With Italy, France and Spain in full lockdown in the face of the unrelenting coronavirus outbreak, their respective film industries are preparing to take exceptional measures that could limit the anticipated economic damage by opening themselves up to an uncharted gamble in streaming.
To date, dozens of film releases have been postponed to between July and October across all three countries, which are the hardest hit in Europe. This could trigger a bloodbath for theaters in markets where independent distributors are already struggling to compete with U.S. majors, such as France, where Hollywood titles accounted for 59% of the nation’s record-breaking 213 million admissions in 2019.
The crux of the battle is ensuring the box office debuts of independent European movies aren’t crushed by a tsunami of movie releases. One increasingly attractive option is to offer these films immediately on demand via streamers or broadcasters — a radical move already enacted by the likes of Universal Pictures in the U.S., and one that requires traditionally immutable European film boards to tweak the schedules for release windows.
In France, which has Europe’s strictest release window policy and the most powerful lobby of exhibitors, film board CNC is in talks with guilds to bend the rules and allow movies to bypass cinemas and debut on transactional VOD.
Under the existing release windows, movies that have been pre-bought by TV channels must debut in theaters first in order to benefit from TV financing, and can launch on transactional VOD no earlier than four months after that. These films eventually are allowed to land on streaming services such as Netflix no sooner than 36 months following their theatrical release.
However, in light of the dramatic circumstances, almost every film body in France appears to be on board with shaking up the current rules, albeit temporarily. The sole note of discord came when France culture minister Franck Riester and the CNC announced unilaterally that all films that were in theaters as of March 14 could be released immediately on pay VOD — a decision met with outrage from some exhibitors.
Shellac, a distribution company that also runs theaters in Paris, has decided to release its film “Monsieur Deligny” straight to VOD. Meanwhile, Memento Films Distribution, which risked releasing the Juliette Binoche-starring “The Good Wife” just four days before the theater shutdown after spending more than $1 million in P&A, is planning a second theatrical release when cinemas reopen, even if it means forking over additional marketing dollars.
“This crisis is unprecedented and more violent than anything we’ve had before because it doesn’t only slow down economic sectors — it stops their activity altogether,” says Didier Duverger, honorary president of leading film and TV financing institution Natixis Coficiné. “If it lasts 30 to 45 days, it will be OK, but beyond that, there will be casualties,” he adds.
A $23.9 million plan was unveiled March 17 to help cultural industries, while the National Film Board has allowed companies to postpone social security payments, in addition to offering loans and options for repaying existing credit.
In Italy, where the box office was down 70% the week before theaters shut down, the motion picture association Anica has also been exploring what to do with dozens of local and international films in release limbo and finding ways of offsetting the loss of the theatrical revenue stream, the org’s chief, Francesco Rutelli, tells Variety.
Rutelli is negotiating agreements with platforms including Netflix to find a “new balance” that will also benefit theatrical distribution. Under the plan, exhibitors would be compensated for the time they are forced to stay shut.
The damage in Italy is at $108 million for the television production business, according to Giancarlo Leone, head of Italy’s TV producers’ association APA.
Damages to film production are expected to be greater. A $145 million aid package to help exhibitors, distributors and producers was unveiled by Italy’s culture minister on March 16.
Meanwhile, in Spain, where release windows aren’t as strict as in France and Italy, the government is also considering abolishing the requirement for Spanish films to bow in local theaters in order to trigger state subsidies worth up to around $1.1 million per title.
That would also allow the distributors of roughly 50 Spanish titles ready for release to approach broadcasters and streaming platforms to negotiate the films’ release.
One idea is to open up a pay-per-view window before platforms’ SVOD general release because “pay-per-view isn’t so different from cinema,” suggests Alvaro Longoria, president of the European Producers Club.
Losses to Spain’s film and TV sector are calculated to be at around $165 million to $220 million, says Pilar Benito, president of Spain’s Asociación Estatal de Cine. A $220 million stimulus package was announced by Spanish prime minister Pedro Sánchez on March 17.
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