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Oscars Ratings Plummet, With Fewer Than 10 Million Tuning In

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LOS ANGELES — For the film industry, which was already fighting to hold its place at the center of American culture, the Nielsen ratings for Sunday night’s 93rd Academy Awards came as a body blow: About 9.85 million people watched the telecast, a 58 percent plunge from last year’s record low.

Among adults 18 to 49, the demographic that many advertisers pay a premium to reach, the Oscars suffered an even steeper 64 percent decline, according to preliminary data from Nielsen released on Monday. Nielsen’s final numbers are expected on Tuesday and will include out-of-home viewing and some streaming statistics.

The Academy of Motion Picture Arts and Sciences declined to comment.

The academy had been bracing for a sharp ratings drop. Award shows have been struggling mightily during the pandemic, and the Oscars have been on a downward trajectory for years. But some academy officials had hoped Sunday’s telecast still might crack 10 million viewers and attract as many as 15 million.

Humiliating? Certainly. But hundreds of millions of dollars are also at stake.

Under a long-term licensing deal with ABC, which is owned by Disney, the academy stands to collect roughly $900 million between 2021 and 2028 for worldwide broadcasting rights to the Oscars. The funds are crucial to the academy’s operations, especially at a time when it is spending to open a museum in Los Angeles. But some of that money is threatened. Payments to the academy include a guarantee and then revenue sharing if certain ad sales thresholds are reached.

So far, ABC has been able to keep ad rates high because of the fragmentation of television viewing. Oscars night may be a shadow of its former self, but so is the rest of network television; the ceremony still ranks as one of the largest televised events of the year. Google, General Motors, Rolex and Verizon spent an estimated $2 million for each 30-second spot in Sunday’s telecast, only a slight decline from last year’s pricing, according to media buyers. ABC said on Thursday that it had sold out of its inventory.

ABC does not guarantee an audience size to Oscar advertisers, thus removing any potential for so-called make-goods (additional commercial time at a later date) to compensate for low ratings.

Some people in the entertainment industry, whether out of optimism or denial or both, believe award shows are going through a temporary downturn — that declining ratings for stalwarts like the Emmys (a 30-year low) and the Screen Actors Guild Awards (down 52 percent) reflect the pandemic, not a paradigm shift. Without live audiences, the telecasts have been drained of their energy. The big studios also postponed major movies, leaving this year’s awards circuit to little-seen art films.

The most-nominated movie on Sunday was “Mank.” It received 10 nods. Surveys before the show indicated most Americans had never even heard of it, much less watched it, despite its availability on Netflix. “Mank,” a love letter to Old Hollywood from David Fincher, won for production design and cinematography.

Still, the Oscars have been on a downward slide since 1998, when 57.2 million people tuned in to see “Titanic” sweep to best-picture victory.

Many factors have been undercutting the ratings, starting with the delivery route. Old broadcast networks like ABC are no longer that relevant, especially to young people. (One awards show that is actually growing is the Game Awards, which celebrates the best video games of the year and is streamed on platforms like YouTube, Twitch and Twitter.)

In many cases, analysts say, the telecasts are too long for contemporary attention spans. The ceremony on Sunday was one of the shorter ones in recent years, and it still ran 3 hours 19 minutes. Why slog through all that when you can catch snippets on Twitter? On Sunday, video from the ceremony showing Glenn Close twerking to “Da Butt” went viral.

Increasingly, the ceremonies are less about entertainment honors and more about civic issues and progressive politics, which inevitably annoys half the audience. Regina King, a previous Oscar winner and the director of “One Night in Miami,” acknowledged as much at the top of the show.

“I know that a lot of you people at home want to reach for your remote when you feel like Hollywood is preaching to you,” she said. “But as the mother of a Black son, I know the fear that so many live with, and no amount of fame or fortune changes that.” A half-dozen honorees followed her lead and spoke about issues like racial justice and police brutality.

