The Coronavirus’ Effect on the Entertainment, Movie, Publishing & Media Industry

The Coronavirus pandemic of 2020 had a devastating effect on parts of the entertainment and media industry—specifically those that require in-person attendance. At the same time, it caused remote, streaming viewing of entertainment and content of all types to soar.

Movie theaters around the world went dark for months on end, with the exception of drive-in theaters, which saw a marked upswing as films, church services and even weddings were projected onto big screens (in parking lots as well as at existing drive-ins). Many theaters are facing massive financial losses, bankruptcy or permanent closure. AMC Entertainment, Inc. announced in a 2020 regulatory filing that it may run out of cash by year end or early 2021. Cineworld, which owns the Regal chain, temporarily closed all its theaters in the U.K. and the U.S. in October 2020, furloughing 45,000 employees. Cinemex Holdings USA filed for bankruptcy in April 2020. The Directors Guild of America and the Motion Picture Association projected, if the Coronavirus crisis does not improve, that 69% of small and mid-sized movie theater companies will be forced into bankruptcy or permanently close, and 66% of theater jobs would be lost. Live entertainment, from theaters on famous Broadway in New York City to specialty shows produced by groups like Cirque de Soleil (which took bankruptcy in June 2020 but has growth plans for 2021 and beyond), have likewise been devastated.

In the United States, Congress passed additional economic stimulus provisions of special interest to the entertainment sector. This funding totals $15 billion, and is available to certain arts venues, theaters (including movie theaters), performing arts groups, museums and zoos. It remains to be seen whether this will be enough to maintain the existence of a large number of venues and firms.

The fact that movie theaters were closed or underutilized during much of 2020 hurt film production and distribution companies, since their ability to earn box office revenue share was limited. Movie studios decided to delay the release of many new films until 2021. Equally significant, studios began releasing major films directly to streaming services such as Disney+ and HBO Max. This is a massive change. Traditionally, new movies were first released exclusively to theaters for a period of about 90 days before becoming available to stream or to view on DVDs. The Coronavirus is forcing studios into a new business model. Warner Bros., for example, released Wonder Woman 1984 in late 2020 to theaters and also to HBO Max for the first 31 days of release. After that period, the film was pulled from HBO Max and was available only in theaters for its next two months. The studio may release its entire slate of 2021 films in the same manner.

The winners in this seismic shift are the streaming services. The largest of those, including Netflix, Amazon Prime and Disney+, were expected to see combined U.S. subscriber numbers for 2020 as much as 50% higher than in 2019. Services that produce original content, such as Netflix’s The Queen’s Gambit and Amazon’s The Marvelous Mrs. Maisel are racking up awards as well as viewers in the tens of millions (The Queen’s Gambit was watched by 62 million households in its four weeks of release).

Netflix has been producing roughly 60 new films yearly and may double that amount in 2021. Amazon produced 24 new films in 2020 and plans 26 for 2021.

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