The year 2020 is almost behind us, and the movie industry is among those looking to a fresh start. In this week's "Cinema Chat," WEMU's David Fair talks to Michigan Theater Foundation executive director Russ Collins about what industry trends are likely to continue after a pandemic year and the changes it could bring to how we receive and consume movies.
WHAT'S AHEAD FOR THE MICHIGAN AND STATE THEATERS AND MOVIES AND SHOWS IN GENERAL?
Nine months of pandemic impairment and counting . . . however, all things considered, the Michigan Theater Foundation is in a fairly strong financial and operating position. The State and Michigan theaters are opened in October and November on a limited basis for film screenings. Attendance is slight, which was frustrating because with changes made to ventilation and operating systems, our theaters are actually safe public spaces, e.g. attending a film screening at the State and Michigan theaters is arguably safer than inviting friends, neighbors and family to one’s home.
The preliminary financial outcome for the fiscal year ending 9/30/2020 was bad, but better than budgeted. This is because of strong donor support, special government funding and thoughtful cost controls. The overall effect of business operations in FY 2020, despite the pandemic, was net neutral to our balance sheet we lost money, about a million dollars, but mostly this was from depreciation. Pledge payments due from our State and Michigan campaign provided cash flow (in addition to government funds and donations) to of set operating losses. This is encouraging because prospects for FY2021 (10/1/2020-9/30/2021) are problematic at best.
We are currently closed and because of consumer anxiety and, through probably mid-February a depressed level of films to show at theaters, we do not expect to reopen for a few more weeks. We anticipate only a slow and partial recovery through the first three quarters of the 2021 calendar year. COVID-19 vaccines will gradually be rolled out to the general population now until the summer.
In an article for the medical journal “Stat,” Dr. Howard Markel, a historian of medicine at the University of Michigan said, “We will come through on the other side and we will go back to our lives. There have been epidemics for millennia, and those who survive move on with their lives and they go on.” “Stat” magazine postulates that by December 2021, life will feel safe enough and the fear if COVID-19 felt in 2020 will start to blur. Markel continued, “The typical final act of health emergencies is ‘global amnesia,’ when people forget what they just lived through.” Consequently, as we enter the last quarter of 2021, we expect audiences will begin to return in reasonable numbers to venues like the Michigan Theater – for both films and live shows.
To outline in broad strokes our future, it is good to look at the recent past. In FY2018 and FY2019, our operating revenues were around $6.5 million annually. In the just completed FY2020 (about a half year of “normal” operations and just over a half year of being shut down), our operating revenue was $3.8 million. In FY2021, which started October 1, operating revenue is expected to be around $2 million. In FY2022, our preliminary projections put operating revenue at between $4 million and $5 million.
Growth will continue through FY2023, and by FY2024, if we are clever, clear headed and have available capital to take some risks, a “new normal” will be established programming and operations in a scale similar to pre-COVID-19 pandemic disruption. In FY2026, we expect to start working on a Centennial Capital Campaign, which will conclude in FY2028, the Centennial year of the Michigan Theater’s opening. Part of that major fund-raising campaign, besides significant restoration work, equipment modernization and growing our endowments, might be COVID-19 debt elimination.
It is a long road ahead with lots of trouble and opportunities. We will indeed survive and our goal must be to use this painful disruption to shed fetters and injustices of the past, embrace the ever changing dynamics of an evolving world and thrive – for the benefit of the community and the arts!
AWARDS SEASON – Despite the Pandemic Disruption, Though Delay, It Will Occur!
BEST FILMS OF 2020 – According to the current Oscar betting odds
- The Trial of the Chicago 7
- News of the World
- One Night In Miami
- Da 5 Bloods
- Ma Rainey’s Black Bottom
- The Father
ACADEMY AWARDS 2021: THE ANSWERS TO ALL OF YOUR QUESTIONS
As any movie lover knows, this year’s award season has been turned upside-down due to the coronavirus pandemic. While the Sundance Film Festival took place before all the shutdowns, the big three fall festivals—a canceled Telluride, a diminished semi-virtual TIFF, and Venice—failed to have the usual impact to influence what films are deemed front-runners so far this year. Also complicating matters is the large number of highly-anticipated big-budget films that have been rescheduled to come out after the qualifying periods for 2021 honors, such as “No Time to Die,” Daniel Craig’s final appearance as James Bond, and Denis Villeneuve’s “Dune."
Given that many productions had to shut down this winter while patrons were unable to go to theaters, new eligibility rules had to be made and key dates had to be shifted by the Academy of Motion Picture Arts & Sciences. Here is a rundown of what we know about the status of the 93rd Academy Awards so far.
When will the award shows take place?
