U.S. box office expected to dive 50% in 2020 amid theater closures

Last Updated on July 30, 2021

In stats that should be surprising to no one in the wake of theater closures nationwide, the U.S. box office is expected to take a significant plunge in 2020 due to the COVID-19 pandemic. 

Movie theaters have been closed since mid-March and while some local theaters are gradually re-opening, the big chains such as AMC, Regal, and Cinemark remain shuttered. Due to this, according to a recently published report from research company MoffettNathanson via "Variety", the box office is expected to dive at least 50%, if not more, this year, when compared to 2019. The company expects that the 2020 box office will total $5.5 billion, which represents a 52% dip year-over-year. In 2019, the box office totaled $11.4 billion.

This optimistic projection does rely on several major factors which is why the plunge could be larger if things don't turn around soon. Much of this number being met relies on major theater chains actually opening their doors again in July. While this is expected to be the case, many of the larger chains have yet to reveal what their reopening plan is and a lot of it has to do with the major cities in which their brand takes in business. Los Angeles, San Francisco, and New York City are some of the prime locations that need to present a plan to re-open theaters because they make up a significant chunk of where box office revenue comes from. Major blockbusters like TENET and MULAN are expected to hit screens in July but if they are delayed for any reason, the 2020 box office could dip even further. The author of the report had this to say about the matter:

"Given the uncertainty around the key questions, we mention above, including sticking to July release dates, when key markets reopen and willingness of movie-goers to return before a vaccine, our estimates today are very much a work in progress with lots of volatility in the months ahead."

Studios, unless they have made the decision to reschedule or delay their releases, have turned to PVOD to keep the revenue flowing. Universal Pictures released TROLLS WORLD TOUR to great success on the platform while Warner Bros. found similar success with the release of their animated film, SCOOB! Theater chains have typically enjoyed a 90-day theatrical window before new releases could be made available for home viewing but this window is expected to change to a much shorter wait given the current state of affairs. Because of this, the report also suggests that studios have the upper-hand in this matter movie forward:

"In the past, exhibitors have been able to stand their ground; however, we again think this time is different in that all the major studios (including now Disney for certain movies) are likely to be more aggressive with windowing strategies. As long as multiple studios push forward with PVOD or some other form of window changes, the balance of power in favor of studios shifts even more in their favor and reduces the leverage the exhibitors have as they would  be unlikely to boycott multiple studios' upcoming releases."

The news of the potential plunge comes in the wake of Cinemark and AMC reporting their respective losses as their doors remain closed. AMC Entertainment will see a massive Q1 loss of up to $2.4 billion according to a preliminary earnings report while Cinemark, which recently confirmed a re-opening of June 19, will be down 24% from the year-ago period to $543.6 million in revenue. How the box office will look on the other side of this is still up in the air but it certainly won't be an easy road as movie theaters look to opening up again in a safe manner that will encourage moviegoers to put their butts back in the seats.