How to value a film library is a major question in the COVID-19 era as cinemas and streamers turn to older titles to plug the gap caused by production suspensions, and face a reluctance to release new titles in a time of social distancing, coupled with a resurgent dialogue around historic race depictions.

The U.K.’s ‘Relaunching Cinema: Content for Recovery’ initiative will try to lure customers to movie theaters when they open in England on July 4 with 450 new and classic films. Yet within the ‘Relaunching Cinema’ program, cinema exhibitors are going to have to negotiate with rights holders on each individual deal, and it’s unlikely that it will follow the Chinese model where exhibitors were allowed to keep all proceeds. In any case, Chinese cinemas soon closed again with audiences staying home and the spectre of coronavirus refusing to go away.

And more seemingly bad news for holders of classic films came as streaming sites, in reaction to the Black Lives Matter campaign, removed heritage programming due to racist and sensitive depictions.

Phillip Knatchbull, CEO of Curzon, the U.K. company that owns a chain of cinemas, a streaming platform and houses a distribution arm, tells Variety, “It’s less of a problem with films like ‘Gone With the Wind’ — the film was made in 1939 and the problematic nature of the depictions of the Black characters is not new information.”

However, other titles that are newly seen as problematic may lose value in the current climate, “Films are live cultural objects, so it is completely right that their cultural and artistic merits are discussed and debated,” explains Knatchbull. “Sometimes, for a variety of reasons, they fall out of favor. Other times, a film might be rediscovered, and its value rises. That’s the nature of it.”

The value of film libraries suffered from the rise of streaming services and VOD, as consumers, in the age of Marie Kondo, not only stopped buying DVD and Blurays in great numbers, but decided to get rid of paraphernalia cluttering their homes. The MPAA reported that global sales of video disc formats dropped by half from $25.2 billion in 2014 to $13.1 billion in 2018.

“The film business was in a state of decline for many years because of TV, streaming and other forms of entertainment, but it was doing pretty well before cinemas closed,” says Jeremy Thomas, chairman of HanWay Films.

Thomas’s company owns HanWay – The Collections, highlights of which include films produced by Thomas, such as Bernardo Bertolucci’s best picture Oscar winner “The Last Emperor” (1987), a collection of 26 features and 14 shorts by Wim Wenders, titles by Sally Potter and 14 recently acquired works by Amos Gitai.

“Predating COVID-19, there was a renewed interest in our catalogue and the business was picking up,” says Thomas.

Coinciding with this renewed interest, HanWay negotiated a deal with Arrow Films to handle distribution and restorations in the U.K. of the Jeremy Thomas Collection, restoring five titles a year. These include the 4K restoration of David Cronenberg’s “Crash,” which debuted at the Venice Film Festival last year, and the upcoming 4K master of Gary Oldman’s “Nil by Mouth.”

Thomas says, “Looking after films is not only about getting them shown, but it’s also gardening and keeping them in good condition and keeping them up to date in the preferred media of the day. If you don’t have films available, they are being pirated anyway, so you need to keep your films in distribution in some way.”

Quentin Carbonell, director and founder of Q-Rate Consulting, who works with the Cannes Marché du Film and streaming platforms, explains that the market upturn comes down to cultural shifts as well as digital platforms starting to mature. “Both the market and audience have access to and demand different voices — more female directors, for example. More cultures from around the world are now represented across the constellation of streaming services. I’ve been recently acquiring a lot of Indian libraries.”

In December 2019, Cohen Media Group bought British arthouse theater chain Curzon in a deal that also included its distribution arm and streaming service. Cohen Media also purchased Landmark Theatres in the U.S. at the end of 2018 as the market began to consolidate.

“People will always want to delve into film history,” says Knatchbull. “The method of dissemination has moved much more online over the years, but the impulse remains the same. Our owner, Charles Cohen, shares that passion for film culture and is heavily involved in film restoration. So, it will be an important part of how we work together with Cohen Media. We’ve recently added a number of restorations to Curzon Home Cinema including the Merchant Ivory films.”

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Merry Christmas, Mr. Lawrence (HanWay) HanWay

The Merchant Ivory Collection, which includes “Maurice,” “Heat and Dust” and “Shakespeare Wallah,” were added to the streaming service just as screen consumption jumped, with the public staying at home as COVID-19 spread globally. Knatchbull says, “In the short term, lots of people have been using lockdown to go back and watch some classics and explore film history, so having a rich catalogue like ours has been a real benefit.”

However, the value of the theatrical market going forward has a big question mark over it. With cinemas yet to reopen, and minimal data on how social distancing rules will affect attendance, it isn’t easy to guess what box-office value is. Also, for ancillary markets, the ability to use a theatrical release for marketing has dissipated.

Valuing film catalogues amid a pandemic is tricky, especially with no sign of an imminent vaccine. The big question is whether the uptake on digital platforms will lead to a great new revenue stream, with more titles available in distribution and future market share when cinemas do eventually reopen.

Carbonell says, “There will be evaluations pre-coronavirus, during coronavirus and post-coronavirus of what the usages are. I am sure a sizeable proportion of people will keep using services they started using during COVID-19.”

Carbonell adds that while different markets move at different paces, there has been a noticeable shift towards catalogue, suggesting that the value of libraries will increase. “In France, the broadcasters have invested much more in catalogues than they have in recent years. But then there was an outcry from 70 independent publishers that they need help because the physical market is struggling.”

Knatchbull feels that the number of subscription services available, such as Amazon, Apple, Disney Plus, HBO Max, Mubi, Criterion and Netflix, will hit a saturation point. “There’s a limit to how many subscription services customers will engage with. Our approach is more of an intention-viewing experience. Watch the film you want to see without committing to a monthly payment.”

What is emerging on streaming platforms is that value is coming from three areas: curation, exclusivity and collections. “Exclusivity is vital for platforms to stand out from the crowd,” says Curzon’s Knatchbull. “It means you can be confident your marketing effort is focusing on your platform. There is a cumulative benefit of having collections of films from one director. You find people follow their curiosity from one film to the other.”

HanWay – The Collections is finding value in owning many films from a single auteur. Thomas says, “By putting all of Gitai’s films together, if someone wants to do a retrospective in the cinema, or license them all for a digital platform they can just come to us, rather than a lot of separate people.”

Or the value can come from trust in a brand. Carbonell says, “A24 or Netflix, both occupying a different space, have both acquired an incredible following, giving them an authority to take more risks.”