You are here
Home > English Posts > The Door Problem

The Door Problem

The Major Studios are Rose, the Big Cinema Theaters Chains are Jack, the Door is represented by the distribution chains.

This is the english version of the post by Roberto Recchioni published on ScreenWeek.

All I’ve been doing for days is reading industry’s analysis, datas and projections. The reason is pretty simple: I don’t understand and I’m trying to understand what’s going on in the western cinema industry and why there are so many contradictions. 

How is it possible that, on one hand, the biggest US cinema chain (AMC), recently refinanced, affirmed that in six months it’ll go bankrupt if the situation doesn’t change (or if  they’re not getting a huge help), while on the other hand the major studios are postponing their most anticipated releases by six months or one year?

How is it possible that while the  cassandras are telling us about the death of cinema as we know it, and while there’s not a precise prediction for the movies releases in the next year, all the sets were still reopened and the numbers of projects going into production skyrocketed?

How is it possible that while the Chinese market is flourishing, getting record box office numbers thanks to movie theaters, in the USA essential markets like New York and Los Angeles are still closed and in the other territories there are no new releases in theaters?

As I said, I’ve been thinking about it. I’ve been thinking about it a lot. And I understood that this situation is like Rose, Jack and the floating door all over again.

You know the ending to Titanic, right? Rose is on a door in the middle of the sea, Jack is near, in the freezing Atlantic Sea waters. Rose tries to get Jack on the door, but they risk to sink together, so (after only one attempt), she gives up, letting her great love die. 

So here it is, The Major Studios are Rose, the  Big Cinema Theaters Chains are Jack, the Door is represented by the distribution chains and that single, failed attempt is Tenet.

I’ll try to explain myself.

Do the major studios and the distribution companies want the current cinema theaters system, and all the companies linked to it, to die? 

No, but between living alone or dying together, they chose to live. Because sooner or later, life will begin again and a new great love will come, a new Jack.

In simple words: the cinema theaters chains are brutally hit, strongly exposed and they need a constant income to sustain themselves. Basically, they need the people to get out of the house and spend money in their chains everyday.

The major studios and the distributions are less dependent on the constant cash flow. They’re less exposed, they have a tougher skin and they have a different economic model that is not based on the daily collection. They’re more used to investing on the longer term and with different profit margins that often depend more on the results of a few releases, that can sustain all the others, than on the total production.

Postponing an important movie release for a major or for a distribution company does not necessarily represent a loss. Surely it’s delaying proceeds and messing with accounts, but it’s not mathematically sure that it’ll turn out to be a damage. Releasing a movie with certain proceeds prospects (and necessities) and seeing it failing because the current system won’t let it make money, that’s a sure loss. 

The precedent set by Tenet established that the market can’t guarantee, not even remotely, the conditions to sustain the investments made. So, it’s better to tighten the belts, keeping the precious things and postponing the releases. Yes, but in the meanwhile, cinema theaters are dying, right? Not exactly. 

The owners of movie theaters are the ones that are dying. Not the cinema theaters concept itself. 

Contrary, it’s not that absurd to assume that when this pandemic will be over (or when we’ll perceive that it’s over), people will want to go back to live, and have fun and the cinemas are going to be full again. Just like what’s happening in China, where cinemas have reopened and highly anticipated movies for their market are being released.

So is it hard to assume that, in a while, when big chains like AMC will be forced to destroy their facilities and to sell them, New properties will step up to buy those facilities at bargain prices? No, it isn’t. It’s the shock economy’s logic, explained by Naomi Klein, that is described as the “New Orleans Situation”, where Katrina’s arrival was a huge disaster for those who were the weakest economically speaking, but it was an opportunity to profit for the richest.

Basically, major studios and distributions don’t care if the movie theaters are owned by X or Y. If it’s the American-Multi-Cinema or another circuit owned by Amazon, Apple, Google or Alibaba Group, what does it change for the major studios? Very little, unless new companies don’t decide to change the system (and so the earnings distributions). But future shake-ups will be faced when they need to be faced. Now something is sure: releasing a blockbuster into movie theaters means a secure loss. So you just don’t release it. And never mind if Jack ends up at the bottom of the ocean.

L'annuncio si chiuderà tra pochi secondi
L'annuncio si chiuderà tra pochi secondi