Cinemark CEO Mark Zoradi said Hollywood studios “are anxious to get back in this business once safety is no longer a concern,” shrugging off Universal/Dreamworks Animation’s Trolls World Tour going directly to PVOD as a blip in the road.
It was a highly successful one for Universal, however, with Trolls bringing in between $40M-$50M, according to industry sources, sparking unease at the chipping away of already narrowed theatrical windows post-pandemic.
But Zoradi, in a wide-ranging conversation about the nation’s third largest chain and exhibition in general on a conference call Wednesday, noted that Trolls “was the only real change” with all other big ticket films having postponed or delayed their releases dates until theater reopen. “Universal came out very clearly and made the decision when we were closing our theaters. They felt like they spent so much in marketing money and putting commitments like McDonald’s, that they had no choice. We don’t see any systemic change from all major studios when it comes to their major motion pictures because theatrical is so important to them,” he told Wall Streeters eager for details on the company’s financial health and plans.
Movie theaters represent about 54% of a studio’s revenue, he said.
The issues is so top of mind that NATO released a study this week it commissioned from EY it said showed that more time in theaters for a film boosted revenue not only from theatrical revenue but from home entertainment as well. The study, ‘The statistical relationship between home release window length and movie sales,” crunched numbers from 2012 to 2017 and showed that a one percentage point higher ratio of the lengths of home release window to the theatrical run is associated with $56,000 higher home sales and a $116,000 boost in box office revenue – or $175,000 in total incremental sales. Based on a “correlation coefficient,” EY said, home sales benefit proportionally even more than theatrical when a movie runs longer in theaters.
Zoradi, the former president of Walt Disney Pictures, said he working extremely closely with the studios to manage the crisis and, for instance, expects to be showing high-profile library content as early as the last week in June for a staggered opening of theaters with limited hours gearing up for a stronger second half and a busy 2021 slate.
Asked if he thinks the release schedule next year is too much of a good thing, with perhaps an over-crowded release schedule of postponed films, he said no. “I don’t think we have that problem. … What is great is the way the system works is that the studios are masters at looking at the calendar and lineup and seeing where they want to go in relation to the competition.” He noted that some of the movies for 2021 have had delays in production and will get pushed into 2022.”
Zoradi said he’s hopeful for a return to normal. He was at Disney during the SARS epidemic in 2003 and said it took a relatively short amount of time for people to bounce back and return to theaters. COVID-19 is more infections and global than SARS, he acknowledged, but wherever “SARS was, theater going improved and came back rather quickly.”