Film Distribution Chiefs Talk Pandemic Takeaways: "The Old System Was Creaky"

The Theater ‘Audience Is Not One Size Fits All
Noam Galai/Getty Images; Giles Keyte/Universal Pictures; Film Frame/Marvel Studios

Clockwise from left: New Yorkers passed by AMC’s boarded-up 34th Street Theater in September; F9 is scheduled to bow in June; Black Widow is now set for a May 7 release.

Four top studio executives discuss the past year and the near future, including the slow march to a box office recovery, the shattering of the theatrical window and the streaming tsunami.

Even the most cynical Hollywood insider was stunned in February 2020 when word spread that MGM and Eon — home of the James Bond film franchise — were postponing the release of No Time to Die because of the COVID-19 pandemic. "It was the first big Hollywood movie to be delayed — and then the wheels came off," recalls Erik Lomis, a veteran exec who is president of distribution at United Artists Releasing, a joint venture of MGM and Annapurna that is rolling out the Bond pic in North America in October. By March 20, almost every indoor theater across North America was ordered shut, sparking the biggest box office disruption in Hollywood history. It's been a roller-coaster ride ever since.

Lomis, Paramount domestic distribution president Chris Aronson, Universal domestic distribution president Jim Orr and Elissa Federoff, who heads distribution for Neon — home of 2020 Oscar best picture Parasite — recently sat down to discuss the past year and the near future, including the slow march to a box office recovery, the shattering of the theatrical window and the streaming tsunami.

Now that theaters in New York and L.A. — the two biggest U.S. markets — are reopening, will we see movies continue to be delayed or the start of a return to normal?

ERIK LOMIS We can see the light at the end of the tunnel, but we still have to go through the tunnel. I'm guessing that Marvel's Black Widow on May 7 will be the first really big movie still [releasing]. I think that will be the beginning of the resurgence.

CHRIS ARONSON On the research and polling side, one thing has been constant: The people going to theaters in other parts of the country are overwhelmingly positive [with] the experience. They feel safe, they feel comfortable.

How can studios help get the message out that it's safe to go back?

JIM ORR The best message is putting films in theaters, as we've been doing for a while now. We had relatively great success with Croods, for example. There was a lot of family business that came out. It's very encouraging.

LOMIS Once the big movies start opening, you'll see massive amounts of television spots, and that will let everybody know that theaters are back. Look at the performance of the box office in Asia, Australia — and China, where you have one picture that did $680 million and another that does $780 million side by side, over a four-week span. That tells you how much we're missing it.

Will limited capacity — or 25 percent — in New York and L.A. be an obstacle for big movies launching in the coming weeks?

ARONSON Were you talking to me? I’m sorry, my Zoom froze. Kidding, kidding. (Laughter.)

ELISSA FEDEROFF We actually had some fun with the capacity cap in New York. We opened one of our shortlist contenders for best foreign film at the Angelika [Film Center] on March 5. There were sold-out shows. It was obviously only 50 people.

ARONSON You have to start somewhere. Local jurisdictions are going to be careful in how they reopen. Well, some are. Other states really don't care. You're going to see those capacity limits inch upward in the coming weeks.

Universal delayed Fast & Furious installment F9 again, but by only a month, from May to June. Why?

ORR It is a very important global franchise for us, and having another four weeks, especially in certain markets around the world, gave us a bit more breathing room.

Paramount quickly took F9's old spot and moved up A Quiet Place Part II from September to Memorial Day, which dovetails with exhibitors saying they need new product to reopen.

ARONSON We want exhibition to be healthy. Sometimes you have to take a bold shot, and that is what we did. Our filmmakers are on board, and we know the audience is ready.

FEDEROFF What we've all been missing is having the audience as part of our cinema experience. Genre and horror films are great examples of that. A Quiet Place Part II will make some noise.

For years, studios wanted to release films sooner in homes but were blocked by theater owners. That changed with COVID-19. Universal created a new premium VOD window beginning at 17 days, and Paramount a 30- to 45-day window for Paramount+ tentpoles. Thoughts?

ORR There are folks that absolutely, like myself, want to be in theaters. Then there are folks who didn't want to be in theaters even before the pandemic. We feel particularly good about the model that we've developed and it seems to be doing extraordinarily well. So, away we go.

LOMIS Windows are changed forever. It took a long time and a pandemic to make it happen.

FEDEROFF What exhibitors and studios have started doing is looking at what windowing works for each film. I completely agree with Jim. There are some people who just go to the movies once a month or not at all. The audience is not one size fits all.

