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In 2019, the international box office soared to a record $31.1 billion, contributing to a worldwide haul of $42.5 billion, likewise an all-time high. But the celebration by the global film industry has quickly been replaced by anxiety because of coronavirus, which many public health officials are now calling a global pandemic — one that could keep populations around the world away from public spaces, like multiplexes, for weeks or months.
As of late Monday, the virus, which causes the respiratory illness known as COVID-19, had infected over 90,000 and claimed more than 3,000 lives worldwide. The vast majority of the deaths have been within China, where the virus emerged, but more new cases are now being found outside of the country than within it. South Korea saw its confirmed infections nearly double over the weekend to 4,300.
Movie theaters have been shuttered in China for weeks, but the virus is beginning to heavily impact moviegoing in South Korea, Italy and even Japan, the world’s third-biggest film market. Some analysts believe COVID-19 could already result in a loss of at least $5 billion from diminished box office revenue and impacted production. That number could grow if moviegoing falters in other markets, including the U.S., where there have been 100 confirmed cases and six deaths to date.
In China, the world’s second-largest territory in terms of box office, some 70,000 movie theaters remain closed amid the outbreak, and the ongoing moratorium on releases has cut deeply into revenues of both Hollywood and local studios. Ticket sales in the traditional Chinese New Year holiday period, from Jan. 24 to Feb. 23 this year, were a tiny $4.2 million, compared to $1.76 billion over the same stretch in 2019, figures from consultancy Artisan Gateway show. Analysts estimate that the loss in China through the end of February could come in at $2 billion or more. Business at multiplexes isn’t expected to resume in a significant way for many more weeks, even months.
Over the weekend, box office revenue in South Korea, the world’s fifth-largest market, was down a staggering 80 percent year-over-year. The No. 1 film was Universal and Blumhouse’s horror pic The Invisible Man, which debuted to a relatively tepid $1.1 million. “Theaters are open, but they might as well not be,” one distributor noted to The Hollywood Reporter.
In February, revenue in South Korea slid nearly 70 percent. According to KOBIS, the country’s national box office service, ticket sales for last month totaled 62 billion won ($52 million) from 7.3 million admissions, compared to 189 billion won ($158 million) from 22.3 million admissions over the same period last year.
“The situation now is much worse than what we’ve seen during the outbreak of [Middle East respiratory syndrome coronavirus] MERS in 2015,” said an official at the Korea Film Commission. “The audience dropped more than 40 percent then, but there was no such thing as theater closures and the market revived after about a month. That’s not going to be the case with coronavirus. It’s very unusual to see a daily admission fall below 100,000. But that is happening now, and the outlook is unpredictable.”
CGV, South Korea’s largest theater chain, has shut down all nine of its venues in the southern city of Daegu, the country’s fourth-largest urban center, where nearly two-thirds of the confirmed infections have been reported. For theaters outside of Daegu, CGV has cut as many as half of its screenings. Other major exhibition players, such as Lotte Cinema and Megabox, are also cutting back on screenings and reducing staffing to minimize person-to-person contact. CGV also said it is checking the temperatures of all on-site staff every morning.
“The atmosphere of fear is palpable,” said an official at CGV. “The situation is similar to what we’ve seen during the spread of swine flu in 2009, when there were 80,000 infected cases in Korea.”
With cinemas closing or reducing screenings, many local film releases have been rescheduled or delayed indefinitely in Korea. It was announced on Monday that a black-and-white version of Bong Joon Ho’s Oscar-winning Parasite, which was scheduled to be released nationwide on Wednesday, would be postponed until the coronavirus crisis calms. A spokesperson at CJ Entertainment, the film’s distributor, told THR that all employees at CJ have been ordered to work from home through at least Friday. With another 476 coronavirus cases reported on Monday, bringing the country’s total up to 4,212, cinemas in Korea are expected to be deserted for weeks to come.
In Italy, roughly half of the country’s movie theaters are believed to be shut down — all in the wealthy northern part of the country — as the government imposes tight restrictions to curb the spread of the virus after 1,694 confirmed infections and 34 deaths were reported there.
