John David Washington and Robert Pattinson star in Tenet, an upcoming spy film directed by Christopher Nolan.
The coronavirus pandemic has not been easy to navigate for studios or cinemas. On Thursday, AT&T CEO John Stankey said he foresaw a "choppy" recovery for the film industry that could force WarnerMedia to find new ways to publish its content.
"We are not optimistic," he said. "We don't expect … a huge rebound in cinema early next year. We expect it to continue to be uneasy."
Stankey's remarks came during the company's earnings call after AT&T reported that the WarnerMedia segment, which includes HBO and the company's film and television studio, had sales of just $ 7.5 billion. This is a decrease from $ 8.4 billion in the year-ago quarter and the result of cinema closures and the need to postpone larger blockbuster releases.
Warner Bros. was one of the first studios to bring a large budget feature to market, bringing Tenet to international theaters in August and the US and Canada in early September. The Christopher Nolan film has raised $ 333.9 million worldwide since its debut, a combination of $ 283.3 million in overseas markets and around $ 50.6 million from domestic ticket sales.
"I can't tell you that we stepped away from the 'tenet' experience and said it was a home run," Stankey said, before adding that he "was glad we did have done".
Under normal circumstances, Tenet could have raised between $ 50 million and $ 60 million domestically on its opening weekend. That number corresponds to Nolan's non-Batman films like "Inception" and "Dunkirk". However, during the pandemic, the film debuted at less than $ 10 million.
With an estimated budget of $ 200 million and a marketing budget likely half that number, Tenet barely broke even at the box office.
The film's lackluster performance, especially on the government side, has led Warner Bros. to be more cautious with other theatrical releases. "Wonder Woman 1984" was hanging around the calendar several times before it made a Christmas debut. However, there is no guarantee that the film will debut in 2020.
Gal Gadot stars in "Wonder Woman 1984".
Audiences were reluctant to return to theaters, especially as Covid-19 cases continued to rise and fears that the outbreak could worsen with colder months. This resulted in Cineworld, the owner of Regal Cinemas, closing more than 500 domestic theaters, forcing the studios in a domino effect to push films through until 2021.
This chicken and egg scenario is devastating for cinema operators and studios. Without new content, theaters cannot stay open, but without a large number of open theaters, studios cannot release new films.
Theaters had hoped that once California and New York eased restrictions on theaters, the studios would be more ready to keep movies on the calendar. Regal even decided to reopen 11 theaters in New York state after Governor Andrew Cuomo allowed theaters to reopen outside of New York City.
Still, Regal is not currently opening any other theaters as the company is losing less money by closing.
"I would say the Christmas season will be the next big checkpoint to see what happens and whether or not we can actually bring some content back to the theater show," said Stankey. "And we may have to make a playful decision based on what is happening in different regions and what is effectively happening to infection numbers in the country."
Stankey said the company remains committed to bringing content to theaters but is keeping its options open and working on a "Plan A, Plan B, and Plan C".
"When we're through the next month or two and see what happens, we're going to pull up the cards on the A-Plan and the B-Plan and the C-Plan and somehow get back to you," he said. "So this is the best I can give you where we start over."
This isn't good news for theater operators who have become cautiously optimistic that these films won't debut until after New York theaters reopen in 2021. Over the past few months, these owners have stepped up security and marketing spend several times only to see movies postponed to a new release date.
The already largest theater chain in the world, AMC Theaters and the sixth largest chain of B&B Theaters, have warned that bankruptcy could be on the table if the situation in the industry doesn't change soon.