A Brief History of Interrupted Film Distribution

By Lewis Bayley

When contextualising what cinema distribution looks like in the age of the Covid-19 pandemic, it is important to look back at adaptations the industry has made to facilitate sector sustainability and growth in other times of hardship and the changing nature of distribution.

The first case of a large interruption on the industry was expected to come along with the Wall Street Crash of 1929. To everyone’s surprise, between 60 and 80 million Americans visited movie theatres once a week during this time. [1] Though the experience for cinema-goers at that time was very different. For the price of a packet of cigarettes, going to the movie theatre included “a cartoon, newsreel, a B-feature and the main film”. Of course, at this time, cinemas were the only accessible-place to consume moving-image content, with home television sets only reaching numbers in the thousands in 1947. [2] Today, the cinema-going experience typically includes corporate commercials, upcoming film trailers and then the main feature film, interestingly advertising at cinemas has existed since the first one opened in 1902. [3] Advertising before films has proved crucial to the sustainability of movie-theatres around the globe, with Blue Line Media reporting cost expectations between for $3,000 and $4,000 for a 60 second spot at one theatre for four weeks. [4]

Cinemas closed in the UK immediately when the second World War was declared in September 1939 citing safety concerns but reopened just one week later. [5] Cinemas weren’t simply escapism as you might expect at that time, Hollywood and the British film industry worked closely to support government information campaigns and even coordinated the production of films that would boost morale with heavy themes of patriotism. [6] Heavy bombing decimated attendance for some time but audiences boomed from 1941, benefitting from bans and closures on other leisure activities and the draw of successful films like 49th Parallel [7], which exemplified the success of these morale-boosting initiatives. The year following the end of WWII saw two-thirds of Americans attending the movies at least once a week, earning studios record-breaking profits. [6] Across the Atlantic in the UK, an all-time peak of admissions was reached that same year. [5]

Home film technology made a great jump when Eastman Kodak released the Super 8mm film format in 1965 [8] , and although far cheaper than previous alternatives, the cost still priced out most. The format allowed for shortened versions of films to be played in the home [9] as well as giving everyday people the facility to shoot their own home-movies, where the product would find the majority of its financial success. Sony’s Betamax release a decade later would truly revolutionise home-viewing.

To paint a picture of the average person consuming moving-image in the home in the 1970’s, it was simply a television with less than a handful of channels that you could watch live. No ability to record television. No ability to playback content. [10] The arrival of the Betamax machine was a revelation and would allow people to play movies on tape to their television sets. This ushered in video rental shops popping up on high streets and birthing new life into the ‘home-cinema’ by making it accessible to the average person. People could also now record live television to tape and play it back later, and over and over again. But Sony weren’t the only manufacturer hoping to enter the market. JVC launched its VHS soon after Betamax hit the market, [11] starting the first and original format war.

Entering the market after their competitors gave JVC an advantage. They made their VHS deck simpler and cheaper to produce to undercut Sony. [12] Reluctant to let this affect them, Sony adapted Betamax to become simpler and offer better image quality. But JVC took an unprecedented turn and rather than focusing inwardly on the product itself they looked outward to the film industry for a grand venture that would truly propel as the standard format. JVC built relationships with movie studios and distributors to use their format to distribute films for purchase and rental. By the time home-video reached the UK in 1978, [13] VHS would be their go-to standard.

‘VHS and Betamax, opened up a whole new arena for making additional profits on Hollywood’s traditional, bread-and-butter product — motion pictures. Studios with video distribution subsidiaries were soon able to not only greatly increase profits made on recent hit films by selling videocassette copies to retailers; they could recoup most, if not all, monies lost on films that originally flopped at theatres through video rentals and sales at discount prices. In fact, some enterprising Hollywood producers began to specialize in making low-budget motion pictures for release “straight-to-video”, thus bypassing movie theatres altogether. Many major studios also began to sell videocassettes of their old film classics from their vast film libraries through selected retailers, providing yet another once-unforeseen financial bonanza. For Hollywood’s more progressive movie moguls, by 1979, the sometimes-dismal financial days of the early 1970’s had miraculously turned to pure gold.’ [14]

VHS would remain at the standard in home-video for over two decades [15] with one particular film acquiring almost $1 billion in sales in its first three months of release. [16] James Cameron’s chart-topping and record-smashing feature film Titanic [17] premiered in theatres in December 1997 and spent ten months in cinemas, [18]crossing over with a $50 million home-video release campaign [19]. Even with the slow adoption rate of DVD’s, it assisted the films home-video success when the special edition release with extra features, such as behind-the-scenes footage and interviews, became the first DVD to sell a million copies between 1999 and 2000. [20] The inclusion of ‘special-features’ would become a staple in the future of almost all DVD releases and arguably significantly help booster the formats adoption rate. In the same year that DVD sales took over from VHS tapes [15] the announcement for a Blu-ray Disc project was announced, designed to store several hours of high-definition video and supersede DVDs. [21] Titanic would not go on to release a Blu-ray edition [22] until shortly after a 3D cinema re-release of the film [23] a decade later, simultaneously alongside a limited 4 disc Blu-ray 3D version. [24]