Awards show fatigue is also a factor. There are at least 18 televised ceremonies each year, including the Grammys (down 53 percent) and Golden Globes (down 62 percent). Still, the Oscars ratings plunge in recent years has been more dramatic, and the Grammys is closing in on becoming the most-watched awards show, once an inconceivable notion. It had nearly 9 million viewers for its telecast last month.

The academy itself has played a role in the show’s demise, bungling efforts to make it more relevant (hastily announcing a new category honoring achievement in “popular” films and then backtracking) and refusing ABC’s plea to reduce the number of Oscars presented during the show.

On Sunday, the proceedings were notably subdued — almost the opposite of a big-tent awards show. The best song performances were moved to the preshow. Film clips were scaled back. Comedy bits were scant. A lengthy section of the show was dedicated to the Motion Picture & Television Fund, a charity that provides housing and health care for Hollywood seniors.

A spokeswoman for the academy said the producers of the Oscars were not available on Monday to discuss their decisions.

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Oscars 2021: What to Watch For

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LOS ANGELES — Preventing the TV ratings from plunging to an alarming low, while celebrating movies that, for the most part, have not connected widely with audiences. Attempting to jump-start theatergoing when most of the world is more than a year out of the habit. Integrating live camera feeds from more than 20 locations to comply with coronavirus safety restrictions.

This is going to be one hard-working Academy Awards ceremony.

The surreal 93rd edition — a stage show broadcast on television about films mostly distributed on the internet — will finally arrive Sunday night. The Academy of Motion Picture Arts and Sciences delayed the event, which typically takes place in February, in hopes of outrunning the pandemic. Still, the red carpet had to be radically downsized and the extravagant parties canceled.

The night could go down in Hollywood history for happier reasons, however. The famed “and the Oscar goes to” envelopes could contain these names: Chadwick Boseman, Viola Davis, Daniel Kaluuya and Yuh-Jung Youn. If that happens, as some awards handicappers have predicted, it would be the first time that people of color swept the acting Oscars — an indication that the film industry has kept its promise in response to the #OscarsSoWhite movement and implemented meaningful reforms.

Voters, of course, could always veer in other directions. Is this the year that Glenn Close, a supporting actress nominee for “Hillbilly Elegy,” finally gets to take home a little gold dude? Or will she tie Peter O’Toole’s sad record for eight winless nominations? Carey Mulligan (“Promising Young Woman”) or Frances McDormand (“Nomadland”) could edge past Davis (“Ma Rainey’s Black Bottom”) to win best actress. And a posthumous best actor win for Boseman (“Ma Rainey’s Black Bottom”) has lately been less of a sure thing thanks to a surge of academy support for Anthony Hopkins (“The Father”).

In other words, it could be another Lucy-pulling-away-the-football moment for those who hope the film academy is on the verge of revealing itself as a definitively progressive organization. (Kaluuya is considered a lock for supporting actor for his performance in “Judas and the Black Messiah.”)

Here are three more things to consider before the ABC telecast, which begins at 8 p.m. Eastern time.

Netflix received its first Oscar nomination in 2014 for “The Square,” a feature documentary about the Egyptian revolution. Since then — in large part because of copious amounts of money spent on awards campaigns — the streaming giant has come to dominate the nominations. It amassed 36 this year, more than any other company, with its black-and-white love letter to Old Hollywood, “Mank,” directed by David Fincher, receiving 10, more than any other film.

But Netflix and its sharp-elbowed awards campaigners keep whiffing in the end.

Last year, the company’s best-picture hopes rested on “The Irishman.” It failed to convert even one of its 10 nominations into a win. In 2019, Netflix pushed “Roma.” It won three Oscars, including one for Alfonso Cuarón’s direction, but lost the big prize.

