Omdia: Cinema industry set to lose billions as studios look to streaming

The global cinema industry is set to lose US$32 billion in 2020 due to the COVID-19 pandemic a 71.5% reduction in box office revenue compared to 2019, according to Omdia’s latest ‘Movie Windows: Adapting for the future’ report.

Box office revenue has dipped below US$13 billion for the first time in over two decades, leading studios to release movies on digital platforms as an alternative.

While box-office revenues have been significantly hit, streaming has boomed. Online transactional and SVOD revenue is set to increase by 30% from 2019 to US$34 billion in 2020, according to Omdia

Nevertheless, despite high-profile premium video-on-demand experiments such as Disney’s online release of Mulan, and the shortening of the theatrical window of Wonder Woman 1984 to only one week, PVOD has only accounted for US$630 million in revenues for studios in 2020.

According to Omdia, while COVID-19 has accelerated the experimentation of the length of theatrical windows and other platform launches, many studios will still be looking towards 2021 and beyond to resume their big blockbuster cinema launches. In 2019, the US Top 10 films generate 70% of their box office takings within the first two weeks of release. This compares to 63.1% for the films ranked between 41 and 50 and 40.9% for the films between 91 and 100, the research outfit said.

With traditional theatrical windows typically including a 90-day theatrical release window, 14-day EST period, followed by a 90-day VOD digital rental and physical retail window, followed by availability on subscription services and pay TV, PVOD represents a drastic change.

Maria Rua Aguete, senior director, media and entertainment at Omdia said: “COVID-19 also created a bottleneck of new releases which puts into question the traditional windowing model as downstream revenue sources suffer from the lack of new releases onto other platforms in 2020 and 2021. It has also created a unique opportunity for studios to experiment with other distribution models such as PVOD or and to a lesser degree straight-to-streaming without equivalent relationship damages as before.

“Most 2020 experimentation has not been about moving new release movies to latter windows (namely, online subscription video) sooner however, rather about creating new and temporary revenue streams to capitalise on produced content via PVOD or otherwise.”