Cinemas across Latin America have remained closed for most of 2020, due to COVID-19 restrictions, and the industry is forecasting attendance to remain low for the foreseeable future.
To add salt to these wounds, media conglomerates are turning to streaming platforms to distribute the latest releases. For example, Mulan was sold through Disney+ and Warner Bros. will launch Wonder Woman simultaneously in theatres and on HBO Max. The share prices of AMC Entertainment and Cinemark fell 16% and 22% respectively on this news.
HBO Max has not yet launched in Latin America but is scheduled to in 2021.
An executive of Fandango Latam has further concerns, “The deal between AMC and Universal to give theatres just a 17-day window (it is currently 90 days) to show films before they are launched online has generated a lot of uncertainty.”
“The deal between AMC and Universal … has generated a lot of uncertainty.”
Executive, Fandango Latam
Looking past-COVID the executive speculates, “The cinema industry will have to adapt, it won’t disappear in Latin America because it is one of the primary sources of entertainment. Competition from streaming will make it difficult but the cinemas will have to work on commercial agreements with the studios to protect themselves.”
Christopher Nolan, the British-America film director, has publicly lambasted the behaviour of the media studios, “What we have now in our business is more of using the pandemic as an excuse to fight for a short-term advantage. And it is really unfortunate. It is not the way to do business and it is not the best for the health of our industry.”
“What we have now in our business is more of using the pandemic as an excuse to fight for a short-term advantage. And it is really unfortunate.
Christopher Nolan, Director
There is some light at the end of the tunnel, a US-based hedge fund analyst noted, “Audiences in China, where the post-COVID recovery is growing, are going back to the cinemas. Studios are celebrating this as it’s better for their revenue. Releasing simultaneously in theatres and on HBO Max is an experiment, it is supposed to be temporary, we might see it being reversed if cinemas can recover in 2021.”
The Fandango Latam executive shares his optimism but in the US private equity investors are circling what they perceive to be “over-indebted companies in an over-supplied market”.