The film industry remains in one piece three years after the COVID-19 pandemic hit. If it can withstand the enormous challenges brought upon by the pandemic, is there an obstacle the film industry cannot hurdle?
The influence of streaming services quickly comes to mind when pondering the future of the cinema sector. In 2023, the global number of digital video viewers is projected to reach 3.5 billion. It tells us that more households are relying on streaming platforms for their entertainment needs.
On top of that, the streaming market is continuing to grow year by year. In 2018, Statista penned the value of the streaming sector at $42.4 billion, which is already a lot. Then its value doubled four years after, as the streaming market was valued at $84.3 billion in 2022.
If you only consider these numbers above, you would think that theater businesses are in such peril. Let’s put that thought away right from the get-go. The film industry is still high up there on safe grounds.
But we’ll get back to the cinema sector in just a minute. Let’s first dive deep into the origins of streaming services and how they have become so popular.
How did streaming services become so popular?
YouTube is undoubtedly the pioneer in the streaming market. It started off as a streaming service right away, unlike the DVD-rental beginnings of Netflix in 1997. After entering its name into public consciousness in 2005, YouTube’s value quickly skyrocketed when it was acquired by Google in 2006.
In what’s considered the best tech deal in history, Google shelled out $1.65 billion to buy YouTube. It wasn’t a ripoff back then, but it’s safe to say that it was a safe bet for Google. YouTube’s value currently stands at $183 billion, an eye-popping growth rate from where it was in 2006.
YouTube’s sudden rise to prominence also happened almost simultaneously with the availability of wireless Internet connection in households. At the time, there were still many people who were using the traditional and slower DSL setup, but the trend was already geared towards the faster Broadband connection. With a growing population gaining convenient access to the Internet, it was perfect timing for YouTube to take off.
With YouTube gaining traction in the market, Netflix and other streaming options followed suit. You’d be surprised to know that there are more than 200 streaming services currently available worldwide, which tells you all you need to know about the competition and potential gains in the video streaming market.
But then the pandemic hit in 2020, and it surely affected the movie industry. Did it have any negative impact on the streaming market?
How did the pandemic affect the movie and streaming sectors?
For self-evident reasons, the theater business took a direct hit during the height of the pandemic. From a $ 42.3 billion revenue in 2019, the theatrical sector only garnered $12 billion in 2020. That’s a $31.3-billion dropoff in the span of a single year, not to mention that other facets of the film industry were also affected by the COVID-19 pandemic.
The close-quarter nature of work in the industry forced them to work minimal or totally shut down operations. Do you still remember that day when Tom Hanks announced that he and his wife tested positive for COVID-19? They were filming a biopic at that time, but as soon as Hanks made that public announcement, the set was abruptly packed up and shut down.
With the theater businesses and movie productions slowing down, streaming services continued to rise even in the midst of the pandemic. In 2020, the streaming market was still valued at $59.1 billion, which was $27.8-billion higher than the theater market.
It’s safe to say that the streaming market wasn’t at all negatively hit by the pandemic. So all attention points toward how the cinema industry is recovering from this challenge.
A slow but steady recovery for movie theaters
The good news is that the movie industry has taken significant steps in its recovery. From just 1.9 billion tickets sold worldwide in 2020, cinema attendance is steadily increasing in the following years. Around 3.3 billion tickets were sold in 2021, and that even increased to 5.7 billion in 2022.
By 2026, Statista projects cinema admission to reach 7.7 billion tickets, a number that is on par with pre-pandemic numbers. This is a very positive trend, especially for smaller movie theaters that took the brunt of the COVID-19 impact. It will be a very slow march toward recovery, but the important thing is it’s still possible for these theaters to bounce back in the next couple of years.
The film industry can withstand the streaming challenge
If the movie industry continues this trend of recovering from the pandemic hit, there’s no doubt that it could withstand the challenge put up by streaming services. Sure, the numbers for the streaming market are steadily increasing, and who knows when its peaking point will be. But the crucial fact remains that the growth of streaming services has not resulted in huge dropoffs for the theater business.
Not everyone has a state-of-the-art home theater setup, so people will still rely on theaters and cinemas to watch their favorite movies. The unique experience of watching a movie on a 16-foot-wide screen is just too much to pass up for moviegoers.
Film production companies and theater businesses should know how to effectively market a movie because they still have a huge audience base to tap into. A creative, audience-driven movie promotional campaign may exhaust more resources and require more funds, but it could go a long way in turning heads and tapping into organic, word-of-mouth marketing.
As long as this world continues to exist, there will always be movies to produce and promote. In a perfect world, though, there could be avenues for streaming platforms and theaters to work in unison. It’s not too far-fetched to imagine that scenario, especially in an industry that seems to evolve by the day.
