences can watch them safely, but also so that studios can re-collect as much money as possible.

When cinemas are allowed to open with limited capacity, studios can reach more viewers and get more revenue by working directly with streaming services. They began release the same day in both cinemas and streaming services.

This big change in the way the film was released discouraged audiences from going to theaters. Instead, they enjoy a new film from the comfort of their own couch with new and improved home entertainment settings.

Since then, major chains such as AMC and Regal have both announced concerns about the long-term prospects of theaters remaining open, with a limited number of new films screening and very few people willing to go to theaters.

The rapid growth of streaming services has led to greater investment in their own original releasees. Netflix can now invest in the release of its own movies at a price that major studios can only dream of.

Smaller theaters have suffered a rapid change in the way viewers view entertainment movies. Without big budgets or savings to rest, many have been forced to close for good.

This trend has been seen worldwide, even in places where the number of coronavirus cases has decreased such as China and New Zealand. The revenue generated from these cinemas is not nearly enough to keep the industry growing.

Where is the film industry growing?

With theater attendances at an all-time low, larger chains have been forced to negotiate deals that benefit studios and streaming services to stay strong.

For Universal and AMC, an agreement was signed to reduce the normal 90-day projection duration to home distribution. It’s only 17 days now. Similar transactions were also made with Cinemark and Cineplex.

This is not something theaters hope for recovery from the COVID-19 pandemic, but at this point, it’s the best they can get.

Another possible change is that theaters begin to negotiate directly with streaming services, rather than with major studios. Since streaming services now have a budget to create and release their own content, cinemas can negotiate to show their content.

This could create a new kind of cinema where a large company like Amazon can use part of the theater’s floor area to advertise their own products while they release their films. Again, not exactly what the theater had hoped for, but at least it could keep the doors open.

Here’s Look at You, Theater

No one can deny the main effects that streaming services have in the film industry. Now that studios are starting to have major premieres live, theaters need to re-negotiate contracts that have been around for decades to survive.

In the meantime, you can at least enjoy free online movies from home comfort.

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