- The Academy and ABC announced though originally scheduled for February 28th, would be moved to April 25th—the latest date ever since the show was first broadcast on TV
- The submission deadlines for specialty categories—Best Animated Feature Film, Documentary Feature, Documentary Short Subject, International feature film, Animated Short film and Live Action short film—was moved to December 1st from October 1st.
- The deadline for general entry categories, including Best Picture, Original Song and Original Score, is now January 15th, 2021 rather than November 15th.
- On February 1st, preliminary voting begins for the nine categories with shortlists: Best Documentary Feature, Documentary Short Subject, International Feature Film, Makeup and Hairstyling, Original Score, Original Song, Animated Short Film, Live Action Short Film and Visual Effects. Other notable deadlines:
- Friday, February 5: Preliminary voting ends
- Tuesday, February 9: Oscar shortlists announcement
- Wednesday, March 5: Nominations voting begins
- Wednesday, March 10: Nomination voting ends
- Monday, March 15: Oscar nominations announcement
- Thursday, April 15: Oscar nominees luncheon
- Thursday, April 15: Final voting begins
- Tuesday, April 20: Final voting ends
- The 78th Golden Globes decided to sneak into Oscar’s vacated date on Sunday, February 28th, 2021. Lucky for the Hollywood Foreign Press, the organization already announced that Tina Fey and Amy Poehler would host this edition (current there is not host for the Oscars).
- The Screen Actors Guild Awards will take place on Sunday, March 14th.
- Critics Choice Awards will take place on March 7th, 2021. The event will once again be hosted by Taye Diggs and will be broadcast live on The CW network.
- The Independent Spirit Awards, which generally takes place the Saturday before the Oscars, will follow tradition and take place on April 24th, 2021.
- BAFTA Film Awards, the ceremony originally scheduled for February 14th will now take place on April 11th.
BACKGROUND FOR DISCUSSION ABOUT THE FUTURE OF MOVIE THEATERS
Why are movie theaters still the heart of the cinema experience in the digital age? by Russ Collins
In this disrupted digital age, with movie theaters closed, Netflix, Disney +, HBO Max, Peecock and more are the obsession of the entertainment media and the Internet Goliath Amazon seems poised to take over the world, can we still believe seeing a movie in a movie theater even matters? I say, “Yes,” in fact, I think seeing cinema in a movie theater is an unstoppable human need.
Why? The community-based Art House resonates deeply in the human psyche. Going to a public cinema to see a movie is intrinsically profound. For example, comedies are always funnier seen with a live audience. Movies at theaters also speak to the primordial “Campfire Desire.” What I mean by “Campfire Desire” is a deeply rooted impulse in human beings to gather together to experience great stories masterfully told by flickering light. This desire, to experience stories shared in a public setting, is seemingly imbedded in our DNA. Public story telling is a 100,000-year-old or more Homosapien tradition born of ancient shamans and story tellers who shared oral traditions and tribal stories around a communal fire. These stories both taught tribal culture and heritage, and allowed a wise story teller to comment on the group’s contemporary conditions, follies and foibles. Or sometimes, just for fun, these same wise storytellers would entertain their community, distracting them from the troubles and trials of life. This public story-telling tradition – sitting in a dark, communal space with family, friends and members of our community – reaches deep into our collective consciousness. Which is why, I believe community-based, mission-driven Art House cinemas are an unstoppable cultural force.
The human mind is structured around hearing and seeing stories. Understanding and remembering stories fits with how our brains are engineered to work. Stories in any form – books, television, online streaming, listened to over an audio device, hearing a tiresome old tale from your least favorite uncle – it doesn’t matter, we just love stories. And stories presented in the public space of a theater fulfills a profound human need for public storytelling. For this reason, Art House cinema exhibition is a truly noble and essential endeavor:
- Noble because celebrating great storytelling, through the voice of well-crafted films, and providing the transformative power of cinema to your community is worthy of all the hard work and dedication required to make our theaters successful.
- Needed because people and society require significant arts experiences to promote creativity, build true literacy and promote profoundly meaningful personal growth and learning.
The arts challenge the mind, comfort the soul and extend understanding. Cinema is the most significant art form developed in the modern era, which makes the local cinema operator an important public storyteller. You are a critical source for this profoundly transformative art form which resonates directly with the primordial and powerful “Campfire Desire.” Your organization is an important community asset which, de facto, makes you a very special person and an important leader in your community.
What Warner Bros.’ Streaming Strategy Means for Netflix and Movie Theaters: A Dialogue
Movie theaters have been brought low by coronavirus and even the promise of a vaccine may not be enough to rescue them from financial ruin. With film studios putting upcoming blockbusters like “Wonder Woman: 1984,” “Dune” and “Soul” on streaming services and major exhibitors teetering on the edge of insolvency, will the big screen experience be able to outlast the pandemic? Brent Lang, Variety’s executive editor of film and media, and its two chief film critics, Peter Debruge and Owen Gleiberman, discuss what the HBO Max news means for the theatrical landscape and whether movie theaters are an endangered species.
