As major film exhibitors prepare to reopen for July film releases, Wall Street analyst firm MoffettNathanson predicts that U.S. box office profits will fall more than 50% in 2020 due to the COVID-19 pandemic.
The firm states that the box office total will only hit $5.5 billion for 2020, which is a 52% drop from 2019’s total of $11.4 billion. They based their prediction on the drop in ticket revenue for the year. The firm believes the box office could fall even farther if theaters do not reopen by July and summer releases get pushed back again. The forecast is more complicated by the fact that many major markets, such as New York and Los Angeles, have not announced re-opening dates.
MoffetNathan penned a note addressing the circumstances. The note states, “Given the uncertainty around the key questions we mention above, including sticking to July release dates, when key markets reopen and willingness of movie-goers to return before a vaccine, our estimates today are very much a work in process with lots of volatility in the months ahead.”
Despite the downturn for 2020, the firm believes there will be an uptick at the box office in 2021 with totals reaching $9.7 billion. The total is still short of 2019, but it could be lower if film productions do not restart and studios move their releases to streaming platforms and VOD.
MoffetNathan takes all of that into account in the note. “In the past, exhibitors have been able to stand their ground; however, we again think this time is different in that all of the major studios (including now Disney for certain movies) are likely to be more aggressive with windowing strategies,” it reads. “As long as multiple studios push forward with PVOD or some other form of window changes, the balance of power in favor of studios shifts even more in their favor and reduces the leverage the exhibitors have as they would be unlikely to boycott multiple studios’ upcoming releases.”
The news comes as theaters in the U.S. and U.K. prepare to reopen in July while film studios have faced backlash for releasing films on streaming and VOD instead of following traditional theater releases.
With the COVID-19 pandemic still raging on, an analyst suggests that U.S. box office profits will drop by over 50% in 2020.