The movie theater industry’s annus horribilis will continue to drag well into next year, according to new research from consulting firm Deloitte.

With coronavirus cases continuing to surge in the U.S., Deloitte’s Digital Media Trends 14th edition fall pulse survey asked consumers how they felt about attending a movie in a theater. Even if they had the option to do so, 71% of consumers said they would not be comfortable going to a theater within the next month — and just over half said they were unwilling to go see a movie in-person in the next six months, per the study.

Only 18% of U.S. consumers have attended a movie in a theater since the COVID-19 pandemic began, according to the Deloitte survey.

“After the pandemic is over, it is unclear what role movie theaters will play in consumer entertainment or to what extent the existing system of releases will have been disrupted,” Deloitte says in the report. “There’s a role for movie theaters — but maybe not the leading role.”

With the timeline for a broad reopening of theaters uncertain and consumer hesitancy to visit public venues, WarnerMedia this week announced that the entire 2021 slate Warner Bros. of 17 films will be released simultaneously on HBO Max and in theaters — a move blasted by theater owners. Warner Bros.’ day-and-date shift will result in $1.2 billion lost annual revenue for WarnerMedia, analyst Craig Moffett estimates, meaning HBO Max’s annual average sub gains will need to be 8.4 million higher than the current pace to hit the same revenue — and WarnerMedia will need to get a deal done with Roku to accelerate HBO Max’s uptake.

Theatergoing won’t recover until toward the third quarter of 2021, after COVID vaccines have become widely available and people feel safe, said Kevin Westcott, Deloitte vice chairman who leads the firm’s U.S. Technology, Media & Telecommunications (TMT) practice.

At this point, Westcott said, “The real question is not maximizing revenue per window but maximizing revenue per user,” he said. “I will argue that the next level of competition will be around the consumer experience.” He added: “Every crisis in the entertainment business has accelerated trends that already existed.”

Post-pandemic, whenever that may be, 35% of consumers said their preference will definitely or “probably” be to see new movies in a theater, according to the Deloitte study. But more Americans (42%) said the same about seeing first-run movies at home. During the early phase of COVID-19 stay-at-home orders, Deloitte found that 22% of consumers had paid to rent or watch a premium VOD movie — and 90% of those said they would do so again, which represents astoundingly high customer satisfaction, according to Westcott.

Consumers’ Location Preference for Watching New Movie Releases (post–COVID-19)

Source: Deloitte

The movie exhibition business won’t be dead. But it will be diminished, Westcott predicted. Theatres can be really successful for “big event” releases “but on fewer screens,” he said. “We knew we were over-screened even before the pandemic.”

In 2021, expect to see more media companies experiment with adjusting and/or collapsing windows, and introducing new tiers including streaming services with free, ad-supported (in windows after premium/subscription release periods). According to Deloitte’s survey, the top two reasons consumers cited as being incentives to keep a streaming service were: being able to switch to a reduced cost, ad-supported version of the service (28%) and exclusive movie or TV content (27%).

Added Westcott, “The other thing direct-to-consumer gives [studios] that they never had before is really rich data. It’s info they couldn’t get even with people with clipboards outside theaters.”

The survey of 1,100 U.S. consumers was conducted in October 2020 by the Deloitte Center for Technology, Media & Telecommunications.