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The coronavirus outbreak is hitting the entertainment industry hard.
China and Italy’s theaters are closed, French cinemas are only open at 50% capacity (every other row must be empty) and South Korea has seen its lowest box office tally in years.
And more countries could be next as the pandemic spreads and large gatherings become taboo.
Already analysts have predicted that the global film industry is facing a $5 billion loss because of diminished box office revenue and the impact of restrictions on production, according to The Hollywood Reporter. That number could grow even more if more countries add countermeasures that force people to remain home or order public gathering places, like theaters, to shutter.
The financial toll that closures of theaters and the postponement of movies will have on the film industry is not one that analysts believe will be easily made up in the calendar year.
“I think it’s going to be hit in the way that cruise lines or out-of-home amusements are hit,” Tom Nunan, a lecturer at the UCLA School of Theater, Film and Television, said. “I don’t think it is something that is easily replaced.”
So far, two Hollywood films — MGM and Universal’s “No Time to Die” and Sony Pictures’ “Peter Rabbit 2: The Runaway” — have shifted domestic and global box office releases, but there are fears that more will follow. Additionally, Paramount Pictures halted production of ‘Mission: Impossible VII’ in Italy and Disney has shutdown “The Falcon and the Winter Soldier” TV show shoot in Prague. Those shutdowns could threaten the timing of future releases.
Experts have said they expect studios to keep North American release dates for films, but postpone releases in countries that have closed their movie theaters or are facing steep attendance declines. But the situation is changing rapidly.
Around 44% of U.S. adults said they would oppose the temporary shutdown of movie theaters, but around 38% said they would support closures, according to a report from Morning Consult and The Hollywood Reporter. The survey of 2,200 U.S. adults was conducted from March 5-7.
International ticket sales are also a key part of the overall success of the Hollywood film industry, often accounting for to 70% or more of a studio’s annual box office haul. For example, the highest grossing movie of last year, and of all time, “Avengers: Endgame” garnered nearly 70% of its $2.8 billion in sales from international regions. Domestically, the film nabbed $858.3 million. China brought in the second-most in ticket sales, with $614.3 million. The U.K. accounted for $114 million and South Korea for $105 million, according to data from Comscore.
While there have been no widespread closures of American cinemas — one Bay Area theater has voluntarily closed — the closure of Italian and Chinese cinemas is worrying, especially as the number of cases in the U.S. rises. Confirmed COVID-19 cases recently topped 1,000, with many concentrated in hotspots within Washington state, California and New York.
Even if public officials don’t order theaters to close, ticket sales may suffer. In South Korea the country’s box office tally in January was the lowest in years and February likely saw declines of 30% to 40%, according to a report from The Hollywood Reporter.
Here are some of the upcoming films that could feel an impact.
Fear of piracy if ‘Mulan’ release is staggered
Disney’s “Mulan” has long been expected to perform tremendously well in China, as it is set in the country and features a Chinese folk hero, but if theater closures continue, it won’t be able to be released in the country right away.
“Disney’s bet on ‘Mulan,’ which was supposed to prove the case of how important Asian countries to American studios, that entire theory goes out of window in the face of a pandemic,” Nunan said.
For now, Disney doesn’t have plans to move Mulan’s March 27 release date.
Liu Yifei stars as Hua Mulan in Disney’s “Mulan.”
In the U.S., the film industry hasn’t yet seen any major disruption from the coronavirus. People are still venturing out to theaters to see new movies and to check out films that opened in February.
“Invisible Man,” saw less than a 50% drop off in ticket sales during its second weekend, a huge feat for a horror movie. Typically, horror films will see a sharp decline in sales from the first week to the second. The film currently holds a 91% “Fresh” Rotten Tomato score and has been praised by critics and audiences.
The biggest concern for big releases like “Mulan” isn’t the North American box office, it’s what happens in the regions where quarantines prevent people from going out to the movies. Hollywood has made simultaneous global releases a more common strategy to prevent piracy. In the past, countries pirating films that hadn’t been released in the area put a huge dent in future ticket sales.