On Sunday — despite the pandemic hastening the rise of streaming services — Netflix is poised to three-peat as a best-picture loser, with its two nominees, “Mank” and “The Trial of the Chicago 7,” expected to be eclipsed by “Nomadland,” about a grief-stricken woman retreating to the margins of society. It hails from Searchlight, a division of the Walt Disney Company.

There is a chance that women will shine in both writing categories.

Emerald Fennell is the favorite to win the Oscar for best original screenplay for “Promising Young Woman,” a visceral revenge drama, having triumphed at the Writers Guild Awards. Fennell, a first-time nominee, would be the first woman to win solo in the category since Diablo Cody (“Juno”) in 2007. As for adapted screenplay, Chloé Zhao (“Nomadland”) is in a tight race with Florian Zeller (“The Father”). If Zhao joins Fennell in the winner’s column, it will be the first time that two solo women win the writing prizes in the same year.

Zhao’s big moment, however, will come toward the end of the ceremony, when she is expected to win the best director Oscar. In 93 years of the Academy Awards, only one woman, Kathryn Bigelow, has ever won. The category has also been dominated over the decades by white men, giving recognition of Zhao, who is Chinese, even greater meaning.

Steven Soderbergh is not your usual Oscar producer, which is why he may be the perfect choice for this very unusual year.

As a director who is constantly pushing boundaries with form, subject matter and scope, he is seemingly always on the lookout for a new challenge. And what could be a bigger hurdle than producing the Academy Awards in the middle of the pandemic? He and his producing partners for the event, Stacey Sher and Jesse Collins, have eschewed Zoom and implemented enough protocols to enable a mask-free environment for the nominees.

Mr. Soderbergh also keeps referring to the show as a three-act film. The telecast’s writing staff includes the “Surviving R. Kelly” filmmaker Dream Hampton and the veteran writer-director Richard LaGravanese (“The Fisher King”). Presenters are being referred to as “cast members.” (They include Zendaya, Brad Pitt and Bong Joon Ho, last year’s winner for best director.)

The Dolby Theater, which holds more than 3,000 people and has been the home of the Academy Awards since 2001, will not be the epicenter of the telecast. This year, with just the nominees and their guests in attendance, Union Station — the Art Deco, Mission Revival transit hub in downtown Los Angeles — will serve as the main venue.

And if it’s the song performances you love most, then be sure to tune in to the pregame show, since those five performances have been kicked out of the main event.

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HBO Max Gains Traction in a Crowded Field

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AT&T added 2.7 million new customers to HBO and HBO Max in the first quarter, a boost for the company’s new streaming effort in an increasingly crowded field.

The company’s WarnerMedia division, which includes HBO, recorded $8.5 billion in revenue for the period, a 9.8 percent jump over last year, when theater sales and advertising revenue plummeted during the pandemic. Led by the chief executive Jason Kilar, WarnerMedia also includes the cable networks CNN and Turner and the Warner Bros. film studios.

HBO is the cornerstone of AT&T’s media strategy, and the company sees HBO Max as a way to keep its mobile customers from fleeing, offering the streaming platform at a discount to its phone subscribers.

In its report on the year’s first quarter, AT&T stopped disclosing the number of active HBO Max users, obscuring how many people are actually tuned into the new streaming service.

Overall, AT&T counted 44.1 million subscribers to HBO and HBO Max in the United States as of the end of March, a gain of 2.7 million from the previous quarter. Before it stopped breaking out the HBO Max subscriptions, in December, it said it had a total of 41.5 million subscribers, including 17.1 million for the streaming service, 20 million for HBO on cable, and the rest coming from hotels or other deals.

It’s likely that HBO Max drove the gain in the quarter, which is notable given how competitive the streaming universe has become. HBO Max is also the most expensive of the various major streaming platforms, at $15 a month. Netflix, which reported earnings on Tuesday, remains the leader, with 67 million customers in the U.S. and nearly 208 million in total.