Italian box office has dropped in response. Revenue fell 44 percent in the first weekend following the closures. Total receipts this past weekend were down 76 percent compared to a year prior. Leading indie exhibitor Vue International noted it has closed 17 sites in northern Italy on the instructions of the Italian authorities. “The safety of our customers and staff is of utmost importance,” Vue said in a statement to THR.
“The consequences of the forced closings and the fear that has spread among the public are dramatic,” said Francesco Rutelli, president of ANICA, Italy’s Association of Cinema, Audiovisual and Multimedia Industries, who noted that Italy had previously been enjoying a box office boom. Receipts in 2019 were up 14 percent and this year got off to a banner start on the strength of local hits Tolo Tolo and Gli anni più belli.
“Before the outbreak of this crisis, cinema was in an excellent condition,” Rutelli said, noting that Italy’s January box office was up 22 percent before the virus outbreak.
While Italy may be the first European hotspot for COVID-19, cases are multiplying across Europe — from Italian neighbors France, Germany and Switzerland to as far north as Denmark, where an executive from public broadcaster TV2 tested positive for the virus after returning from a skiing holiday in Northern Italy.
In other Asian countries, like Japan, where infections have crept up — by Monday the country had just over 275 confirmed coronavirus cases and six deaths — fears are just beginning to impact theater attendance. Official data for the most recent weekend has not yet been released, but many local analysts are anticipating a slide of around 10 to 15 percent.
Japanese Prime Minister Shinzo Abe sent shockwaves through the country last Thursday by abruptly closing all elementary, middle and high schools until the start of April to stem the spread of the virus. At a virus task force meeting last Wednesday, he called on event organizers to “cancel, postpone or hold sports and cultural events nationwide on a smaller scale than planned for the next two weeks.”
Japanese studio, distributor and theater operator Shochiku told THR that it was currently considering whether to go ahead with various promotional events for films in light of the government advisory. Late last week the company began offering refunds to cinemagoers who had purchased advanced tickets and no longer wanted to attend. Toho, operator of the nation’s largest chain, also made refunds available to customers last Friday. The local studio giant also pulled its biggest upcoming release, anime franchise installment Doraemon the Movie: Nobita’s New Dinosaur. The film was withdrawn from its March 6 release slot, with Toho saying a new date would be set once there was greater clarity around the public health situation. Kadokawa’s Fukushima 50, an action drama about Japan’s 2011 nuclear meltdown starring Ken Watanabe, also had its March 5 premiere canceled.
Elsewhere, audiences in the Middle East are staying away from cinemas in droves, following multiple confirmed cases of COVID-19. Iran, with 245 official cases and 26 deaths, has posted the highest death toll from the virus outside China, but the impact is being felt across the Gulf. In Kuwait (43 confirmed cases), sources tell THR that cinema occupancy rates have dropped to below 10 percent. In the United Arab Emirates (19 reported cases), people are keeping away from malls, home to virtually all of the country’s multiplexes. Over the border in Saudi Arabia, while no cases have yet been reported, the country has taken the unprecedented precautionary step of temporarily banning pilgrims from entering the country five months before the annual Hajj pilgrimage, which sees millions of worshippers flock from all corners of the world to Mecca and Medina.
The U.K. has seen 39 confirmed cases, so precautions haven’t yet reached the same levels as other territories and there’s no indication yet of cinemas closing or production halting. But as one of the world’s most vibrant hubs for film and TV production, any impact from the coronavirus would have serious repercussions for the industry. One producer says the epidemic is the talk of the British industry, with many expecting it to hit soon and hit hard. “It’s not a matter of if, but when,” he says.
As COVID-19 continues its march across the globe, the outbreak is prompting Hollywood to retool its efforts to launch major movies and shows. Disney’s late March tentpole Mulan, a $200 million live-action pic with an all-Asian cast, and MGM/Universal’s early April James Bond film, No Time to Die, have postponed their Chinese premieres. Disney and Pixar have also pushed back Onward‘s release date in Korea to April and Disney Korea cancelled all of the film’s local press and industry screenings (Onward is set to begin hitting theaters in other parts of the world later this week). “We will select and announce a new release date after taking stock of the situation surrounding the coronavirus,” Disney said in a statement.