2001 of course saw the tragic events of September 11th in the United States, grounding flights temporarily but not closing down cinema screens. Understandably, the domestic weekend takings following 9/11 would hate a significant hit [25] but the events led to a number of film releases being ‘delayed, movies re-edited and projects cancelled.’ [26] Many films would digitally remove the Twin Towers from shots before release [27] and even reissuing marketing materials or cover-art, such as the DVD cover for the 1976 film King Kong that depicted the title character climbing the World Trade Centre. [28]

The tragic events encouraged a rethink for executives, speculating what kind of content cinema-goers will want to watch in this new era. In his 9/11 cinema retrospective article for The Guardian, J Hoberman writes that there were ‘solemn promises that motion pictures would henceforth be a “kinder, gentler” form of entertainment.’ He then notes that The Washington Post reported “heroic combat movies” were gaining popularity from home-video rental stores. [26] Arguably ushered in by the rhetoric of then sitting president George W Bush who declared a ‘war on terror, [29] late 2001 saw the success of Ridley Scott’s Black Hawk Down. [30] The film, which followed US Army Rangers in the middle east seemed to have timely capitalised on the Nation’s sense of patriotism. However, escapism in the genre of fantasy would take-over the cinematic zeitgeist with the overwhelming debut of the first Harry Potter and Lord of the Rings films in the final few weeks of 2001. [31] Fantasy films would take the top grossing film title at the global Box Office for the next 6 years in a row.

In 2006, Apple co-founder Steve Jobs announced that iTunes would now start selling movies digitally in addition to their existing digital music library. ‘Today we are making more than 75 films available online and we will be adding more every month.’ [32] Making music and films available digitally is often overlooked today, where streaming and downloading digital content is part of every-day life but what Apple had done at this time was truly remarkable. Contextually, today we consume most media on our phones — but 2006 predates the iPhone and other traditional ‘smart-phone’ devices by more than a decade. Two years after making films available for purchase on iTunes, Apple announced a Movie Rentals option that was developed with all major motion-picture distributors. [33]

Before Apple announced their Movie Rental option, new kid on the digital content block was Netflix — but they’d been in the home-video business for almost a decade. [34] Launched by Reed Hastings and Marc Randolph in 1997, the company distributed DVDs to subscribing customers for a fixed monthly cost of $20. Hasting saw the potential for movies being more conveniently streamed over the internet in the future rather than a postal delivery strategy, even though there was no existing technology to facilitate such a thought at that time. He met with home-video rental giant Blockbuster seeking a 49% stake in Netflix, hoping to become Blockbuster’s streaming service. Hastings pitched the idea and deal more than four times to Blockbuster, but was rejected every time. [35] 2007 saw Hasting’s vision brought to fruition with the introduction of their streaming arm of Netflix. The company then launched its first originally produced content for the service in 2013 [36] and continues to invest heavily in these ‘originals’ with an estimated $17 billion being spent on content in 2020. [37]

Netflix’s ability to capture the streaming market has been a marvel to watch. With other companies playing catch up to try and compete, with varying degrees of success. As of November 2019, Netflix has almost double Amazon Prime’s 125 million subscribers. [38] But does the streaming model really work for companies? It is reported that Netflix will close its cash gap between 2021 and 2024. [38] With tens of millions of people shutdown in their homes, could the impact of coronavirus on streaming boost their subscriber count and get them into the clear quicker? Or will this time just spread market-share?

The most similar world event to look at to use as a case study for looking at the impact of the coronavirus on film distribution would be the 2003 SARS virus outbreak in China, however strict closures on cinemas for prolonged durations were not reportedly imposed. Distributors postponed some releases and cinemas cut screenings as their takings halved in one week. [40] At the end of April 2003 Beijing closed cinemas and theatres in an effort to stop the spread of the virus. [41] In total, 8,000 people were infected with SARS and the virus took 774 lives. [42]Cinemas had gradually reopened sporadically and the box office did take a hit, but they kept going. It is estimated that the second instalment of the Lord of the Rings franchise only took half of its anticipated takings when it opened in late April. And considering this was during the epidemic, it is not perhaps as drastic a flop as one might anticipate. [43]

But what happens when cinemas stop trading entirely? What happens when cinemas stop trading entirely for months on end? And globally? The coronavirus has been an unprecedented force of nature for every aspect of modern life, pushing governments, health provision and businesses to the edge. In the age of a digital content renaissance, how did distributors adapt to successfully bridge the gap and continue to survive during a global pandemic?

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