The Pandemic Changed Movie Theaters, Perhaps Forever
Movie Theaters Downturn: Before and During Pandemic
The pandemic’s lockdowns caused an economic downturn that drastically affected movie theaters, including reaching a 40-year low in revenue during 2020. Last year’s numbers marked a huge improvement, with revenue up 91%. Still, as case numbers have waned studies show 49% of moviegoers have stopped going to multiplexes, and around 8% are no longer going to movie theaters at all.
2021 did produce a major success story for movie theaters, in the form of Spider-Man: No Way Home, which recently became the third-highest grossing film of all time. Some market observers argue movies of this type intended for big screens are key to movie theater’s long-term prospects. Other executives argue it’s vital to promote that watching movies in a group setting is more enjoyable, keeping with the intended spirit of film as an artform.
AMC’s Pivot to Popcorn and NFTs
In response to the decline in ticket sales, some movie theater companies are looking into product diversification. AMC (AMC) is getting into the popcorn game. That seems like old news at first, except in this case the company’s talking about popcorn sales away from theaters.
Executives plan to boost sales at malls through popcorn kiosks and by partnering with food-delivery apps to bring microwaveable AMC popcorn into people’s homes. In an interesting twist, it could mean AMC profiting from people who choose to stay at home watching movies on Disney+ (DIS) or Netflix (NFLX). AMC has also announced plans to get into blockchain technology, including cryptocurrency and non-fungible tokens, or NFTs. Partnerships with movie studios could lead to film-specific NFTs in the future.
The Coming Attractions
Analysts say the movie theater business will certainly undergo changes as the pandemic wanes, and this will impact movie studios. One strategy that could become more widespread is known as “windowing.” This year some movie studios plan to release titles for a shorter window of time prior to their availability on streaming platforms, granting theaters limited exclusivity.
Some industry observers argue movie theater ticket sales will eventually recover to a greater degree. Part of this involves older moviegoers who may still be avoiding crowds amid COVID-19 concerns, and the assumption that they’ll eventually return once they become more comfortable with the climate. This 50-plus demographic also represents a significant amount of business. It’s an uncertain future for movie theaters as they contend with the rise of streaming platforms, and how that’s changed what it means to “go to the movies.”
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