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Global Exhibitors Facing ‘Catastrophe’ if U.S. Blockbusters Are Further Delayed

Tenent
Melinda Sue Gordon/Warner Bros.

When Europe’s theaters slowly began reopening mid-June, exhibitors were hopeful that after a few weeks spent warming up audiences with archive films and rereleases, they’d have big new U.S. movies to lure customers en masse mid-summer. But the successive delays of tentpoles such as Warner Bros.’ “Tenet” and Disney’s “Mulan” and the scrapped theatrical release of Paramount’s “The SpongeBob Movie: Sponge on the Run” have left exhibitors in dire straits.

Despite Europe’s robust local film industry, Hollywood movies tend to account for the bulk of the summer box office. Even in France, arguably the continent’s biggest nation of moviegoers, the market share of U.S. pics skyrockets to at least 70% during the season, according to U.S. analytics firm Comscore.

While there’s sympathy for the unenviable position faced by U.S. studios — which fear that opening their tentpoles amid rising COVID-19 cases in major markets such as Texas, Florida and California will be met with empty theaters — there is growing resentment among some international cinema operators that the global exhibition business is being imperilled over concern for domestic releases that could still be months away.

One U.K. senior exhibitor laments, “If the exhibition community doesn’t have any new movies in the next few months, there will not be an exhibition community. For most, if not all big studio movies, between 70%-80% of all box office is offshore, and it feels like that’s been forgotten.”

U.K. cinemas were allowed to open on July 4, but major chains such as Vue and Cineworld, which had initially set July 10 reopening dates for their venues, pushed back their timelines after “Tenet” and “Mulan” were delayed in late June. Both chains will now open on July 31, but that could change if the release dates shift again this week, as expected.

“We are waiting to see what happens with the release dates before making any final decision, because it’s different if one movie moves versus several moving,” says Tim Richards, CEO of Vue Intl., which operates 91 U.K. venues.

The exhibition giant has roughly 81 cinemas currently operating across continental Europe, in markets including Germany, Denmark, Holland, Lithuania, Poland and Italy. All have stayed open thanks to a steady diet of rereleases, but Richards notes that this isn’t “a long-term, sustainable business model.”

“We can see momentum and consumer confidence building, but we can’t thrive again as an industry without a concerted effort on the major releases,” he notes. “I’d like to think, as an industry, we can look at this globally, as some U.S. states, China and Europe recover, and release films in markets that have reopened.”

Lucy Jones, Comscore executive director for the U.K. and Ireland, Italy, Middle East and Africa, says more than 35% of European cinemas have reopened halfway into the summer season. There is a “huge appetite” for new global tentpoles, she notes, but countries aren’t in sync with their exits from lockdown, causing headaches for studios weighing the benefits of a global marketing campaign against the maximization of local opportunities.

One source in close contact with the studios tells Variety that if Warner Bros. and Disney were facing a scenario in which Europe and Asia open first with “Tenet” and “Mulan” followed by the U.S. a couple of weeks later, “they’d do it every day of the week.” “The problem is they don’t know when the U.S. market is going to open up, and they’re not comfortable going longer than two weeks due to piracy.”

Hopes were high in France when nearly all the country’s theaters reopened the week of June 22. But after an outstanding first week, with nearly one million admissions sold — driven by the Juliette Binoche-starring “How to Be a Good Wife,” WWII biopic “De Gaulle” and Agnieszka Holland’s “Mr Jones” — the box office has been stagnating at about 35% of its usual July admissions.

So far, just four theaters out of 2,000 that reopened in June have closed again, “but if the situation doesn’t evolve or worsens, we could see more theaters taking that route,” says Marc-Olivier Sebbag, spokesperson for the FNCF, the national organization of French exhibitors.

“It will be a catastrophe if ‘Mulan’ and ‘Tenet’ are further delayed. We’ve been sticking to it against [all odds] because we don’t want people to forget about us, but we don’t know how long we can hold up like this,” says Jocelyn Bouyssy, managing director of CGR Cinemas, France’s second biggest multiplex chain.

For Nathanaël Karmitz, CEO of MK2, an arthouse cinema chain with nearly 30 venues in Paris and Spain, the crisis facing exhibitors due to the lack of Hollywood blockbusters has also revealed a “dangerous dependency” on U.S. content and the crucial need for strong European cinema.

France’s National Film Board launched a financial incentive in late June to encourage local distributors and producers to release their films by Aug. 30. But only a handful of distributors, including Gaumont and Pathé, have played ball so far. A similar incentive is in the works in Germany, according to Laura Houlgatte, CEO of the International Union of Cinemas.

The irony is that indie distributors currently have a real shot at having their movies widely released to fill the gap left by U.S. studios. Comscore notes that in the past month, local pics have over-performed in France, Germany, Sweden, Norway and the Netherlands, among other territories, largely due to the fact that these films have had access to more screens than usual. This access may be limited when a tide of blockbusters hits the B.O. in a few months.

But, for most exhibitors, even a local offensive is simply not enough. “We can’t just sit and wait,” says Peter Fornstam, CEO of Svenska Bio whose entire circuit reopens in Sweden on July 31. “We have to leave the door open and hope U.S. studios will say, ‘Let’s go.’”