Illustration: Annelise Capossela/Axios

The delayed releases of high-profile films that were supposed to kickstart the reopening of many movie theaters this summer have dealt a new blow to the already struggling theater industry.

Why it matters: Canceled releases and stringent reopening guidelines are making the coronavirus pandemic especially difficult for the theater industry, which was already fighting a bitter war with movie studios over theatrical release windows. Some analysts predict many theater operators won't survive the pandemic long term.

Driving the news: Christopher Nolan's highly anticipated film "Tenet" was pushed back from its original July 17th opening date to July 31, Warner Bros. said last week.

  • In addition, Warner Bros.' "Wonder Woman 1984" film, which was pushed from its original debut date on June 5 to August at the start of the pandemic, is now being pushed to October 2.

While some states have begun to allow cinemas to reopen, many of the biggest movie chains, like AMC, Cinemark and Regal have opted to remain closed until mid-summer, in part because it may not be financially viable to open up any sooner.

  • Social distancing guidelines will prohibit most theaters from operating anywhere near close to capacity.
  • And with so many studios pulling blockbusters from the release schedule, or delaying them, it's hard for theaters to anticipate how many tickets they'd even be able to sell if they reopened, especially since surveys show that consumers don't necessarily feel safe going to the movies quite yet.

The big picture: For movie studios, there's no question that big blockbusters need to debut on the big screen in order to make real money, which is why those theatrical releases are delayed, not cancelled. But for smaller films and indie titles, that calculation is different.

  • "The whole theatrical experience has been dying for films under $100 million for some years now," said Schuyler Moore, partner at Greenberg Glusker.
  • "What's now happened is to the extent that there was a window, it's now absolutely slammed shut," he said of smaller films.

By the numbers: Few films, probably less than 20 annually, make more than $100 million a year of the roughly 200 that are released in theaters, per Moore. "Most of those lose money, significant money."

  • Films like Disney's upcoming live action remake of "Mulan," which was originally expected to make $1 billion globally from box office sales, now face a less certain future as theaters around the world face different reopening plans.

Background: Universal was the first studio to skip the theatrical window altogether during the pandemic, when it made its hit "Trolls World Tour," as well as a few other titles, available on-demand for a 48-hour rental period at the same time as they debuted in theaters in April.

  • The film's unprecedented success, netting $100 million in 3 weeks from North American on-demand sales, has led other movie studios to follow suit for smaller films.
  • It also spooked the theater industry. In April, AMC lashed out against to Universal over the mere threat that more movies would potentially skip their theatrical releases during the pandemic and beyond.
  • AMC has signaled to investors that it may not survive the pandemic, saying in a recent government filing that "substantial doubt exists about our ability to continue as a going concern for a reasonable period of time."

The bottom line: Theater chains remain adamant that releasing Hollywood hits on-demand at the same time that they debut in theaters cannot become the new normal after the pandemic.

  • But their years-long resistance to the idea is facing pressure as movie studios begin to weigh the benefits of showing movies in theaters that can't seat at full capacity due to social distancing guidelines that are expected to stay in place for many months.

What's next: With much of the production that fuels the industry on pause for many months, expect more movies to be delayed, or to skip their theatrical releases over the next year.

  • Disney's remake of "Mulan," which was already delayed for July 24th, could too be pushed back again, now that some of its rival films have begun to delay releases. If it's not pushed back, it will now serve as the new litmus test for how major theatrical releases fair as the country begins to reopen.

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Illustration: Sarah Grillo/Axios

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