ANAHEIM, CA -‘ WandaVision ‘photo promo at the Sunset Showcase Theater in Disney, Calif.  Adventure Park (Photo by AaronP / Bauer-Griffin / GC Images, Feb. 18, 2021)
So much is going on with the digital transformation of media and entertainment, and it was only accelerated by the pandemic. Home entertainment has been fueled by the audience that stays at home in the U.S.Streaming subscriptions alone rose 50% in 2020, meanwhile, theaters have been closed for almost a year.It’s like a massive natural experiment that no one could ever have predicted what will the results be and how will theater and streaming services come into one World coexist after the pandemic?
Let me use demand and supply side analysis of facts and trends to make an informed prediction
The inability to go to the theater has forced consumers to watch movies, series, sports, and other entertainment at home, whether they like it or not, and those who don’t can get up from their couches and in the theaters flock as soon as the COVID restrictions and fears subside
This is not just a guess in China, where COVID cases are under control, there was a box office record during the Lunar New Year last week signaling that consumers may be flocking to theaters in the US as well and other markets Now, once the cabin fever effect on theater demand wears off, how will demand for home pandemics be down? Theater entertainment looks like?
In a recent poll conducted by Jan.398 US. Adults from What if Media Group, 20% of respondents said they do not intend to return to theaters once a COVID-19 vaccine becomes widespread, while another 10% said a return is unlikely to what if Media Group CMO Jordan Cohen stated, “Our survey results reflect that while there is a demand for movie theater, the pandemic has forever changed the way they consume content, at least for some Americans, much like it did at What we saw with the intensification of the shift to e-commerce “
In fact, Cristel Russell, a marketing professor at Pepperdine’s Graziadio Business School, recently studied with her research colleagues the increasingly ubiquitous phenomenon of the second screen where consumers access social media interactions while watching TV. Interestingly, Russell believes this phenomenon is will also motivate some consumers to go to the cinemas: “There will likely be many segments who want to keep the pace of their entertainment consumption and find the theater environment too restrictive. But there will also be segments of the market that are looking for the sanctity of Pure, pristine experience pouring into the theater ”
When these demand trends and observations materialize, demarcated segments will be available for both theater and streaming services. The question then is how can they coexist to serve these market segments
Cinema companies, with their historic market power, have called for an exclusive theater window for movies that averaged three months before the pandemic. Most of the time, movies were released on streaming and other digital channels outside of that window
With closed cinemas, this rule of thumb for film distribution is gone. Large studios like Warner Media and Disney
Premiere or premiere of the major film productions in 2020 and 2021 on their direct-to-consumer streaming services.As soon as the theaters are fully open, cinema companies expect another exclusive theater window
The post-pandemic theater window is likely to look different, with theaters closed during the pandemic and the audience shifting to streaming services, this also has market power so there should still be an exclusive theater window after the pandemic, but that due to the increased demand for home entertainment and the resulting new market power of streaming services is likely to shrink
Fortunately, there seems to be a way for theater and streaming services to coexist peacefully as the theater window shrinks Ben French, a research fellow at the Pepperdine Institute for Entertainment, Media, Sports, and Culture, used the data from Box Office Mojo for the 207 films released in 2019, to estimate that 90% of box office revenues will be captured in theater within two months of being released, therefore, the release of films on streaming services will on average better serve the market without to severely affect theater revenues
The trend line from the data shows that 90% of earnings are recorded after 8 weeks (2 months) NOTES:  Current data shows that 96% of revenues were generated within 2 months. Trendline is based on logarithmic regression. Data points apply to 207 films published in US in 2019
The economics revealed by the French analysis will materialize more quickly when cash-rich distributors end up acquiring difficult cinema companies. These vertically integrated companies will seek to optimize revenue across the channels Therefore, it makes a lot of sense for them to publish publications within the 3rd Stream
month after the theater’s release
I assume that theater and streaming services coexist and will serve both avid moviegoers and couch potatoes who stay at home better by cutting the exclusive theater window, predictions are risky, but if I’m leading the way , Consumers are better off enjoying movies at home sooner than soon after they hit theaters Let’s see what happens
I’ve seen digital technologies transform industry and consumer behavior on four continents for more than two decades. I have a PhD in information and
I’ve seen digital technologies transform industry and consumer behavior on four continents for more than two decades.I have a PhD in Information and Decision Science with an MBA and a Masters in Applied Economics. My career began in the technology sector at IBM in South America, followed by airline revenue management experience in US., Europe and Asia I am fascinated by the digital transformations in travel, media and entertainment, so I decided to embark on an academic career to study these industries in depth.I use an economics lens to understand common patterns of digital disruption in Researching various industries and predicting industry-specific outcomes Currently, I am Executive Director of the Institute for Entertainment, Media, Sports and Culture at Pepperdine University Follow me on Twitter (@nelsongranados) or Forbes by clicking the Follow button below
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