Owen Gleiberman: The arrival of a COVID vaccine offers the first concrete hope that we may, relatively soon, be glimpsing the light at the end of the tunnel of this pandemic. So what does that mean for movies, and for the battered landscape of movie theaters? Pretend it’s three years from now. The pandemic is behind us. Will going out to a movie look and feel the way it did in 2019, before all of this started? Will movie theaters occupy the same place in the industry? If not, how will it be different?
Brent Lang: I hope and pray there will still be movie theaters in three years. I know that I personally cannot wait to put COVID behind me and reemerge from my tiny apartment to visit my neighborhood theater (shout out to Cobble Hill Cinemas!). But I do worry that when that comes to pass studios will have moved with so much momentum towards their streaming future that they won’t be devoting the same kind of resources to making movies for the big screen. Warner Bros seemed to be mapping out that kind of “evolution” last week when it opted to release its entire 2021 slate on HBO Max at the same time the movies will open in whatever theaters are still open. What’s interesting is that many of the films, such as “The Suicide Squad” and “Dune,” are slated to be released in the summer or fall, past the point where medical experts have suggested a vaccine will be readily available. That’s not exactly a sign that the studio thinks theaters will come back strong.
Then there’s the financial part of the equation. That slate represents more than $1 billion in production spending spread across 17 movies – a massively expensive gamble and a move that will leave other studios, particularly those that have in-house streaming services, scrambling to counter by thrusting blockbusters out of the theatrical marketplace and into the digital arena in the hopes of feeding the binge-watching beast. What does that mean for Hollywood? The old totems of success, Oscars and box office grosses, may fade in favor of new signposts of financial favor. Don’t be surprised if agents, directors and producers start getting a lot better versed in subscriber churns rates and get a lot less animated about awards season or next year’s Sundance. If you look at the way that WarnerMedia, Disney and Universal/Comcast have reorganized their executive teams in recent months, it’s with a clear eye towards augmenting their streaming offerings and with a knowledge that the movie business is going to be a less important component of their bottom lines. That may be inevitable, but as someone who lives for cinema (I have almost a Pavlovian response to the smell of popcorn), I’d be lying if I said that doesn’t make me sad and worried about an art form I love.
Peter Debruge: I’d be lying if I said I loved the direction Hollywood was heading prior to the pandemic. Just look at all the “big titles” that have been postponed or pushed to streaming this year: a handful of superhero tentpoles from DC and Marvel, a couple live-action remakes of classic Disney cartoons, and more sequels than you can count, from “A Quiet Place” to “No Time to Die.” I enjoy seeing spectacular films on the big screen, surrounded by audiences and the smell of popcorn (even if I never partake of the stuff), but I miss the more modestly budgeted story- and character-driven movies — an area where the streamers had already stepped in to fill the void. The business had already reoriented around a “too big to fail” budget model, when the pandemic came along and eliminated the option of packing 3,000-plus screens to capacity, forcing everyone to consider collapsing release windows.
The big unknown through all of this has been the length of the pandemic, and the longer it drags on, the deeper the transformation to our moviegoing habits will be. Frankly, I’m astonished — but also encouraged — that the vaccine has come this fast. (Warp speed, indeed!) To your question, Owen, I believe that audiences are ready and willing to come back as soon as it’s safe. Just look at how they’re still crowding into restaurants and stores amid spiking test results. Old habits die hard, and this industry has withstood other challenges, like war and seven “Police Academy” movies. However, there was a huge segment of the market that had been priced out by ticket costs or who simply preferred the convenience of watching at home. Before the pandemic, they had no leverage to influence the industry’s release plans, but now, the industry is scrambling to give them what they’ve been asking for all along. “Dune,” “The Matrix 4” and the “Avatar” sequels will always look better on a big screen, and audiences will still be able to see them that way — but now, it’s not their only option, even if it’s the one I prefer.
OG: Let me float a radical theory. I think the model that Warner Bros. has just come up with — smashing the window to smithereens, opening the biggest blockbusters day-and-date — doesn’t have a prayer of working in the long run. It does make a kind of sense during the pandemic, when the number of movie theaters in operation is quite limited. Essentially, Warners is saying that in 2021, they’re going to open their big films on HBO Max, period. The sprinkling of theaters those movies will also play at amounts to a theoretical value added. Basically, these films are heading straight for the home screen, just as “Trolls World Tour” and “The King of Staten Island” did.
