Hollywood hit hard by Covid-19 pandemic

Elizabeth Wagmeister, Variety senior correspondent, joined Yahoo Finance's Jen Rogers and Akiko Fujita to discuss the impact the coronavirus has had on Hollywood.

Video Transcript

JEN ROGERS: Production in Hollywood and around the globe has grown to a halt. But, of course, we're all in our homes streaming any content that we can. Let's bring in Elizabeth Wagmeister here. She's "Variety's" Senior Correspondent. And Elizabeth, we've had these movies being released here in the home, not in the theater. So Disney moving up some movies. We had "Frozen 2" coming out early. And I think everyone wants to know, is this here to stay, do you think, or is this just a temporary way to get around this problem?

ELIZABETH WAGMEISTER: Well, right now it's a temporary problem, and the studios are certainly hoping it's a temporary problem, and certainly the movie theaters are hoping it's a temporary problem. But that is the big question because, as we know, long before the coronavirus crisis occurred, movie going was already way down. So movie theaters were already about 30% down because of streaming services and because of the popularity of those streaming services on the rise, so now the studios are doing it out of necessity, but it is a potential problem.

I was going to only have streaming services now, and is the movie theater business going to be gone?

- --and taking classes online.

JEN ROGERS: I mean, the first thing [INAUDIBLE], we're all figuring out how to work from home here. There might be something on your computer that's making a little noise.

ELIZABETH WAGMEISTER: I [INAUDIBLE]. I think there was something streaming on my computer, probably a trailer for one of the movies that I'll be watching on my couch later.

JEN ROGERS: What was the trailer for?

ELIZABETH WAGMEISTER: [INAUDIBLE]. I realize I was being distracting.

JEN ROGERS: So for Hollywood, there are these tent poles, and right now the ones that have come out are the giant movies where they make so much money. We have seen those pushed. So think Bond, right? Think-- we've got "Top Gun" coming out this summer. Are those movies-- if this goes on, are those movies, the tent-pole movies, the superhero movies going to be released to homes and over streaming services, or will they hold onto those for dear life?

ELIZABETH WAGMEISTER: You know, that is the big question. Right now, of course, they want to hold on to them. That's why we saw Bond was pushed. That was the first movie that was pushed before this crisis really exploded, and they pushed it to end of year because the studio had foresight that this might go on for a very long time.

Well, Bond, as you said, that's one of the big Hollywood tent poles, you know, makes over a billion dollars. But what we're going to see is the summer box office is going to be hit very harshly because just maybe a week ago-- less than a week ago-- a lot of these studios thought, is this just two weeks? Is it just six weeks? Now I think Myles said earlier six weeks seems like the good end of the stick right now.

So now what we're seeing is the studios, they are already postponing these summer releases. I mean, you had "Black Widow" comes out in May. That's a huge Marvel film. Now the next one that everybody has their eyes on is the "Wonder Woman" sequel. Of course, that made nearly $1 billion for the first one that was out. That comes out in the summer. Likely not going to come out.

Even if you put these on home entertainment, on a streaming service, you're not going to make as much as you make at the box office. Remember, last year Disney alone by middle of the year made over $7 billion at the box office.

AKIKO FUJITA: So kind of [INAUDIBLE] to your point there, you know, I was thinking back to pre-coronavirus and the whole debate among the studios was, well, can we, you know, release directly on streaming services? You know, how many weeks do we have to have a theatrical run? And I'm thinking, you know, is this kind of that tipping point where studios are going to start to say, well, maybe it's not so bad to go direct to streaming? But I guess the argument here being that the money is what's going to dictate that at the end. Do you see a shift at all coming on the end of all of this?

ELIZABETH WAGMEISTER: Definitely. I mean, I think, as you said, we already have seen the shift prior to this pandemic, and now that will be the big issue. You know, do people still want to go to theaters, or do they just want to stay on their couch? Of course, for a family, a family of four, it costs much more than $19.99 to go to see the movies.

Right now, Universal was the first studio to say we're going to release all of our movies that are in theaters for $19.99. Of course, right now that is a temporary problem. But, you know, the studios, they want to make as much money as they can. And if you're Disney and if you could have people subscribing to Disney+ on a monthly subscription basis and running to the movies to see a Marvel film or to see a family-friendly animated film, you want both.

So I don't think that we're going to see everything just stay on streaming after coronavirus, but it certainly is a concern because the landscape was already changing so much before. But you could also look at the other side of things. This might make people really miss going to the movies, really miss that experience of sitting in a theater. I mean, I know myself, I'm self-quarantining, as everyone else should be, and it's been about a week. I'm already going stir crazy.

And I love to watch things on my couch. I am dying to go out to the movies. I'm dying to go see a concert. So hopefully what will happen, not just with entertainment but with every business, is we'll really see a boom in business because people will have been missing that.

JEN ROGERS: I think all of us would like to get out of wherever we are. But for the business model, on Wall Street some people said that Netflix has some leverage to raise prices, that where is it? Could they go higher? And, of course, we've had more competition come in here, so maybe it's harder for them.

But if people don't have another choice and you're at home, can they get these pay-per-view prices high enough? Say it's Friday night and you want to watch the new Marvel movie. It's going to be $50. It's going to be $100. It's going to be more along the lines of a pay-per-view fight. Is there a world that works that way and then does squeeze out the movie theaters?

ELIZABETH WAGMEISTER: Absolutely. I mean, that is a real strong possibility, as you said, to go back to that pay-per-view model. I mean, especially now if movie theaters continue to be closed-- I mean, AMC, they're the only theater that gave a range, and they said 6 to 12 weeks. That puts us at best in May or middle of summer.

So if you're Disney and now you have a Marvel film that would have made over a billion dollars and you only have one choice, which is to have people watch it in their homes, I don't think that they're just going to say that just comes with the Disney+ subscription fee for around $6 a month. You know, I think that they say we need to charge more for that. So maybe there's a world in which Disney+ says you pay your monthly fee, but if you want a new movie, you pay an additional fee.

So I think there's so many questions out there. There's so many possibilities. But the longer that this goes on, the studios are going to have to get creative because they're going to have to make money.

And as you said, Jen, if there's only one choice, which is sitting on your couch, being stuck indoors, and you need to be entertained, I think people will pay more for it. Of course, right now there's so many people losing their jobs. To raise prices I don't think would be very good in the court of public opinion certainly at this time.

But Netflix actually just moments ago, they announced a $100 million relief fund for the creative community and entertainment. There's been 120,000 crew jobs that have been lost in entertainment. You know, people that are not in this world of Hollywood, they think of the entertainment business being actors and red carpets and the glitz and the glam, but a lot of our community is people who are freelancing. They're paid on the job by the day-- a photographer, a carpenter, you know, all these crew members. So there's a really huge issue right now, and Netflix did just step up to the plate literally moments ago.