Netflix’s dominance has started to wane, in part because of newer entrants like HBO Max and Disney+. Netflix added four million new subscribers in the quarter, with a little more than 400,000 in the U.S.

Netflix chalked up the comparatively sluggish growth to the production slowdown that came when Hollywood studios largely stopped making new shows and films during the pandemic. The company said it expected a more successful second half of the year, when returning favorites and highly anticipated films become available.

In the case of HBO Max, the streamer likely got a boost from an unorthodox strategy championed by Mr. Kilar: The sibling company Warner Bros. plans to release its entire lineup of 2021 films on HBO Max on the same day they’re scheduled to appear in theaters. The announcement rumbled throughout Hollywood, angering agents and filmmakers who stood to lose out on crucial bonuses and commissions by short-circuiting the old theatrical release schedule.

Mr. Kilar has said the company will likely go back to a more traditional distribution plan starting next year. For the rest of 2021, he is counting on the film slate — which included the recent releases of “Zach Snyder’s Justice League” and “Godzilla vs. Kong,” as well as the Friday premiere of “Mortal Kombat” — to help drive people to HBO Max.

The company also plans a global expansion of HBO Max starting this June, along with a lower-cost version of the service that will include commercials. The company has about 19.7 million HBO customers overseas that it hopes to convert into HBO Max subscribers.

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Steve Gilula and Nancy Utley Leaving Searchlight Pictures

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LOS ANGELES — One of corporate Hollywood’s most enduring double acts is calling it quits.

Steve Gilula and Nancy Utley, senior executives at Searchlight Pictures for 21 of its 27 years, who shaped global culture with Oscar-winning hits like “12 Years a Slave,” “Black Swan,” “The Grand Budapest Hotel” and “Slumdog Millionaire,” announced their surprise retirement on Tuesday. They will leave the Disney-owned specialty studio by the end of June, adding to a conspicuous changing of the guard at Walt Disney Company.

“You don’t want to be the show that stays on the air two seasons too long,” Ms. Utley said. “Get out while everything is still going well.”

She was joking — mostly. Searchlight has long been the gold standard of art film studios, packing its slate with diverse offerings long before Hollywood got the memo, and thriving in a changing marketplace — the DVD collapse, the rise of streaming competitors — even as once-formidable competitors like the Weinstein Company imploded. If the latest Searchlight success, “Nomadland,” wins the Academy Award for best picture on Sunday, as many expect, Mr. Gilula, 70, and Ms. Utley, 65, will have taken the top prize in four of the last eight ceremonies. That is a run unmatched by any specialty studio, even Miramax, which at its height won three best-picture Oscars.

Searchlight’s previous best-picture winners have been “The Shape of Water” (2018), “Birdman” (2015) and “12 Years a Slave” (2014). “Slumdog Millionaire” won in 2009.

At the same time, however, Sunday could mark a symbolic shift in Hollywood: If Searchlight loses, it will likely be to Netflix, which could win its first Academy Award for best picture for “The Trial of the Chicago 7.” Netflix has been chasing such a victory for years as the ultimate symbol of supremacy in Hollywood.

Searchlight has been rising to the challenge of streaming. “Nomadland,” from the Chinese-born filmmaker Chloé Zhao, was released in theaters and on Hulu, a Disney streaming service. But competing with Amazon, Apple and Netflix — and their seemingly bottomless wallets — for talent and material has become harder and harder. That has made the art film market more precarious for traditional studios like Searchlight, which will now be run by David Greenbaum and Matthew Greenfield, the current presidents.

“Every time my contract was up, to be candid, I always questioned whether I had the intestinal fortitude to fight through the next set of changes,” Mr. Gilula said. “Ultimately, pride and loyalty kept me going. And there has always been another fantastic film in the pipeline. Well, maybe after ‘Shape of Water,’ maybe after ‘Three Billboards.’ But this is it. With ‘Nomadland,’ which has shown that we haven’t lost our edge at all, adapting quickly to the pandemic, there is a great feeling of fulfillment.”

