Streaming vs. theater debate: 2020 will be the first litmus test

This year will be the first time in five years that an Avengers or Star Wars movie won’t dominate the box office. And while studios have other blockbusters lined up—a Wonder Woman sequel, a new James Bond entry, and a live-action Mulan remake, to name a few—none are expected to reach the box office heights of the mega-franchises Disney pumped out in recent years.

In 2019, Avengers: Endgame became the highest-grossing movie of all time and has made $2.8 billion at the worldwide box office. It was marketed as a “cinematic event,” the culmination of all the Marvel Cinematic Movies that came before it—a film that demanded even the most indifferent of moviegoers to attend. Likewise, the conclusion to the latest Star Wars trilogy, The Rise of Skywalker, has raked in roughly $479 million in the U.S. within its first month of release, which already puts it at 16th on the all-time domestic list. The box office over the past half-decade has been dominated by these movies that attract audiences to theaters for the sake of experiencing pop culture.

But this year is expected to be different. Disney, which accounted for roughly 40% of last year’s box office earnings, isn’t putting out a bonafide mega-blockbuster. Nor is any other studio, really. Popular, established titles will release, but they’re not quite Avengers level—think of the upcoming Top Gun sequel, or the Harley Quinn Birds of Prey stand-alone movie, or Fast & Furious 9. Analysts predict box office returns will go down, and the lack of mega-movies in theaters creates an interesting parallel with the other way we watch movies: at home, via streaming services.

That’s because back in 2014, the last time an Avengers or Star Wars movie didn’t rule the global box office, original streaming content hardly existed. Netflix had just put out House of Cards, the series that revolutionized streaming companies’ approach to producing content, a year earlier. Amazon had just scored its first hit in the fall of 2014 with Transparent; Hulu wouldn’t get its until 2017, with The Handmaid’s Tale. HBO Now, which allowed subscribers to watch the network without a cable package, didn’t yet exist. Neither, of course, did Disney+ or Apple TV+.

Now, streaming services are fully fledged, widespread offerings that are making and releasing the sorts of films that traditional studios do. Much has been made about streaming’s apparent encroachment upon the cinema experience, with contrasting viewpoints. Domestic movie theater attendance in 2017 slumped to a 25-year low, but AMC in its third-quarter earnings report in November said both domestic and international attendance grew. Smaller, independent theaters are struggling to survive—competition from streaming services likely being one factor—but a recent study found that people who see movies in theaters more often are also the people who watch more streaming content at home.

So what to make of this conflicting evidence? One thing we know for sure is that 2020 will be the first year widespread streaming offerings will be available during a “down” year at the box office. It could shed light on moviegoers’ preferences in the age of Netflix. Will the oft-cited assumption that people increasingly prefer to watch movies at home prove to be true?

“This is going to be a litmus test year for studios relying on more mid-range blockbusters and non-franchise films,” says BoxOffice chief analyst Shawn Robbins. “We haven’t had the chance to properly gauge that since those mega-franchises had a presence in each of the last five years.”

Robbins is bullish that both methods of watching content can not only mutually exist but also thrive together. “The landscape has changed, but there’s still a massive market for both,” he says. “These are two entirely different ways to watch content, and often two very different types of content, much like the straight-to-video and DVD booms of years past.”

The lack of mega-blockbusters this year also shines a light on just how much they dominate the movie industry. In 2018, the top 10 releases accounted for roughly 34% of the total box office, according to Box Office Guru founder and editor Gitesh Pandya. In 2019, he pegged that same figure at almost 41%.

“The big are getting bigger and the rich are getting richer,” Pandya says. “The question is, can the little guys survive? There will always be smaller films that do connect with people and make big grosses. I think we’ll see a lot of small and medium-level films come out and give it a try this year.”

Tim League, CEO of Austin-based dine-in theater chain Alamo Drafthouse, attributes that trend more toward the dominance of Disney as of late. “I’m not feeling the air sucked out of the room. We’re currently the No. 4 circuit on Uncut Gems, and it’s performing as a blockbuster for us,” he says, though he concedes that “we’ve always been an odd man out in this arena in that we’re not entirely dependent on the blockbusters.”

Perhaps to the chagrin of cinephile traditionalists, Alamo has embraced partnerships with streaming companies. It worked with Netflix to screen a limited release of Martin Scorsese’s crime epic, The Irishman. “We’re excited about HBO Max,” League adds. “We’ve had great convos with Apple.”

In order for other theaters to thrive in the age of streaming, League says, they need to elevate their game—be it snazzy food and drink options, like Alamo offers, or experiences that can make any screening feel like an “event,” Avengers or Jedi present or not. “It’s our responsibility,” he says, “to make it worthwhile to get out of the house and into the theaters.”