What is cinema really worth?

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In the age of streaming what is cinema really worth?

Written by Dalmar Gibson, 09.12.2020

With the coronavirus still sadly spreading throughout the world and the possibility of a second lockdown weighing over us, debates over the relevance of the traditional multiplex cinema has been brought back into focus.

The pandemic pushed Hollywood to experiment with its exhibition as many on demand platforms introduced premium video on demand as a substitute for a traditional cinema release. Disney’s “Mulan” remake kicked off the first PVOD experience on Disney+ giving access to subscribers who want to pay an additional £19.99 to see the film. What was the result? Well, as we wait for Disney shareholders meeting to attain the accurate numbers, 7Parkdata (an analytics company associated with Yahoo!) estimated that Mulan may have grossed between $60-$90m over it’s first week of release on Disney+.

If these numbers are real then Disney still has a long way to go to cover its $200 million budget, but with a 68% increase in subscribers from Mulan, analysts are asking: If Disney can pocket more revenue from its own platform what will happen to cinema releases?

Well AMC Theaters CEO Adam Aron has a very optimistic view of cinema in a post-pandemic world. He still believes in cinema’s ability to deliver a “mystical escape and magical communal experience”, a “compelling draw” unique to the silver screen experience. He gave these comments in response to the historic deal it made with Universal earlier this year. A deal that is sure to transform the way movies are exhibited forever as it has now agreed to allow Universal to put their films on streaming platforms after only 17 days in the cinema.

Surely, this the first step toward a total online take over? It all depends on the success of PVOD as part of the deal requires Universal to only rent the film at a premium price (around £20) and AMC get a slice of the sales.

Though it is hard to imagine blockbuster films completely abandoning the multiplex that reality might just be around the corner as Hollywood tries to figure out how to give consumers what they want without destroying a 100 year old film distribution ecosystem.