Theatres, streaming may co-exist in future: Hajra Arbab

 By Abdul Qadir Qureshi 

(Pakistan News & Features Services)

Movies remain a massive value creator. Global box office revenues were reported to have totaled $42 billion in 2019, an all-time high, contributing almost one-third of the estimated $136 billion in the value of worldwide movie production and distribution. Hollywood supports more than two million jobs and 400,000 American businesses; British film and TV are worth around £60 million each day to the UK economy. 

The coronavirus pandemic has upended the content pipeline, halting film production and closing cinemas. Film production has restarted in some countries and the industry has adopted remote-work protocols where possible. But the virus creates uncertainty, and the biggest short-term risk seems to be consumers’ dwindling confidence in physical venues. 

Bibi Hajra Arbab, currently working at one of the largest media companies of the world, has completed her masters from San Francisco State University and then moved to Los Angeles. She has worked at various media production and distribution companies over there and the list includes IMAX Corporation, Lionsgate Entertainment, STX Entertainment, and The Walt Disney Company. For a short time, she was also associated Paramount Pictures and NBC Universal. In a recent interview with PNFS, she shared her views and thoughts about current issues of the industry. Excerpts: 

Q: How much did the COVID-19 impact the movie industry? 

A: The industry is on the cusp of the biggest shift in the history of Hollywood. The movie production was indeed hit hard by COVID-19. Theaters and movie sets were shut down for months, causing the US box office to lose $5 billion in 2020. Only 338 movies were released in theaters in 2020, a 66% decline from 2019. 

The number of movies that began production in 2020 declined significantly, taking a 45% drop to 447. The delay in the current slate of movies also puts future movies up in the air. Many studios are focused on managing the logistics of their movies that are currently in production or pre-production instead of actively hunting for new films. That could lead to a sparse pipeline in coming years.  

Q: Is Hollywood completely looking into the streaming model? 

A: With theatres closed all over the world, many movies moved to streaming. Universal Pictures made a deal with one of the theater chains to shrink the time its movies play exclusively in theaters from 90 days to 17. Warner Brothers started releasing its new movies on HBO Max the same day they go into theaters, a move that will extend through at least the end of 2021. 

Disney followed a similar model by releasing some new movies on streaming for an additional cost, and others included in the basic subscription price. 

Q: Will theatres survive in future? 

A: The customers indeed love having access to new releases from the comfort of their homes. One studio released its latest movie in theaters and for premier customers and made more than $20 million on each channel in the first weekend alone which means that this model is working for them. 

Theatres and streaming are battling for customers but many experts believe the two can co-exist. Although movies will likely be released simultaneously or much closer together on streaming and in theaters than they have in the past, watching a movie at home versus watching it in a theater offer wildly different experiences. There are pros and cons to both, but customers will likely continue to want to watch new releases both in the luxury of a theater and in the comfort of their own home. 

Q: How people make their movies and how they expect the movies to be seen? 

A: The flip side is the majority of movies, whether we like it or not, are being consumed at home and it’s not realistic to assume that we’re not going to change, that this part of the business isn’t going to change, like all parts of the business are going to change. 

Q: How do you see future of the film business? 

A: Going forward, what movies look like and how they are consumed could be very different. Larger studios tend to have the resources to fund and market their movies and can take bigger financial risks but independent studios and filmmakers now have the added struggle of finding more funding. At least for the next few years, there will likely be fewer independent films. In the future, more movie studios will expand their animated offerings. 

Q: What kinds of movies seem more likely to succeed in future? 

A: Animated movies for families and adults tend to be easier to produce virtually with animators working from different locations, reducing the need for safety measures. First, the business model is moving from third-party distribution and single-ticket sales towards owned distribution and recurring revenue. This is seen by investments in SVOD services, where a single movie or TV series is rarely a profit driver; rather, recurring subscriptions (and, in some cases, advertising revenue) produce value. 

As a result, media companies no longer optimize releases for fixed schedules, primetime TV slots or popular holiday weekends. Instead, the goal is increased engagement, thereby improving user retention and data on content popularity. The corollary is an expansion of demand for proprietary content. We still have to see how things unfold but one thing I can say for sure that the demand in content is higher than usual, which is a good sign for the Pakistani content creators as well.