ARONSON Over the past five years, wide-release films that grossed $10 million or more and opened in over 2,000 locations earned 98 percent of their box office in 45 days. That's all you need to know. The old system was creaky.

Cinema chains have always insisted that a shorter window will hurt movie attendance. What have you learned in recent months?

ORR Croods was number one in its 12th and 13th weekends even though it had been on PVOD for weeks. There are different customers out there.

Warner Bros. sparked an uproar when it announced it would release its 2021 slate simultaneously on HBO Max and in cinemas. Disney debuted Raya and the Last Dragon day-and-date in theaters and on Disney+. Will you do similarly?

LOMIS We are, first and foremost, a big-screen company. We recognize the value of the small screen and exploit it. We can't properly monetize the big movies, like James Bond, without theatrical leading the way.

ARONSON ViacomCBS just launched Paramount+. Our CEO, Jim Gianopulos, made it very clear that Paramount Pictures believes in the theatrical window. He went to great pains to reinforce that point. That being said, we'd be naive if we didn't recognize that the theatrical distribution and exhibition industry has some pretty strong challenges ahead of it.

LOMIS I think you need to carve it out for each movie. We're probably going to experiment with [a window of] 17 days coming up on some films.

During the pandemic, we've seen Warner Bros. and Sony break with tradition and prevent rivals from seeing box office grosses on Comscore. Will you follow suit?

ORR Over the years, we developed the ability to share these grosses. I think it's absolutely the right practice and the right way to go about it, and that's why I'm continuing to allow our grosses to be seen.

ARONSON There's a level of disingenuousness about it. I have an obligation to our filmmakers and company to assess the health of the marketplace. If we can't see all the numbers from theaters that are open, I'm not capable of doing that.

LOMIS I don't think it's proper. I understood doing so on the first big movie released during the pandemic [Tenet]. I didn't get it after that.

How do you compete with streamers for consumers' attention?

ARONSON Moviegoing attendance from 2010 to 2019 is down over 7 percent. In that same period, ticket prices have gone up over 16 percent. That's not the kind of diagram you want to see. That's just one aspect of this business that needs to be looked at. The tentpoles have always been a part of the theatrical business. But it's all the other films that make up the bulk of attendance. We'd be naive if we didn't recognize that our industry, the theatrical distribution and exhibition industry, has some pretty strong challenges ahead of it. Just like windows are changing, the entire business needs to be turned upside down and has to be reexamined, with the ultimate goal being, how do we get more people going to movies in movie theaters?

ORR I won't name them, but I've seen a couple of films on my gigantic television, but it's just not the same experience, right? It's just literally not the same experience as a theater. It's not even apples and oranges, it's apples and tanks. But exhibition definitely has some challenges, no doubt about it. They're competing with so many other forms of entertainment these days.

ARONSON I think the takeaway is that the price-value ratio, has to be in order.

LOMIS That I would agree with.

Are you worried that smaller mid-range films will disappear from theaters and become the purview of streamers?

FEDEROFF When you have a film, such as Parasite, that is a small gem, there is a gradual ripple effect. Audiences start talking about the movie and buzz starts to generate, unlike the all-you-can-eat buffet of streaming.

LOMIS The streamers go to the film festivals and they overpay so that they make it impossible for film companies to go in and pick up a small gem without paying too much. But I do feel like original content and good stories will always win out.

ARONSON I want to see a marketplace where Neon thrives in the same way Paramount and Universal and United Artists thrive. If things are done in a proper way, they can. Small, medium and big films can all coexist. And Erik Lomis is right: When you have good stories and you execute them well, people will go.

What is your biggest anxiety these days?

ORR It would have to be whether there's a relapse in the number of COVID-19 cases, or the vaccines not working. Things are looking so good at the moment.

LOMIS That's spot-on.

FEDEROFF We all have to be really diligent in doing our part to make this business thrive. Because that's how we're going to get out of that hole, if it does come to pass.

ARONSON There's a lot of economic hurt that needs to be healed. I'm a medium- and long-term looker, and I want to see the health of this business regained and then really take off. How can we convert those people who don't go to the movies? If they're not going, why? What can we do to break down those barriers to convince them to go? That's where I think the opportunity is. We can't be content with being a static industry.

Interview edited for length and clarity.

A version of this story first appeared in the March 18 issue of The Hollywood Reporter magazine. Click here to subscribe.