Hollywood has been attempting to recover from the effects of the global shutdown resulting from the COVID-19 pandemic in the recent months of 2022. This shutdown led to the closing of thousands of theaters, halted the production of hundreds of movies, and caused a decline in total box office earnings to the lowest level in its history. Equally damaging was the halt in work for film shooting and production crews.
As production restarted and a significant number of theaters reopened, optimism returned to the cinema industry, not just in Hollywood but worldwide. The use of artificial intelligence in creative content and technical production processes led to disputes, resulting in a new industry catastrophe—a strike lasting approximately 118 days. During this period, production halted, numerous films were postponed, and there was an estimated 5% drop in the annual production rate of the world's cinema capital, offsetting the industry's attempts to recover post-pandemic.
Hollywood enters 2024 bearing its crises, fears of artists, technicians, and investors. The rising dominance of streaming platforms threatens the existence of theaters, which have decreased in the United States from 41,000 to 39,000 between 2022 and 2023. The public's shift towards "home movie watching" appears to be a real nightmare. Additionally, the reduced rate and level of Hollywood productions, with only two successful films, "Barbie" and "Oppenheimer," which Meryl Streep considers crucial for saving the cinema and its workers, remains a concern.
Theaters at Crossroads
The crisis of the decreasing number of theaters isn't a recent phenomenon. Concerns about their disappearance and transformation into smaller screens distributed among families or individuals has been shaping up since the turn of the millennium with the spread of digital cameras. The prophecy became clearer as most of the world's theaters switched to digital projection. The visible fact of streaming platforms, such as Netflix, Prime Video, Disney+, and others cutting up to three-quarters of the viewing market, marks a significant signal of the last form of collective viewing of the seventh art ending.
The COVID-19 pandemic resulted in the closure of major theater companies, with "AMC" being the first major institution to shut down its theaters in March 2020. At that time, director Christopher Nolan issued a call to save cinemas. The Washington Post wrote, "When this crisis passes, the need for collective human engagement—the need to live, love, laugh, and cry together—will be stronger than ever. We need what movies can provide us."
The closure of theater companies "ArcLight Hollywood" in Los Angeles and "Regal UA" affiliated theaters, and their hesitant reopening post-pandemic, was evident in the tepid box office revenues for films like "West Side Story" and "Nightmare Alley", which failed in theaters but succeeded on streaming services.
Social Engagement
Experts in market statements to "Entertainment Weekly" (EW) suggest that the complete disappearance of theaters is unlikely. American director and writer of Indian descent M. Night Shyamalan believes that the isolation imposed for two years due to the pandemic has increased the desire for social interaction.
Shyamalan, renowned for his psychological horror films, supports his view with the box office earnings of "Spider-Man: No Way Home" which grossed over one billion dollars, citing the success of films like "Uncharted," "The Batman," and "The Lost City." However, ignoring the impact of two years away from the big screen and its ability to change the audience's viewing habits is difficult to accept.
Film producer Anita Gou admits, "We are renegotiating our relationship with cinema because it's clear that streaming is the way of the future, but it won't kill theatrical release. In fact, I believe that film-going will become even more of an event, akin to going to an amusement park or concert, as opposed to a routine viewing experience."
Jane Rosenthal, co-founder of the Tribeca Film Festival and Oscar nominee, said, "Cinemas have become smaller and smaller, prompting one to say: Okay, I better stay home. What should be done now is to add to, not shrink, the theater, making it a suitable place for family entertainment."
Another suggestion is to not limit theaters to showing movies but to also showcase television series, as expressed by director Sterlin Harjo.
Scott Stuber, head of global films at Netflix, believes that theaters will evolve to host social events, and may even make deals with sports leagues for watching games on weekends, and kids might go there to watch esports championships.
Artificial Intelligence: A Long-Term Battle
In an interview with "Hollywood Reporter," John Harrison, an expert on media and entertainment, explains the excitement AI is generating within media circles. Companies are cautiously but actively exploring AI's possibilities, conducting pilot projects, and establishing internal teams to strategize integration. The focus is on enhancing productivity by incorporating AI in back-office operations and driving growth by integrating AI in creative processes. It can be utilized for efficiency in editing, dubbing, and content recommendations, especially for streaming services.
The potential use of AI in cinema seems boundless. Despite the 118-day strike by writers and actors last year, which ended with mutually agreed-upon deals, AI promises new horizons and endless battles.
Mergers and Acquisitions
At the end of 2023, officials from two of Hollywood's major companies held preliminary meetings to negotiate one of the biggest mergers in global cinema history between "Warner Bros. Discovery" and "Paramount Global," with an anticipated deal value of $38 billion. The merger aims to combat the dominance of modern streaming platforms in the global market.
The merger aims to advance the challenge "Paramount+" and "MAX" currently face against the streaming market dominated by "Netflix" and "Disney+."
Netflix threatens the existence of theaters (Al Jazeera)
The new merged company will control 30% of the American film distribution market, more than both "Universal" and "Disney" combined. The deal seems perfectly timed for this new era, as both companies face the repercussions of streaming success and the waning influence of cinemas.
John Harrison concurs with the merger idea, considering it an effective way for media companies to extend their digital range and compete with giants. However, he acknowledges the complexities involved, including regulatory challenges, especially in an election year like 2024.