In Italy, all major U.S. debuts planned for this past weekend were pulled, including Invisible Man. Local releases of Onward, A Beautiful Day in the Neighborhood, Charlie’s Angels and The Grudge, among others, are still uncertain.
On Monday, a group of fans on the MI6-HQ website, the biggest Bond fan blog, called on No Time to Die producer Eon and distributors MGM and Universal to push back the release of the film until this summer, citing concerns about the coronavirus. “It’s just a movie. The health and well-being of fans around the world, and their families, is more important,” they wrote. “We have all waited over four years for this film. Another few months will not damage the quality of the film and only help the box office for [No Time to Die star] Daniel Craig’s final hurrah.”
There is little the major studios can do regarding China, since they have no control over when theaters will reopen or when their films will be rescheduled for release (Beijing’s film authorities have always kept total control over when and how all foreign movies are distributed in the country, an issue Hollywood regularly protests in free trade discussions).
Last Wednesday, China’s Film Administration announced guidelines for the eventual reopening of cinemas, but no date has been set to implement them. The requirements outlined also appear onerous for both patrons and operators. Cinemas will be required to record the names and addresses of all moviegoers, check their temperatures, require the wearing of masks, make sure that there is one empty seat between patrons in every direction and sanitize public spaces regularly.
While China’s theaters stay dark, the backlog of unreleased titles — already over a dozen Hollywood and Chinese tentpoles — continues to grow. Once Chinese theaters finally reopen and the rescheduling of release dates begins, regulators will face the daunting task of trying to fit too many big titles in too few desirable slots. Hollywood films awaiting word include Doolittle, Sonic the Hedgehog, JoJo Rabbit, Marriage Story, 1917 and Little Women.
Major May releases that could potentially be impacted include Disney/Marvel’s Black Widow (May 1) and Universal’s F9, another franchise that does major business in China (the last installment, The Fate of the Furious, earned $392.8 million in the territory, by far its best performance worldwide).
Imax CEO Richard Gelfond, speaking to investors on Feb. 19, raised fears that studio titles that don’t get a day-and-date release in China simultaneous with their U.S. theatrical rollouts could be heavily pirated. But the exec was confident that when theaters in China reopen, including Imax’s 702 screens in the country, “the business will rebound.”
No studios were willing to go on the record about their response to the crisis, citing the sensitivity and continued uncertainty surrounding the issue.
“Nobody knows [what’s going to happen]. I think things could get really tough,” said one executive. A spokesperson for the Motion Picture Association, which represents the major studios globally, would only say they were “closely monitoring reports from public health officials about the coronavirus and protective measures to limit its impact” and would continuing taking “the necessary precautions to ensure their health and safety” of their global customers and employees.
Most of the majors, however, have begun assembling advisory teams with members of their production, marketing, finance and human resources staffs to assess the potential impact of the disease. Companies are asking employees to delay work trips to COVID-19 hotspots including China, Japan, Italy and South Korea, and they are scrapping promotional campaigns for upcoming titles.
Renee Zellweger was due to be in Japan in February to promote her Oscar-winning performance as Judy Garland in Judy, which is set to open Friday there — but her visit was cancelled and she took interviews from local media via Skype. Saoirse Ronan’s promotional visit to Japan for Little Women, slated to bow March 27, has also reportedly been nixed due to concerns about the virus. The U.S. State Department increased the alert for traveling to Japan to level 2 on Feb. 22, advising “increased caution” due to the spread of the virus “in Japanese communities via unknown infection routes.”
Other parts of the entertainment business have also been hit, with Green Day, K-pop superstars BTS and Bob Dylan all postponing or cancelling scheduled tours in Asia. Even in Los Angeles, the Korea Times Music Festival announced that its concert scheduled for April 25 at the Hollywood Bowl “has provisionally been postponed due to the increasing uncertainty threat of coronavirus.”
