Over the last year we’ve seen many aspects of our lives change dramatically in just a short period of time. Upon closings and restrictions brought on by the pandemic, practically every aspect of our lives has been changed in some way or another. Some of these changes are more minor, such as wearing a mask in public places or in large crowds. Other changes are much larger. Small businesses around the world have had to cut back on losses and close down for good due to revenue shortfalls and millions of people have lost their jobs. Perhaps one of the industries that has been affected the greatest has been the movie industry, particularly the movie theatres.
Last spring saw the closure of theatres around the nation brought on by state restrictions. For the span of several months, thousands of venues were dark. Some of the nation’s largest movie theatre chains, such as AMC and Cinemark, have announced massive losses as a result of their closures. Last week, AMC announced that they are facing a nearly 90% revenue loss in the third quarter of this year, bringing in only around $120 million in the last three months. Around this time last year, the chain had brought in $1.3 billion in the third quarter. The drastic change in the industry has led to those in the theatre business to get creative. Marcus Theatres, AMC and other large chains have begun offering the option of renting out the theatres to moviegoers, and will allow any movie of their choice to be played, not just those currently at the box office. But will this be enough to save the industry?
Even after theatres have begun to re-open nationwide, most are still struggling to fill their seats. This may be due to several factors: a large portion of the population might not feel comfortable returning to a large theatre, there is a lack of new and exciting movies being shown currently (many of the year’s most-hyped films have been postponed to later this year or 2021) or many people may have gotten used to at-home streaming services during lockdowns and see the value in paying for a few of these services rather than spending the same amount for one movie ticket. All of these factors compiled have created the perfect storm for the theatre industry to go bust.
Theatres had been struggling in recent years before COVID-19, due to the rise of on-demand streaming services such as Netflix and Hulu. Near the end of 2019 and the start of this year saw a bevy of new streaming services such as Disney Plus, HBO Max and Apple TV join an already competitive market of streaming looking for the attention of video consumers. The already-struggling theatre industry was not poised to keep pace with the new wave of on-demand video, and many in the business knew that physical theatres were on the decline. COVID-19 only accelerated this decline. Now more than ever, most people are willing to pay for two or three streaming services and stay in the comfort of their own homes to watch movies, as most of these services have all of the content one could ever ask for. In most cases, movies that are released in theatres will be on one of these services a few months after they leave theatres anyways. Some movie studios, such as Disney and Paramount, have begun bringing their content straight to their respective streaming services, or will sell the licensed content to the streamer whoever bids the most to have it on their platform. This seems to be the way of the future for most new movies.
The biggest appeal for the movie theatre industry is the environment of being in a physical theatre. The seating, lights and sound of the experience still appeal to many people. The lack of new and exciting movies currently showing and the fear of many people to return to a theatre will leave the business in shambles for quite some time to come. There is still hope for a rebound, but for the time being, movie theatres appear to be on the way out.