Russell Crowe's 'Unhinged' is the first major movie to open in US theaters during the pandemic. The studio head behind it explains his strategy.

• Solstice Studios' "Unhinged," which hits theaters Friday, is the first new wide release in the US in more than five months, as theaters reopen amid the coronavirus pandemic.
• Business Insider talked with Solstice CEO Mark Gill about why the company is releasing "Unhinged," the studio's first movie, at this moment and the potential safety concerns audiences may face at a theater.
• Gill also talked about the future of the theater industry and where Solstice fits as major studios experiment with digital releases.

Movie theaters in the US have been closed for more than five months as the coronavirus pandemic ravages the entertainment industry.

That changes this week when major chains like AMC Theatres and Regal Cinemas reopen their doors to the public in regions where local governments have allowed, with health guidelines in place, such as limited seating and mask wearing.

But will that be enough to entice audiences to return? That's the hope of Mark Gill, the president and CEO of Solstice Studios.

Solstice, a company founded in 2018, is set to release its first movie this weekend: "Unhinged," a Russell Crowe-starring road-rage thriller that was moved up from a September 4 release and then delayed multiple times amid the pandemic.

Now, Solstice's first movie will also be a test for the releases that follow.

Business Insider talked with Gill about why Solstice is releasing the movie now and what the future of movie theaters may look like.

This interview has been lightly edited for clarity.

Travis Clark: What was going through your head when theaters shut down? Did you think we'd still be dealing with this five months later?

Mark Gill: The problem with this whole thing is that nobody knows anything, right? [laughs] You didn't know if it would be a few months or a few years at that early stage. It looked pretty bleak. California shut down early and then unfortunately blew the reopening, but you saw other places like New York that were devastated. It was really scary. So, for a while, we were hiding in the bunker.

Eventually, by May, we thought there might be a way out of this. As it relates to our movie, we were sitting on a September 4 date, but a number of spring movies were delayed, including "A Quiet Place 2" and it landed right on our date [it has since been delayed to next year]. That was a super tanker coming and we're a little speed boat about to get crushed [laughs]. So we started looking later in the fall and winter and even into the spring of next year, but it looked really crowded. There were a number of movies obviously there from pre-COVID, but then also the postponed movies. It didn't look to us that there would be any room for us to release our movie later, so that's when we thought about going earlier.

Clark: This movie has a pretty moderate budget [$33 million]. Was there ever any discussion to release it to an alternative to theaters, like digital or streaming?

Gill: No, we set the company up to be a theatrical company. And we had sold this and other movies internationally to other distributors and one of the requirements of those contracts was to release the movie wide in the US in theaters.

Clark: What are your expectations in terms of the box office this weekend and what is the long-term strategy?

Gill: I have no clue what the first weekend holds. In the full run of North America, if we get to $30 million or better, we're happy. The question is, how do you get there? And there are a number of different examples to point to because we've already opened the movie in 20 countries around the world. Australia and the Netherlands were strong, the rest were solid.

In Australia, it's made about $2 million, which is a good result, but it took a while to get there. We're a little more than three weeks in. But it has room because there aren't going to be 15 new releases every month.

The European example is a little more modest. Canada is the third way to think about it. Canada restricted theaters to no more than 50 people per theater, which is pretty stringent. In the US, it seems like it will be mostly 50% capacity. The average theater size is around 350 people, so that's 175 people per theater versus 50. The $601,000 we made in Canada [this past weekend] is modest in normal times, but with only 50 seats per theater, that seems good.

It's impossible to know if any of this is applicable to the US. But Canada normally drafts pretty heavily off of US marketing spend and we held 60% of our US marketing spend in the last week because the date kept moving and we didn't want to waste all the money.

This is just the most baffling thing ever. There are no comparisons. We'll be somehwere near 2,000 screens this weekend and a few hundred more next weekend. It's possible, I suppose, that we could have a small drop here or hold steady. There's a reason nobody else did this. There are so many unknowns.

Clark: I'd be remiss if I did not ask about the public health concerns of releasing a movie right now.

Gill: There's a lot of be said. My first call about this was to John Fithian [president of the National Association of Theatre Owners] and to epidemiologists that have been advising them. That made us feel more comfortable, along with the strictness of the protocols being applied nationwide — masks, social distancing, online ticketing, and so on. There were a couple things that the epidemiologists said that I thought were quite interesting. You've got filtration systems that are much better than most offices and if you didn't, the theaters would stink. And there's nobody talking, or singing, or whatever you would do in other venues, from churches to gyms to bars. Everybody is looking in the same direction, not facing each other.

All of those things combined for these people to say that it's not no risk, but it's moderate risk. If you think about it, every time that you get in your car, that's the riskiest thing we do. It's much more risky than getting on a plane. But we've accustomed ourselves to take a bit of risk because we want to get out of the house. It's less risky than a bar or restaurant. But if you want no risk, you should stay at home.

Clark: Obviously there's plenty of criticism against studios trying to release movies to theaters now. Some experts say going to a movie theater is the last thing you should do right now.

Gill: Well, I just don't think that's true. Going to a sporting event or a bar is the last thing you should do right now. There's no social distancing and in many cases no masks. I just don't agree with that.

Clark: People will be eating and drinking in a theater without masks.

