Jul 24, 2020 - Economy

Hollywood's lost summer

Photo illustration of lights flickering off of the Hollywood sign.

Photo illustration: Aïda Amer. Photo: David Livingston/GC Images

Nearly five months after Hollywood first began to shutter, the prospect of a reopening of theaters and production sets still seems grim.

Why it matters: The entertainment industry was experiencing record theater revenues and explosive production demand prior to the coronavirus. Now, Hollywood's facing its biggest financial crisis ever.

Driving the news: Disney pulled its live action remake of "Mulan" from its release calendar Thursday, marking the fourth time the entertainment giant has delayed the movie's theatrical debut.

  • "Mulan," initially set to release on March 27, was pushed to July 24 and then again to August 21. Now, Disney says it doesn't know when the film will hit theaters.
  • "Star Wars" and "Avatar" sequels have also been delayed by a year, Disney said.
  • ”Tenet,” the highly-anticipated Christopher Nolan film, was also pulled by Warner Bros. from its release schedule indefinitely after being delayed from its original July 17th debut date.

Be smart: With most Chinese theaters still shuttered, movie studios that were banking on lucrative global releases are stuck.

  • Before the pandemic, analysts expected "Mulan" to bring in at least $1 billion globally at the box office, with a large chunk of money coming from Chinese moviegoers.

The big picture: For most studios, being aligned with a streaming service has been a game-changer.

  • On an earnings call for Warner Bros. parent company AT&T, executives said that "Tenet" will debut in theaters, but alluded that other movies that have been delayed, like "Wonder Women," could go straight to streaming on AT&T's new service HBO Max if theaters don't open.

Theater chains have suffered tremendously from Hollywood's pandemic pause. Unlike big movie studios, which can delay releases or send movies to streaming if they need, theater chains like AMC, Regal and Cinemark are mostly beholden to health officials and studios to decide when and how they can reopen.

  • AMC said Thursday that it's pushing back reopening of most U.S. theaters until mid- to late-August. The company has faced enormous economic challenges during the outbreak. Last month, it signaled to investors that it may not survive the pandemic.

Actors, writers, directors and production staff are struggling to find work. Unions from the arts and entertainment industries have been lobbying lawmakers for months to help freelancers take advantage of earlier pandemic relief packages.

  • The television industry is also struggling to get summer production up and running in time to round out its fall TV schedule.

The bottom line: Hollywood is on track to face its worst-ever year at the box office since the 1970s. At the same time, television networks, despite record viewership, are facing steep advertising declines. The entire industry is feeling the weight of the crisis.

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