Coronavirus impact on Hollywood

Variety Executive Editor Brent Lang joins Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Dan Roberts to discuss the impact the coronavirus has had on the film industry.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back to Yahoo Finance. You know, the entertainment industry is certainly not immune to this virus. We're seeing Hollywood get hit really hard. Production for TV shows and movies have ground to a halt. And talking to us now more about this is Brent Lang. He is the executive editor at "Variety."

Brent, thanks so much for being with us. The most recent news I saw was that "Wonder Woman," the next "Wonder Woman" movie, is going to be delayed. It was supposed to be out June 5. They're going to hold that till August 14. I mean, what does all of this mean for the box office during the summer? Is there even going to be one?

BRENT LANG: Well, I think that's a totally valid question. And obviously, if they're delaying it until mid-August, it's basically a sign that they're kind of waving the white flag on summer. They don't seem to think that theaters will be open anytime soon.

DAN ROBERTS: Brent, Dan Roberts--

ALEXIS CHRISTOFOROUS: And what about TV productions as well? I heard that "The Walking Dead" finale is being postponed. What are you hearing?

BRENT LANG: Yeah. Basically, there's no production going on right now. It's a complete shutdown because Hollywood is such a global business. You know, you have movies like "The Matrix" that are shooting in Germany. You have movies like "The Batman" that are shooting in the UK. And these can't go on right now.

Domestically, there is no production. So basically, everything that was supposed to come out is going to get pushed back, and they're going to hopefully take the slots of the films that were in production and haven't been finished yet.

DAN ROBERTS: Brent, Dan Roberts here. As you mentioned, you know, waving the white flag on summer, we've seen so many movies get delayed, the releases delayed, some by just a month for now. But you have to assume that it'll get delayed again. And then obviously with, you know, "Fast & Furious," they delayed that a whole year. I've been interested to see whether some of these studios might just decide, if this drags on, to put some of these movies on their streaming services.

Now, obviously, you know, Disney has put "Frozen II" out for digital rent sooner than it would have, and I know Universal is putting "Trolls" out for digital rent. But I've wondered whether, you know, something like "Mulan"-- I mean, I know that, you know, Disney thinks it's going to be really big at the box office whenever it's able to get to the box office, so maybe that's part of it. But, you know, especially at a time when Disney's trying to boost subscriptions to Disney+, I've been wondering whether they might take one of these delayed movies-- maybe something like a "David Copperfield," maybe "Black Widow"-- and just drop it right on Disney+.

BRENT LANG: Well, I think you'll see some of that, but it will be a fairly limited kind of experimentation, and it will be more geared towards kind of mid-budget movies like "Trolls World Tour." There was the movie with Issa Rae, kind of a small romantic comedy called "Lovebirds" that was sold by Paramount to Netflix.

You'll see those mid-budget movies maybe experiment with shrinking the windows a little bit. But I think a film like "Black Widow," Fast 9," they cost too much. They're-- they're geared for a global audience, and they're not budgeted in a way that you'd be able to make a profit if you went straight to VOD. So I don't think you'll have a lot of that.

BRIAN SOZZI: Brent, how worried are you about the theater or the cinema industry? It is essential that they have cash coming into their business, and right now they don't. Do you think we'll see a lot of chains go out of business, a lot of independents?

BRENT LANG: Well, right now they're-- they're going through the stimulus bill to see if they got the kind of loan guarantees that they were asking for. If they don't get those guarantees, they will absolutely go out of business. A lot of those companies have a lot of debt on their books because they acquired other theater chains, or they use debt to enhance their facilities you know, taking out seats and putting in luxury recliners.

Well, that's now causing a big cash crunch for them. And despite the fact that they've furloughed most of their staff, they still have an enormous amount of overhead. So they're experiencing a real liquidity crisis.

ALEXIS CHRISTOFOROUS: And Brent, as consumers now are squeezed, millions of Americans will be losing their jobs. They're going to be looking to cut corners here and to cut costs. Do you think that this is going to accelerate cord-cutting, and what's it going to mean for those media companies?

BRENT LANG: I absolutely think it's going to accelerate cord-cutting. And so the question is, if you're one of these companies like Disney that's bet very heavily on streaming on demand, you know, with Disney+, is the revenue that you might be able to get from that-- from that $5.99, $6.99 subscription price going to make up for the shortfall that you're going to have when people are cutting the cord en masse and you're losing a lot of revenues from other products like ESPN? I think nobody knows the answer to that, but it could further kind of imperil the entertainment industry right now.

ALEXIS CHRISTOFOROUS: All right. Brent Lang, "Variety's" executive editor, thanks for being with us this morning.