“The threat of piracy becomes much more profound in the face of a pandemic like this because people will want to watch things at home,” Nunan said. “Piracy will be much more appealing.”
Previous live-action remakes of classic Disney films have garnered between 60% and 69% of their total box office outside of North America, according to data from Comscore.
And “Mulan” could have an even higher percentage. Chinese moviegoers love movies that are set in China.
In 2014, “Transformers: Age of Extinction” hauled in more in China — $301 million — than it did in North America — $245.4 million. The film was set predominantly in Hong Kong.
Similarly, the 2016 movie “The Great Wall,” a film starring Matt Damon about a group of European mercenaries who help defend the Great Wall of China against monstrous creatures, nabbed $170 million in China, but only $45.5 million domestically.
‘Black Widow’ is next blockbuster release
While there are several new movie releases in April, there isn’t another blockbuster feature until “Black Widow” arrives May 1. The Marvel film faces some risk at the box office if the coronavirus outbreak doesn’t begin to stem in the spring.
While the CDC hoped in February that the outbreak would be seasonal like the flu and subside by summer, the World Health Organization is less optimistic.
“We have to assume that the virus will continue to have the capacity to spread,” Dr. Mike Ryan, executive director of WHO’s health emergencies program, said at the agency’s headquarters in Geneva last Friday. “It’s a false hope to say, yes, that it will disappear like the flu.”
That means that summer blockbusters could potentially be at risk.
Scarlett Johansson stars as Natasha Romanoff, AKA Black Widow, in Marvel’s “Black Widow.”
Disney | Marvel
“Black Widow” kicks off the summer and gives fans a tastes of what Natasha Rominoff, aka Black Widow, was up to between the events of “Captain America: Civil War” and “Avengers: Infinity War.”
Trailers show Natasha reuniting with her family and being hunted by a trained killer called Taskmaster, who can mimic any movement that he’s seen, making him a fearsome foe.
Marvel movies have long been considered “event cinema,” or must-see movies for the big screen. They are a global phenomenon and the majority of the most recent films — there are nearly two dozen that have been made since 2008 — collected between 62% and 70% of their total box office internationally.
Only “Black Panther” bucked that trend, taking in only 48% of its $1.34 billion global box office outside of North America.
‘F9’ relies heavily on international audiences
Due out May 22, Universal’s “F9” could be at an even greater risk.
The ninth film in the “Fast & Furious” franchise, “F9” is about Dominic Toretto and his crew going up against Toretto’s brother, a skilled assassin and high-performance driver who is out for revenge.
More so than most franchises, “Fast & Furious” films have become increasingly reliant on international success.
While the first two films in the series only received 30% and 46% of their respective box offices internationally, the more recent movies — “Furious 7” and “The Fate of the Furious” — took in 76% and 82% of their box offices from foreign countries.
Only $226 million of the $1.23 billion “The Fate of the Furious” made in 2017 came from North America.
Other films at risk
“The wild card right now is how does the virus react to spring and summer months?” Nunan said. “Does it abate in warm weather?”
If the coronavirus outbreak still isn’t under control by June, Warner Bros.’ “Wonder Woman 1984” could face headwinds. Although, of all the DC Extended Universe films, “Wonder Woman,” which came out in 2017, was least reliant on international ticket sales.
“Wonder Woman” tallied 49% of its total box office from outside North America. For comparison, 2018’s “Aquaman” took in 70.8% of its box office from international regions.
Although not due into theaters until July, Universal’s “Minions: The Rise of Gru” is another feature that could be heavily reliant on international ticket sales and take a hit if the outbreak isn’t brought under control by summer.
Some 71% of 2015’s “Minions” $1.16 billion global haul came from international ticket sales and 2017’s “Despicable Me 3” relied on foreign markets for 74% of its $1.03 billion global box office.
“The hope around the world is that [COVID-19] is just something that is particularly intense right now, but that it will abate,” Nunan said.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. It owns Rotten Tomatoes. Universal is the distributor of “F9” and “Minions: Rise of Gru” and licenses the “Transformers” IP for its theme parks.