09/17/2020

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The Return of the Movie Theater



AMC Reopening in July


Yesterday, AMC Entertainment (AMC) announced plans to reopen most of its US and UK movie theaters in July. Shares of the company surged 14% on the news.

AMC owns and operates about 1,000 cinemas in 15 countries. The company shuttered all of its theaters in mid-March due to the coronavirus pandemic. By the company’s estimates, it lost between $2.1 billion and $2.4 billion in the first quarter of the year due to these closures.

Despite being battered by coronavirus, AMC is optimistic about the summer. The company is implementing new safety protocols to help customers feel safe returning to the movies. AMC and other theaters are also pegging their hopes on several new blockbusters set to be released in late July.

Theaters Implement New Safety Protocols


AMC recently reopened several of its Odeon Cinemas located in Norway. The theaters limited ticket sales to 25% capacity so people could social distance. The company reported 83% of those tickets were sold last weekend, and that food and beverage sales at the theaters were strong.

Analysts are on the edge of their seats waiting to see if American and British moviegoers will also feel comfortable returning to theaters when they reopen. About 30% of movie theater audiences are ages 50 and up. Since older people are generally at a higher risk of severe health problems if they catch coronavirus, this segment of moviegoers may be more hesitant to come back to theaters. However, in a survey conducted by the market research firm EDO, 75% of people said they would feel comfortable going to see movies if safety measures were put in place.

Theaters are implementing temperature checks for employees, buffers between seats, more showtimes to reduce crowds, sanitation measures, and other protocols to keep employees and moviegoers safe.

The Future of the Big Screen Release


The movie theater industry is also hopeful that several new releases will draw audiences back to the big screen. Christopher Nolan’s Tenet is scheduled to hit theaters on July 17, and Disney’s live-action Mulan comes out on July 24.

During the height of the pandemic, some studios had success releasing movies digitally instead of waiting for theaters to reopen. For example, Trolls World Tour, which became available to stream on April 10, generated almost $100 million worth of rental fees in just three weeks. This online release made Universal (CMCSA) more money in three weeks than the first Trolls movie made during five months in theaters. The Trolls World Tour digital release has caused some analysts to believe studios will shift to more digital releases even after the pandemic subsides.

However, other industry leaders are hopeful that classic movie theater releases are not going anywhere. In a March Washington Post op-ed asking Congress to help struggling movie theaters, Christopher Nolan wrote,

“When this crisis passes, the need for collective human engagement, the need to live and love and laugh and cry together, will be more powerful than ever…We don’t just owe it to the 150,000 workers of this great American industry to include them in those we help, we owe it to ourselves. We need what movies can offer us.”

The movie industry will be eagerly awaiting to see how these July theater reopenings will unfold and what that could mean for the future of how the world watches movies.


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