Mr. Gilula and Ms. Utley are leaving amid a broader brain drain at Disney. Robert A. Iger, executive chairman, is departing in December after 26 years at the company. Alan F. Horn, the top creative executive at Walt Disney Studios, has been edging toward retirement, as has Alan N. Braverman, Disney’s top lawyer. Jayne Parker, Disney’s powerful human resources chief, will step down in June after 33 years at the company.

“The people you mentioned have contributed mightily — myself excluded; I’m not talking about myself in this regard — to the success of the company, and in doing so have groomed people behind them who will take over the mantle,” Mr. Iger said. “I try to ease people’s concerns as much as possible. It’s certainly way too premature to express concern.”

Searchlight was one of the assets that Disney acquired from Rupert Murdoch in 2019. Mr. Iger, who orchestrated the deal, heaped praise on Ms. Utley and Mr. Gilula. “It takes a really deft hand to bring these smaller but extremely high-quality films to market, and they have Ph.D.’s in it,” he said.

Does their retirement signal a change in direction for Searchlight? The mini-studio, which has about 100 employees, is beloved by fans of grown-up cinema, especially as Hollywood has leaned harder toward all-audience franchise films.

“No, not at all,” Mr. Iger said. “We haven’t been particularly vocal about this, but we intend for Searchlight to play a big part in supplying content, not just for theaters but for our streaming platforms. We are going to invest more and more. Expect more output rather than less.”

Searchlight’s coming films include “Summer of Soul,” a documentary about the 1969 Harlem Cultural Festival from Ahmir Thompson, better known as Questlove; Wes Anderson’s “The French Dispatch,” a comedy-drama-romance; and Guillermo del Toro’s “Nightmare Alley,” about a manipulative carnival worker. Searchlight also has six television shows on the way with stars and directors that include Keira Knightley, Yorgos Lanthimos (“The Favourite”) and Darren Aronofsky.

All have worked with Searchlight before.

“When I started in the American film industry in ’93-’96, I heard often the word ‘family’ to describe film studios: ‘We’re a family here,’” Mr. del Toro said. “In my experience, what they must have meant was the Manson family. But not with Searchlight. It is a true family, one that nurtures you.”

Mr. del Toro, who wrote and directed “The Shape of Water,” continued: “I remember pitching them the story — it was a huge gamble! not something most studios would make! — and by the end I got weepy, and then they got weepy, and they said, ‘Go make your movie.’”

Ms. Zhao said she was impressed that Mr. Gilula and Ms. Utley met with her for an hour every week “for months” as Searchlight worked toward a pandemic-suited distribution and marketing plan for “Nomadland,” which stars Frances McDormand as a grief-stricken van dweller.

“I always hear horror stories about how, at some studios, once you finish your film you don’t know where it is going — what is happening with it,” Ms. Zhao said. “Not only was I informed every week at Searchlight, I was allowed to be a huge part of making all of the decisions.”

Mr. Gilula and Ms. Utley agreed to a theatrical release, even though it was a money-losing proposition because of the pandemic. “They don’t say, ‘We have a system that works for us so that is how you are going to work,’” Ms. Zhao said. “They really listened to us and trusted us.”

Searchlight was founded in 1994 by Thomas E. Rothman, who is now Sony’s movie chief. At the time, specialty films — auteur-minded cinematic trinkets — were raking in money at the box office. “The Full Monty,” released by Searchlight in 1997, cost $3.5 million to make and took in $258 million worldwide (or nearly $430 million in today’s money). Over the years, market conditions changed markedly, particularly in the late 2000s, when an economic downturn dried up production financing.

As competitors like Rogue Pictures, Paramount Vantage, Picturehouse and Miramax faded away, Ms. Utley and Mr. Gilula kept Searchlight vibrant. Her specialty has been marketing, scripts and casting. He is a distribution ace who co-founded the Landmark Theaters chain in 1974. “There has never been a spreadsheet that Steve didn’t love,” Ms. Utley said dryly.

