
Published Mar. 10, 2022
Theatre’s have battled back from the industry horrors of 2020-21, which turned our greatest asset, social interaction, quickly into our biggest liability and bringing the global industry to its knees. The industry still has a way to go, but all analysis points to theatrical exhibition finally getting back on track towards the end of 2022.
I believe the exhibition side will be quite different post-Covid, which I think is a good thing. Topping my list of thoughts are four (4) areas of meaningful change…
First, there will be zero consumer tolerance for operational complacency or poor execution. Exhibitors need to bring their "A-game" every day.
Second, if guests are going to leave their comfy couch to watch a movie in a theatre, they will want that experience to be something special. Further, I believe consumers are willing to pay for it...and exhibitors offering premium experiences in sight & sound, like IMAX and D-Box, and enhanced food & beverage choices, such as in-theatre dining, are much better positioned for more rapid recovery and growth.
Third, in 1997, the average theatrical window was 172 days, which admittedly was super for exhibition, but given the average length of run in a megaplex was around 35-days and over 95% of the films total gross was generated in 42-days, was excessive.

While studios are becoming more and more aggressive with their streaming strategies, and the “window” between theatrical exhibition and release onto other platforms is shrinking, I believe after 15-years of bickering, we may have finally reached a state of economic equilibrium and the forces impacting both sides appear in balance…détente…at least for now!
As we look to 2022…
Disney has announced a minimum 45-day exclusive theatrical window
Paramount has announced a 30 to 45-day exclusive theatrical window
Sony has not announced a specific policy but has been a strong advocate and pretty good about generally following a minimum 45-day exclusive theatrical window
Universal looks to stay the course with a hybrid strategy, committing to…(a) SVOD (Streaming Video on Demand, i.e., Peacock) holding to a minimum 45-day exclusive window and (b) PVOD (Premium Video on Demand): (1) films with an opening weekend gross less than $50M may move to PVOD 17-days after their theatrical release, (2) while films with an opening weekend greater than $50M may move to PVOD after 30-days
Warner Bros., after making the decision to stream all 2021 movies on HBO Max on the same day they hit theaters, has committed to a minimum 45-day exclusive theatrical window
Content is the intellectual property of the studios, and we need to keep in mind they will ultimately act in their own self-interest, which is to maximize shareholder value…which, as I believe the studios discovered through their day-and-date COVID-related experimentations in 2020-21, can only be achieved by exhibition playing a meaningful role in the release of their content.
Fourth, (and most importantly) we know “Content Is King”, so theatres need more content! Exhibition has done their part in grinding grosses over the past six (6) months. When compared to the same period in 2019-20:
1. the average title opened on 2% more screens
2. generating an average opening weekend gross only 1% less
3. but went on to generate a total gross that was 11% less than 2019-20
4. there were 20% fewer titles released by Major Distributors
5. resulting in cumulative opening weekends generating 20% less in total revenue
6. and cumulative revenues 28% less than 2019-20

The bottom line, while titles over the past 6 months have opened relatively strong, stamina post opening weekend has been impacted, likely by a combination of title quality, collapsed theatrical window (day-and-date streaming) and spikes in COVID cases around the holidays.
And likely MORE IMPACTFUL then the above, I believe the lack in quantity of available titles (due to Distribution holding back release dates or COVID related production delays) has significantly delayed a more robust recovery for theatrical exhibition. Our guests are definitely ready to return, but we need to increase the number of available titles.
Clawing our way back to 2019 levels is kind of a hallow victory…the BIG question for both exhibition AND distribution is how do we collectively grow it from there!
So, what do the next few months look like?

For starters, releases during the first 3 months are WAY UP versus 2021 (+71%), but with 37% fewer titles from major distributors, we are not off to a great start versus 2019.
And, while the quality of titles in April and May looks to be excellent (Morbius, Sonic the Hedgehog 2, Fantastic Beasts, Father Stu, Dr. Strange, Downton Abbey, Top Gun), there are 45% fewer than in 2019…not good.
The number of titles slated for April and May are still very much subject to change, and will likely increase, but for full recovery to take place, we most definitely need Disney (63% fewer titles) and Warner Bros (57% fewer titles) off the sidelines and back into the game.
Finally, clawing our way back to 2019 levels is kind of a hallow victory…the BIG question for both exhibition AND distribution is how do we collectively grow it from there!
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