Gill: What's supposed to happen is that people can take them off while eating and then put them back on when they're not, but you're correct to say that it would be a concern. Hopefully is that it would be well enforced. What I'm hearing from theater owners is that they'll have people to enforce the safety provisions.

We did a survey in May, asking about July, to see whether people would go and in that case 80% [of 2,000 moviegoers] said yes. But National Research Group has done a weekly poll that looks at how comfortable people are going to the movies based on the public-health situation. The more clarity people had on the details of the safety protocols, the more comfortable they were. At a certain point, people are willing to take modest risks.

Clark: I guess that depends on the research you're looking at. Throughout all of this, I've seen surveys that have varied in terms of how comfortable people are, depending on the month, the demographics, whatever.

Gill: If you're asking moviegoers, it's very different than if you ask all Americans. If I ask my brother whether he wants to go to the movies, his answer is the same this summer as last summer, which is "no" [laughs]. So to me, the most interesting thing to look at is moviegoers, because there are people who go six times a year or more who aren't massive attendees, but they're comfortable to go. The most telling statistic is whether moviegoers would turn up.

Clark: Morning Consult released a new survey of 2,200 US adults this week, and only 17% said they would be comfortable going to a theater right now.

Gill: That's the problem with Morning Consult. I have to call them out on this, but their surveys are sh--. What are they doing? They're asking all Americans? You've got to be fu--ing kidding me. It's just not applicable. We have a former professor of statistics who is our head of marketing, and he looked at that data and said it was a poorly designed study.

Clark: Of course avid moviegoers are going to say they're ready to go to a theater. But in a real-life situation, are they really going to be comfortable?

Gill: We're about to find out. When polling is done, and it's all Americans versus regular voters, the differences are significant. And it's regular voters that predict who wins. It's the same for the movie business. Every poll I've ever seen that's done of "all Americans" is not predictive at all of what will happen. It may be the broad sentiment across the country but it's not relevant.

Clark: One more question on this topic then we can move on: broadly, what do you say to those who are critiquing studios for releasing movies right now and potentially putting people at risk?

Gill: There's a little risk every morning when you wake up. There's a lot of risk when you get in your car every day. I view movie theaters as a relatively moderate risk with tremendous ability to mitigate that risk.

Clark: Well, I appreciate the candor [laughs]. Moving on, how did you approach the marketing for this movie?

Gill: There were certain things not available, like in-theater advertising. Up until recently, sports on television were not available. Outdoor advertising isn't what it's like in normal times. But because not all of the country is open, we've doubled down on local markets. People might be confused about whether theaters are opening their town, so we've done a lot with local media in each market. Candidly, the rest of it is the bread and butter of what you normally do: showing people enough of the movie through publicity clips or what have you so they can decide whether it's something they want to see. Seeing is believing.

Going first was not for the faint of heart but it had one big advantage. Normally on a movie this size you'd have 50 million impressions (non-paid advertising) in the media, whether it be through people like yourself or social media. We're up to 500 million on this movie. Obviously that's a function of the story being not just about this movie but also movie theaters opening.

Clark: Did you learn anything that may be applicable to future releases?

Gill: I'm not sure yet. We'll have to see what the results are. It's too early to tell.

Clark: Bouncing off of that, regarding the future, you said that Solstice is committed to theaters. But post-COVID, it seems like there will be a balance of theatrical and PVOD [premium video-on-demand] releases. AMC Theatres and Universal struck that deal [to shorten the theatrical window]. Disney is releasing "Mulan" straight to Disney Plus. Do you see that as the future and where does Solstice fit into that?

Gill: That's definitely where the trend is heading for the major studios, which is to have a mix of in-theater and video-on-demand. That's undoubted and I think COVID just accelerated it. You could see it coming.

Therein lies the opportunity. About 10 years ago, people said the mid-budget movie is dead. The theory was that everyone was moving toward either super tanker [big-budget blockbuster] movies or arthouse films. The middle got hollowed out. I thought that's where the opportunity was as long as you didn't spend $80 million to make them. And I've had a good run at it. That was evident this last fall when you had mid-budget hits like "Knives Out," "Hustlers," and "Downton Abbey." It doesn't look like those are dead.

I think you're right. There will be fewer wide-release movies in theaters and I think that means there is more opportunity for our movies to find an audience.

People say it's an "either/or." But it's an "and." Just because people like watching movies at home doesn't mean they don't want to leave their house.

Clark: Do you foresee Solstice ever making a pivot to streaming?

Gill: I don't. I guess you could say that anything is possible but at this point, for the next five years or so, I think the theatrical business looks like the place to be.

Clark: On that note, I know you're really focused on "Unhinged" right now, but do you have anything you want to tease?

Gill: We had a film on preproduction that got shut down, a Ben Affleck movie called "Hypnotic." It's a sci-fi thriller that we were going to film in Los Angeles in April. We're looking to try to get back to it this fall. We're looking to do three to five movies a year, but it takes a while to get going. If I had certainty on the others I would feel better, but they're still coming together. But the premise [for Solstice] is basically all wide-release movies with somebody starring that you'd heard of before, and generally speaking, in the $30 million to $60 million budget range. That's the game. It's what I've been doing for the last 10 years with a variety of movies and it's worked fine, so I might as well keep doing it.