Aside from exquisite cinematic taste, the two executives, who both hail from the Midwest, are the rarest of species in Hollywood: genuinely nice people. Neither craves the spotlight. They are widely known in the film industry for campaigning for awards with integrity.

“Hopefully, we have set an example,” Mr. Gilula said, “showing that you don’t have to be the other kind of person to be successful in this business.”

Both insisted that Disney’s takeover of Searchlight (called Fox Searchlight while owned by Mr. Murdoch) played no role in their decision to retire.

“We were frustrated at Fox because Fox just didn’t have a streaming strategy and was very slow to react to marketplace changes,” Ms. Utley said, adding, “I think the transition to Disney has gone really smoothly, which is one reason I have all the faith in the world about the future of Searchlight.”

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With ‘Knives Out’ Deal, Netflix Signals It’s in the Franchise Business

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“The pandemic has really put the streamers head to head with theatrical distribution,” said James Moore, chief executive of Vine Alternative Investments, an asset manager focused on the entertainment industry. “Now you’re seeing the economics really accelerate towards the streamers, and they have both the wherewithal and the strategic need to retain those gains.”

“Knives Out,” with a cast led by Daniel Craig and Chris Evans, earned $311 million at theaters, close to half of it in international markets — the biggest growth opportunity for streaming services. It was one of the few box office winners in the past few years not based on a comic book or on existing intellectual property that was tied up in a lengthy studio deal.

(John Krasinski’s “A Quiet Place,” from 2018, is another example. But that R-rated horror film was owned by Paramount, and it was such a box office boon that its sequel was one of the few films the studio held on to during the pandemic. It is scheduled to come out in theaters on Memorial Day weekend.)

For the original “Knives Out,” Mr. Johnson’s representatives at Creative Artists Agency negotiated a one-film licensing agreement with the film’s distributors, MRC and Lionsgate. That deal gave Mr. Johnson and his producing partner, Ram Bergman, control of the franchise and the right to shop future iterations to other parties. (Mr. Craig, who played the arch Southern detective Benoit Blanc in the film, is also an equity participant in the deal.)

The movie is part of a tried-and-true genre — the star-studded whodunit — that has been reinvented in recent years. “Murder Mystery,” starring Adam Sandler and Jennifer Aniston, was a hit for Netflix in 2019. Kenneth Branagh’s reimagining of Agatha Christie’s “Murder on the Orient Express” in 2017 worked well for Disney’s Fox division, pulling in $352 million, including $250 million from the international market. (A follow-up, “Death on the Nile,” has been pushed to 2022, partly because one of its stars, Armie Hammer, has been tarnished by a recent sex scandal.)

The “Knives Out” deal also highlights how much easier it is for a streaming service to exploit an already known title than to build one itself. While Netflix scored big with the 2018 Sandra Bullock film “Bird Box” — it said 89 million households had tuned in to watch the film within four weeks of its release — it is just now gearing up for a sequel, a Spanish-language version that won’t feature the original star.

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The Oscars Are a Week Away, but How Many Will Watch?

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Mr. Soderbergh did acknowledge that there is only so much the producers can do.

“People’s decision-making process on whether to watch or not doesn’t seem to be connected to whether or not the show is fantastic or not,” he said, pointing to the strong critical response for this year’s Grammys, which notably featured a risqué performance by Megan Thee Stallion and Cardi B.

The Oscars telecast, on the other hand, saw its ratings peak in 1998, when 57.2 million people tuned in to see the box office juggernaut “Titanic” sweep to best-picture victory. Since the turn of the century, the most highly rated year was 2004, when the academy honored another box office behemoth, “Lord of the Rings: The Return of the King.”

