Movie industry braces for major hit due to coronavirus
Box office at Regal South Beach. Photo: Jeff Greenberg/UIG via Getty Images.
The film industry is on pace to lose billions of dollars due to the deadly coronavirus outbreak around the world, according to analysts.
Why it matters: In the U.S., the largest box office in the world, consumers who are spooked by the virus have little incentive to leave their houses to see a movie if they can stream something at home. In China, the second-largest global box office, most theaters have been temporarily closed.
Driving the news: The opening of the latest James Bond movie "No Time To Die" has been delayed. The original April release date was postponed until November due to coronavirus impact, according to a statement.
- Thousands of theaters in China have been closed due to outbreak. The Chinese box office has so far lost an estimated $200 million in 2020.
Studios are beginning to rethink their rollout strategies, especially as many are reliant on Chinese box office revenues.
- Disney has delayed the China release of its live-action remake of "Mulan," which was expected to be a major money-maker.
- Other award-winning films like 1917, Jojo Rabit and Little Women have been removed from the Chinese release schedule.
- Some studios have had to halt production of films in places that have been impacted by the virus. Paramount delayed production of Mission: Impossible in Italy.
By the numbers: The corornavirus outbreak is causing movie theater stocks to tumble out of fears that the virus will keep movie-goers away from theaters. Most theater-chain stocks are down by 25%-40% over the past six months, with major dips occurring within the last month.
The global box office hit a record high last year, thanks mostly to growth in China. The North American box office brought in $11.4 billion, its second-highest year after 2018, while the Chinese box office totaled $9.2 billion, growing faster than North America.
- Analysts predicted that the Chinese box office would soon surpass the North American box office as the largest globally, but that's unlikely to happen this year due to the virus.
Between the lines: The virus has also caused major entertainment companies to issue warnings to investors of the possible hits to theme parks, resorts and cruise lines.
- Shanghai Disney announced on Jan. 25 that it would temporarily close due to the coronavirus. It has yet to issue a reopening date.
- Tokyo Disneyland and Universal Studios Japan have already experienced temporary closures.
- Disney Cruise Lines have implemented precautionary restrictions.
The big picture: While the out-of-home entertainment industry is expected to suffer, in-home entertainment is anticipated to thrive, as more people will be staying home, likely glued to their televisions.
- GroupM's Brian Wieser, one of the top global advertising industry analysts, predicts that television advertising sales may experience a boost due to increased viewership, but outdoor advertising like billboards and subway posters "may be worse off with lower levels of foot traffic in many places."