Just as the global film industry thought it was coming out of the pandemic, omicron may pull them back in.
On Nov. 26, the World Health Organization, led by Tedros Adhanom Ghebreyesus, warned that the risk posed by the new, heavily mutated variant of COVID-19, first discovered in southern Africa, was “very high.” Days later, more than 40 countries, including the United States, the U.K., the European Union and Australia imposed travel restrictions from southern African nations including South Africa, Botswana and Zimbabwe. The variant has since been detected in several nations, including the U.K., Canada, Germany, Hong Kong and Israel.
The news couldn’t come at a worse time for the global film industry, which after two years of shutdowns, cinema closures and box office collapse, had finally begun to recover. “The unfortunate thing about omicron hitting now is that October was the first month where we’re incredibly close to average box office returns pre-pandemic,” says Rob Mitchell, a box office analyst at London-based Gower Street. The strong performance of No Time to Die, Dune and Venom: Let There Be Carnage, together with a resurgent Chinese theatrical market, meant the global box office for October was down just 7 percent from the three-year average for the month from 2017 to 2019.
The fear is that the new round of omicron headlines will spook moviegoers, giving them another reason to stay home. At the moment, Hollywood studios are in a holding pattern, waiting to hear to what degree current vaccines protect against the new variant before making any decisions regarding their release calendars. If omicron proves both virulent and vaccine-resistant, the impact could be felt throughout the industry, but cinemas and the theatrical business are likely to be on the front line.
“Producers have come through the first three COVID waves and know what to do to keep things moving,” one veteran producer notes, pointing to safety protocols implemented at the start of the pandemic that, for the most part, have allowed studios and independents to keep making movies even through this fall’s surge of infections caused by the delta variant.
“Rapid testing is widely available, so production facilities can test everyone every day, making transmission pretty unlikely. I really don’t see a big impact over the near term,” notes Wedbush analyst Michael Pachter. “But if it turns out that omicron is more deadly than thought and we are more defenseless, it will become a problem.”
A bigger, and more immediate, problem, is holiday releases. This year, box office hopes lie on the shoulders of one film: Sony’s Tom Holland starrer Spider-Man: No Way Home, which rolls out mid-December. The tentpole “could come away with the largest opening of the year, [and] consumer demand looks quite good as of right now,” notes MKM Partners analyst Eric Handler. “This film will then be followed by The King’s Man, The Matrix Resurrections and Sing 2, all of which should have decent appeal. Hollywood can’t afford a major disruption at this time given the relatively big budgets these films carry.”
With Sony’s marketing campaign in full swing, there’s no indication yet that the studio plans to shift Spider-Man’s release because of omicron. “I certainly don’t mean to suggest like, ‘Oh, old hat, we’ve got it,’ ” says one top executive at a rival studio. “I’ve got all my fingers and toes crossed that [omicron] doesn’t mean another series of shutdowns.”
But the situation outside the U.S. could force the studios’ hand. In what worryingly resembles conditions this time last year, countries across Europe are imposing new restrictions and lockdowns in an effort to stem this fourth wave of infections (most involving the delta variant).
Austria’s nationwide lockdown began Nov. 22, with cinemas, restaurants and other public venues shuttering. On Nov. 24, the Slovak government declared a state of emergency and nationwide curfews. On Nov. 28, the Netherlands imposed a 5 p.m.-to-5 a.m. curfew for most businesses, including theaters. Germany, Italy, France and Spain are all considering similar measures. A day later, South Korea, which is battling a similar infection surge, said it was shelving plans to further relax COVID-19 restrictions due to rising hospitalization rates and concerns over omicron. Korea lifted restrictions on cinema opening hours at the start of November but theaters there are still battling consumer restraint about returning to public venues. Leading multiplex chains CJ CGV and Lotte Cinema have been running “vaccine pass” theaters for fully vaccinated moviegoers, where customers can sit side-by-side and eat concessions during screenings (otherwise social distancing rules continue to apply, limiting capacity).
“Every studio likely has its own international calculation: How many countries can we lose and still be able to do a theatrical release?” says Mitchell. “Lose Austria and the Netherlands, that’s probably OK. But if you add Germany, France, maybe the U.K., the calculation can change.”
The worst-case scenario would be a replay of fall 2020, when theater closures and declining box office in several territories led studios to postpone or cancel upcoming tentpoles, triggering a negative feedback loop. Mitchell points to MGM’s decision in October 2020 to delay the already-shelved Bond release No Time to Die by another year. The move directly led to exhibitor Cineworld shutting its doors — saying that without such tentpoles the cinema business was “unviable” — and sparked a flurry of other delays to major releases, including Sony’s Ghostbusters: Afterlife and Uncharted, Disney’s Cruella and Universal’s Finch, starring Tom Hanks, the latter eventually landing on streamer Apple TV+.
As it has throughout the pandemic, the Chinese market could play an oversized role in studios’ calculations. The fact that the Keanu Reeves-led Matrix Resurrections and Spider-Man: No Way Home have both been approved for Chinese release could tip the scales in favor of the scheduled rollout, with a staggered bow, or postponement, for smaller territories.
Even if cinemas avoid the worst-case scenario, hopes are dwindling that October’s box office surge will carry through to the end of the year. Gower estimates global box office take, as of Nov. 27, at approximately $18.4 billion, 65 percent above figures at this stage last year but 51 percent below the three-year pre-pandemic average (from 2017 to 2019). Cinema closures in select territories and concerns over further lockdowns have already led Gower to adjust its year-end prognosis downward for worldwide box office from $21.6 billion (its mid-October estimate) to $21 billion. The box office in 2019, before the pandemic? $42.5 billion.
Alex Ritman and Patrick Brzeski contributed reporting.
A version of this story first appeared in the Dec. 1 issue of The Hollywood Reporter magazine. Click here to subscribe.
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