Yet once the pandemic is over, opening movies on streaming services and in theaters simultaneously makes no sense. Even winnowing down the window to, say, two weeks makes no sense. It’s what the exhibitors have argued all along: If you do that, you’re going to kill your theatrical revenues. Right now, it’s almost hip to say that theatrical is on the way out, and that streaming is the new king. But theatrical is kind of like print media: It’s supposed to be a dinosaur, but it’s still where the major money gets made. Once the pandemic is over, I think theatrical is going to get a burst of life — a shot in the arm, if you will, from the millions of folks who are tired of staying at home. And if I’m right about that, does the industry want to encourage those people to go out to the movies? Or does it want to discourage them? The latter option strikes me as bizarrely self-destructive. It strikes me as killing the golden goose (even if that goose is, admittedly, getting on a bit in years). And that’s what the Warners day-and-date model does. It kills theatrical — makes it irrelevant. I’m not sure that’s really been thought through.
BL: Owen, you raise a good point. It’s not just that Warner Bros. Is forgoing potentially hundreds of millions of dollars in ticket sales, they are also jeopardizing what is known in industry parlance as “downstream revenues.” That’s the money you earn from licensing movies to broadcast television and cable channels, as well as renting and selling the movies to fans (the latter a declining source of profits post-DVD boom). That means that “Dune” or “The Suicide Squad” has to make up that lost revenue by adding subscribers, which is harder to measure and, thus, monetize. Plus, a lot of these streaming services — Apple, HBO Max, and Disney Plus — have artificially bolstered their subscriber numbers by offering free trials. When people are asked to pay for their HBO Max subscription, it may take a whole lot more than the prospect of watching “The Many Saints of Newark” to get them to share their credit card info, especially if the economy continues to teeter, impacting discretionary spending all over the place.
So, in the long run, I think you’re right, Owen. This era of streaming blockbusters isn’t sustainable. In the short term, I worry about something that Peter alluded to when he talked about the gap Netflix has filled in the movie business by making films from directors like Spike Lee (“Da 5 Bloods”) or Alfonso Cuarón (“Roma”) that studios deem as too risky or “too small to succeed.” Can Netflix continue to be the home of auteurs when HBO Max and Disney Plus are offering up populist fare? Owen, we both loved “Mank,” but I noticed that David Fincher’s masterful look at Hollywood history didn’t even crack the top 10 most streamed films on Netflix last weekend. That’s a lot of money to shell out for a movie that’s more admired than watched. My guess is that Ted Sarandos exerts more energy getting another sequel to “The Kissing Booth” or a follow-up to “Extraction” into production than he does listening to pitches from Noah Baumbach.
PD: The irony of the Netflix situation is that the company is still doing theatrical-first releases of prestige titles like “Hillbilly Elegy” and “Ma Rainey’s Black Bottom,” whereas Disney and Warner Bros. have pulled the plug on those plans and gone streaming-only with “Soul” and “Wonder Woman 1984,” respectively. This has less to do with Netflix’s professed love of movies (it shows how little Netflix understands its subscriber base that it would banish 1930s-era classics from the service, but back an expensive black-and-white drama about the writing of “Citizen Kane”) than its desire to compete at the Oscars. This year, the Academy bent its rules to allow streaming releases, but only those that already had a theatrical plan in place. I’m pretty sure that Netflix and Amazon, which stand to clean up at the Oscars this year, are only playing theaters because they don’t want to be disqualified, whereas studios are throwing their exhibitor relationships under the bus to keep the ship afloat.
I admire the distributors with the fortitude to wait this out, such as Searchlight Pictures and A24, which have pushed most of their slates — from “Antlers” to “Zola” — indefinitely into the future because they believe in the big-screen experience. But there are a hundred outdated aspects of seeing movies in theaters that continue to frustrate, like the fact that if you don’t live in New York or Los Angeles, you typically have to wait weeks or months until films from those distributors reach your local art house. Subscription-based streamers and VOD options make the films available to audiences no matter where they live, turning specialty titles into wide releases. I continue to believe that the theatrical experience can and must change. For example, admission prices will probably go way, way up or way, way down. Pre-pandemic, the MoviePass phenomenon showed that many people would be going to theaters far more if they could afford it. But the answer may actually be to swing in the opposite direction, turning cinemas into a luxury experience for those willing to pay a premium.
OG: I think you’re right, Peter, that the theater experience needs to evolve. But if it turns into a luxury item, and going to the movies comes to be thought of as a boutique event, then that, to me, will just be a fancy way of movies dying on the vine. For 100 years, the cinema has been a popular medium, and that has been its lifeblood. Going forward, I think the industry needs to heed the criticisms and think in terms of making the theater experience friendlier, more accessible, and maybe less expensive, in the way that the MoviePass moment indicated. I don’t want to come off as a nostalgic dweeb, but years ago movie theaters were thought of as palaces. People relished the chance to go to them. I don’t think that hunger has vanished. So here’s a question: Could that feeling come back? In the next 10 years, is it possible that we could see the movie-theater experience not destroyed but rejuvenated and redeemed? Stranger things have happened.
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