The global cinema industry is set to lose $32 billion in 2020 due to the COVID-19 pandemic, a 71.5% reduction in box office revenue compared to 2019, according to a recent report by media and tech research firm Omdia.
Omdia’s “Movie Windows: Adapting for the future” report finds that box office revenue has dipped below $13 billion for the first time in more than 20 years.
Whilst box-office revenues have been hit, there’s been unprecedented growth in online video usage — both transactional and subscription — during 2020, the report finds. Online transactional and subscription video revenue is set to increase by 30% year-on-year from 2019’s $26 billion to $34 billion in 2020.
The report also states that premium VOD has accounted for only $630 million in revenues for studios in 2020.
While the pandemic has accelerated experimentation with 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, the report notes.
“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,” said Maria Rua Aguete, senior director for media and entertainment at Omdia. “It has also created a unique opportunity for studios to experiment with other distribution models such as PVOD 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, but rather about creating new and temporary revenue streams to capitalize on produced content via PVOD or otherwise,” she added.
Omdia’s report is keeping with their assessment in June that studio revenues would plummet by 70%.