Production on a handful of big titles has also been impacted. Tom Cruise’s upcoming Mission: Impossible installment stopped production in Venice following the coronavirus outbreak in Italy. “We are altering the production plan for our three-week shoot in Venice, the scheduled first leg of an extensive production for Mission: Impossible 7,” a spokesperson for Paramount told THR in a statement. “We will continue to monitor this situation, and work alongside health and government officials as it evolves.”
Netflix’s $160 million Dwayne Johnson actioner Red Notice, which had been scheduled to move to Italy in the coming weeks, may now relocate, though the project, which also stars Ryan Reynolds and Gal Gadot, is not expected to face any delays. On Friday, CBS confirmed it had temporarily suspended filming on the new season of the global competition series The Amazing Race. The network had filmed three episodes of the show’s 33rd season.
On Saturday, Japan’s Tokyo Disney Resort closed its doors and will remain shut until at least March 15, following fellow magic kingdoms in Shanghai and Hong Kong, which have been shuttered since late January due to the ongoing epidemic. The Walt Disney Co. earlier warned that profits from its parks in China could drop by $280 million in the current quarter. Universal Studios Japan in Osaka also shut down on Friday.
Organizers of the inaugural Red Sea Film Festival confirmed to THR on Thursday that the event would go ahead as planned. Saudi Arabia’s first major film event since its historic decision to lift a 35-year-ban on cinemas in 2017, the Red Sea Festival is set to run March 12-21 in Jeddah and features the likes of Spike Lee and Oliver Stone among its guests.
The major studios, along with the stars of their upcoming movies, are still expected to attend CinemaCon in Las Vegas at the end of March, though Chinese companies have cancelled on account of the travel ban.
On the TV side, there will be few Chinese buyers or delegates able to make MIPTV, due to run March 30-April 2, but, organizers Reed Midem said they do not yet have any plans to cancel.
“MIPTV 2020 will take place as scheduled. The health and safety of our exhibitors, delegates and staff is our number one priority,” said spokesman Mike Williams. “We are closely monitoring the situation with relevant authorities and will keep all MIPTV-goers updated on a regular basis. … We look forward to welcoming customers who are not impacted by travel restrictions to our events as usual.”
The situation, however, could change at any time. On Friday, Nice mayor Christian Estrosi confirmed a woman in Cannes had tested positive for COVID-19, the first case in the region. Attendees might also be spooked by MIPTV’s plans, first unveiled last year, to confine all events for the 2020 market to the close quarters of the Palais building. The move, sparked by dwindling attendance at MIPTV over the past few years, could be a cause for concern if the spread of the virus in Europe is not quickly contained.
The Cannes Film Festival on Friday said that it “continues to prepare” for this year’s event, which is set to run May 12-23. “The Festival de Cannes is monitoring carefully the developments and the latest guidelines provided by the local, national and international authorities regarding the coronavirus and is in direct link with the Alpes-Maritimes’ administrative office,” organizers said in a statement. “As of today, it is still premature to express assumptions on an event scheduled in two months and a half.”
Cannes is set to unveil its official selection of films in mid-April.
New COVID-19 infections in China have begun to slow and there is evidence that the country is inching towards containment of the disease. And, despite new U.S. cases, no one is yet predicting theater closures or a downturn in attendance in North America. AMC Theaters CEO Adam Aron on Thursday told analysts he expected “minimal” economic impact from the outbreak. “Our theaters, which are predominantly in the United States and northern Europe, appear to have felt little or no pain,” the exec noted. “If the coronavirus were to hit the United States in a huge way, that would be a big problem for us. But what’s happened [so far] is not.”
Even in the best-case scenario, the economic impact of the coronavirus, and the fear it generates among audiences, will be immense. “Motion pictures and most content does well in good economic times, better in bad economic times. However, force majeure trumps the aforementioned. If people start avoiding mass gatherings, moviegoing will be impacted, as well as production,” said one source. “The impact will be significantly noticeable internationally and increase. The U.S. situation could change quickly.”
Ariston Anderson, Soomee Park, Gavin Blair, Alex Ritman, Georg Szalai and Etan Vlessing contributed to this report.
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