Hollywood and COVID-19

Outlook

More Disruption

Five years from now, new technologies may have emerged that could upend once again an already disrupted industry.

“Now more than ever, entertainment and technology are joined at the hip,” says Anthony Palomba, communication professor at the University of Virginia's Darden School of Business. He predicts virtual and augmented reality technologies will finally turn the corner of general acceptance, allowing viewers wearing special goggles or headsets to feel fully immersed inside a TV show or movie. Artificial intelligence also can be used to better determine what customers want to see, to guide people to that content or even to help create the content, according to Palomba.

Film producer Nunan predicts movie studios or streaming services will buy up movie theaters again, just as the studios did after the Spanish flu pandemic. If movie theaters continue to struggle financially due to lower attendance, a trend even before the pandemic struck, “the studios are just standing on the sidelines, waiting for them to get more and more desperate to either sell out completely or partner at extremely favorable terms to the studio,” says Nunan.

Theaters then may become associated with a single studio that views the theater as primarily a way to promote its brand, which could include streaming shows or other products. A Disney-owned theater could show new and old Disney titles, or related films that create interest in a current new feature, Nunan says. An Apple or Amazon theater might have other Apple or Amazon products for sale, such as Amazon Fire or Apple TV devices.

“It's all going to be brand extension, with the mother ship — the streaming service — being the biggest priority,” he says.

Streaming services may also shake out, as consumers struggle to justify multiple subscriptions, or else become confused and overwhelmed by the number of choices. “Five years from now, I don't think we're going to see all these streamers still standing,” says Nunan. “Some may go away; some may consolidate.”

On the positive side, the plethora of channels needing content — and able to provide niche services to targeted customers — means more opportunity for lower- and medium-budget films, independent movies and other character-driven storytelling to reach an audience, Nunan says. Lower- and medium-budget films “are experiencing a renaissance … because they're finding homes on these digital platforms,” he says.

Streaming services are likely to pick up such productions, perhaps as a series rather than a single film, but in either event offering many more viewing choices for consumers.

Some legacy movie companies — the creators of Hollywood's so-called golden age from the 1930s through 1945 — may find themselves unable to compete against streaming services, Palomba says. He points to current behemoth Netflix, which, through its aggressive spending, “has raised the costs on everything, including talent.” Palomba notes that Ryan Murphy, showrunner for the popular “American Horror Story” TV series and many others, signed a $300 million, five-year deal to leave 20th Century Fox and produce content for Netflix. “How do you compete if you are Fox?” Palomba asks.

However, other legacy companies, such as Warner and Disney, also own major streaming platforms, meaning they are covered no matter which way consumer demand shifts. Similarly, Paramount is now part of ViacomCBS and is soon to launch its own streaming service, Paramount+.

“The entertainment business is like Las Vegas in that the house always wins,” says screenwriter Landau. “Whether Warner Brothers releases theatrically or on HBO Max, they own both.”

Go to top
Go to Pro/Con