The Downfall of Film Industry Due to Covid

The pandemic put a huge dent in how film industry is run today. Movies are a massive value creator. According to World Economic Forum, global box revenues totaled 42 billion last year, an all time high. Contributing almost one-third of the estimated 136 billion in value of worldwide movie productions. Hollywood aids more than 2 million jobs and 400,000 American businesses, which means since the pandemic has hit many people are out of a job. The coronavirus has stopped all projects, halting film production and closing down cinemas.

Before the virus, the film industry was already taking a hit making significant change, with production not getting finished and not being able to get the money they need, with the audience not taking in their ideas and buying their product and not being able to distribute it out where they want it to go they’ll need to make change once again.

Big companies such as Warner Bros, Walt Disney, 20th Century Fox, Paramount, Sony, and Universal, also known as the big six, were releasing up to twenty films a year and as few as nine in 2019. This shows how the changes they’ve made haven’t been working.

Many companies started releasing movies straight to streaming services such as Netflix and Amazon Prime Video. Limiting the movies released in theaters caused an increase in money for the streaming services but decrease in money toward the theaters. The movies that would be coming out in theaters are coming out on Amazon Prime Video. Buying movies on Amazon Prime Video is great, but for theater companies such as Regal, they are losing money and shutting down due to the fact you can’t go see a movie in person.

Again according to World Economic Forum, Some claim that this is “the biggest shift in the history of Hollywood.” With the loss of money and creativity, they will need a big pick me up to get back to where they were.

Covid has made the movie financing more risky. Due to increased health security and insurance, independent studios find it hard to raise capital. Not as many private investors want to help out on their productions, and most times independent studios find it hard to pay back their loans and tax credits.  Another way independent studios haven’t been lucky is crowdfunding. People aren’t wanting to donate their money towards independent studios with everything going on because they don’t trust it to be successful. 

In addition to SVOD (subscription video on demand) services, companies such as Fortnite have hosted an in-game Christopher Nolan themed movie screening. This helps out directors, such as himself, get the word out of a new movie. SVOD services haven’t been doing very well during the pandemic with Netflix originals, to HBO max own films. Streaming services are taking over which is good for them but not so much for Hollywood and certain companies.

With all this taking place, Covid, loss in money and jobs, and all the significant change, Hollywood is looking for someone to step up to the plate and come up with creative good ideas to help get them where they use to be.