Analysis: First 2 weeks drive top movie revenues

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In 2019, the top-10 US movies earned 69.2 per cent of their total box office gross revenue in the first two weeks of release, according to the latest report – Movie Windows – Adapting for the Future – from consultancy firm Omdia. This compares to 63.1 per cent for the films ranked between 41 and 50, and 40.9 per cent for the films between 91 and 100.

For cinema exhibitors, the theatrical window is the lynchpin of the cinema exhibition business and they go to great lengths to ensure it stays in place. After two decades protecting the theatrical window, however, Covid-19-provoked closures and uncertainty has weakened the exhibitor’s position.

This pressure on the theatrical window has led to changes: not so much accelerated but rather experimental with a view of longer-term change for those that work. Universal and AMC made a deal to collapse the window for some of the studio’s mid-level releases, with the exhibitor cut into grosses from the accompanying PVoD releases. Cinemark and Cineplex have now joined AMC in making a PVoD deal with Universal. PVoD is almost only playing out in North America and Europe.

In Europe and the US, the trend is for the window between theatrical and online media to shorten over time. This is sometimes organic and other times by agreement. The key for theatrical is how short this window can go without impacting on their business and which titles are more heavily affected.

“In Europe and the US, the trend is for the window between theatrical and online media to shorten over time,” advises Maria Rua Aguete, Senior Director, Media and Entertainment at Omdia. “This is sometimes organic and other times by agreement. The key for theatrical is how short this window can go without impacting on their business and which titles are more heavily affected.”

“Covid-19 has created a unique opportunity for studios to experiment with other distribution models such as PVoD, or and to a lesser degree straight-to-streaming, without equivalent relationship damages as before. Without engagement, cinemas risk being left behind as the industry debate goes on around their existential crisis. Not all windowing experiments will be successful, but the current pandemic has accelerated the ability to try them,” notes Rua Aguete.

Omdia expects that many of the decisions made during 2020 such as WarnerMedia’s announcement of simultaneous releases in theatres and on HBO Max could be revised in 2021.


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