Analysts point to a litany of challenges propelling the decline. Old broadcast networks like ABC are not as relevant, especially to young people. The ceremonies, even if kept to a relatively brisk three hours, are too long for contemporary attention spans. Last year’s Oscars ran three hours and 36 minutes (the equivalent of 864 videos on TikTok).

Why slog through the show when you can just watch snippets on Twitter and Instagram?

Moreover, the Oscars have become overly polished and predictable. “The Oscars used to be the only time when you got to see movie stars in your living room, and very frequently it was a hoot,” Ms. Basinger, the Hollywood historian, said. “Some seemed a little drunk. Some wore weird clothes. A few had hair hanging in their face.”

Increasingly, the ceremonies are less about entertainment honors and more about progressive politics, which inevitably annoys those in the audience who disagree. One recent producer of the Oscars, who spoke on the condition of anonymity to discuss confidential metrics, said minute-by-minute post-show ratings analysis indicated that “vast swaths” of people turned off their televisions when celebrities started to opine on politics.

And there is simply awards show fatigue. There are at least 18 televised ceremonies each year, including the MTV Video Music Awards, BET Awards, Teen Choice Awards, Academy of Country Music Awards, Billboard Music Awards, CMT Music Awards, Tony Awards, People’s Choice Awards, Kids’ Choice Awards and Independent Spirit Awards.

With ratings expected to tumble for the coming telecast, ABC has been asking for $2 million for 30 seconds of advertising time, down about 13 percent from last year’s starting price. Some loyal advertisers (Verizon) are returning, but others (Ferrero chocolates) are not.

“We’re really not getting much advertiser interest,” said Michelle Chong, planning director at Atlanta-based agency Fitzco, “and it’s not something we’ve been pushing.”

Tiffany Hsu contributed reporting.

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Movie theater chain in Los Angeles, forced to close by the pandemic, will not reopen.

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ArcLight Cinemas, a beloved chain of movie theaters based in Los Angeles, including the historic Cinerama Dome in Hollywood, will permanently close all its locations, Pacific Theatres announced Monday, after the pandemic decimated the cinema business.

ArcLight’s locations in and around Hollywood have played host to many a movie premiere, in addition to being favorite spots for moviegoers seeking out blockbusters and prestige titles. They are operated by Pacific Theatres, which also manages a handful of theaters under the Pacific name, and are owned by Decurion.

“After shutting our doors more than a year ago, today we must share the difficult and sad news that Pacific will not be reopening its ArcLight Cinemas and Pacific Theatres locations,” the company said in a statement.

“This was not the outcome anyone wanted,” it added, “but despite a huge effort that exhausted all potential options, the company does not have a viable way forward.”

Between the Pacific and ArcLight brands, the company owned 16 theaters and more than 300 screens.

The movie theater business has been hit particularly hard by the pandemic. But in recent weeks, the majority of the country’s largest theater chains, including AMC and Regal Cinemas, have reopened in anticipation of the slate of Hollywood films that have been put back on the calendar, many after repeated delays due to pandemic restrictions. A touch of optimism is even in the air after the Warner Bros. movie “Godzilla vs. Kong” has generated some $70 million in box office receipts since opening over Easter weekend.

Still, the industry’s trade organization, the National Association of Theatre Owners, has long warned that the punishing closures were most likely to affect smaller regional players like ArcLight and Pacific. In March, the Alamo Drafthouse Cinema chain, which operates about 40 locations across the country, announced that it had filed for Chapter 11 bankruptcy protection but would keep most of its locations operational while it restructured.

That does not seem to be the case for Pacific Theatres, which, according to two people with knowledge of the matter, fired its entire staff on Monday.

The reaction to ArcLight’s closing around Hollywood has been emotional, including an outpouring on Twitter.

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Zach Avery Charged With Running Million Dollar Ponzi Scheme

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The 2017 film “Bitter Harvest” would not, by many definitions, be considered a success.

“It’s a bad sign when even the prayers in this movie are crappy,” observed one reviewer, who contributed to the film’s 15 percent critic rating on Rotten Tomatoes.

It pulled in less than $600,000 in the United States. But that did not mean it did not still have moneymaking potential abroad. All investors needed to do was help buy the rights to distribute it and a number of other films in Latin America, Africa and New Zealand. Major distribution deals with HBO and Netflix were on the cusp of being formalized, they were told. Once those fell into place, the investors would get returns of at least 35 percent.

That is the essence of what the Securities and Exchange Commission and federal prosecutors are calling a Ponzi scheme run by Zachary J. Horwitz, a not particularly famous actor with a rather extravagant home. Mr. Horwitz, who went by the stage name Zach Avery, was arrested on Tuesday on wire fraud charges. He is accused of defrauding investors of at least $227 million and fabricating his company’s business relationship with HBO and Netflix.

“We allege that Horwitz promised extremely high returns and made them seem plausible by invoking the names of two well-known entertainment companies and fabricating documents,” Michele Wein Layne, director of the S.E.C.’s Los Angeles regional office, said in a news release on Tuesday.

Prosecutors said that correspondence Mr. Horwitz had forwarded to clients, which featured HBO and Netflix email addresses, was as fictitious as the subject matter of his most recent film, the horror movie “The Devil Below” (Rotten Tomatoes critic score: 0 percent). Mr. Horwitz did not star in any of the 50 or so films he promised could make investors millions, according to Thom Mrozek, a spokesman for the U.S. Attorney’s Office in Los Angeles.

Mr. Horwitz was in jail on Wednesday, Mr. Mrozek said. Attempts to reach other employees of One in a Million Productions, whose website features the tag line “When Odds Are One in a Million. Be That One,” were unsuccessful. (Later Wednesday afternoon, the site had been taken down.)

Mr. Horwitz’s lawyer, Anthony Pacheco, did not respond to a request for comment.

The Ponzi scheme began to unravel when an investor wanted money refunded in 2019 and could not get it, Mr. Mrozek said.

For several years, 1inMM — as the company styles its name — found ways to pay investors, according to the S.E.C. Court documents do not list all of the films investors thought they had helped buy rights to, but the complaint features an image from 1inMM’s “library”; the 1989 Jean-Claude Van Damme movie “The Kickboxer” and the 2013 romantic comedy “The Spectacular Now” are included.

The way that money can be made in the movie distribution world is to say, “I’ll give you $100,000 for Latin America rights,” for example, Mr. Mrozek said, adding, “I go to HBO or whomever and say, ‘Give me $200,000 to show the movie.’”

It’s possible that the company did succeed in buying international distribution rights to a handful of films or even that it started with good intentions, Mr. Mrozek said. But what it did not have was the relationship with HBO and Netflix that Mr. Horwitz told investors it did. It was that relationship that he said essentially guaranteed them returns of 35 percent or more within six months or a year.

“I believed that if HBO was involved, my investment was safe,” one investor told the S.E.C.

At first, Mr. Horwitz was able to follow through on his promises. In typical Ponzi scheme fashion, earlier investors got money from newer investors, Mr. Mrozek said. His clients could go on believing that investing in viewings of “The Kickboxer” in New Zealand and Latin America was smart.

But at some point, there wasn’t enough money flowing in to maintain the illusion — even with the help of the Johnny Walker Blue Label scotch Mr. Horwitz sent to principals, according to F.B.I. agent John Verrastro, who outlined the scheme in a complaint. Mr. Horwitz was also inappropriately using investor funds on a $5.7 million home and $700,000 in fees for a celebrity interior designer, according to the S.E.C.

Since December 2019, 1inMM has defaulted on more than 160 payments, according to court documents. One investor in Chicago, who was owed more than $160 million in principal and $59 million in profits, wanted his returns and could not get them, Mr. Mrozek said. That investor contacted the authorities.

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