Are Movie Theatres Doomed to Fail?
Even before the pandemic prevented people from crowding inside dark auditoriums with strangers, economists have long forecasted the imminent demise of the movie theatre industry. In 2017, for instance, AMC stock was valued at about $30, but had fallen to only $2.18 as of April 2020. Theatre attendance has also sharply declined since its heyday in the 1930s, where nearly sixty-five percent of Americans went to the movies each week. Attendance instead now sits at about ten percent per week.
The COVID-19 pandemic has only accelerated this trend: many massive movie theatre chains had to shut their doors; executives of these companies project that the pandemic may lead to a permanent fifteen to twenty-five percent decrease in ticket sales.
While most movie theatres barely staggered through the pandemic, streaming services like Netflix and Amazon Prime soared. Would-be audiences were confined to their homes for months on end, which heightened the use of streaming services. According to an analysis conducted by the Wall Street Journal, these streaming services saw their membership rise by fifty percent over the course of 2020 as people could only turn to their at-home screens for entertainment.
The CEOs of different cinema chains, such as Allan Reagan of Flix Brewhouse, are recognizing that they need to adapt and alter their business models to keep their operations profitable. Reagan suggests that his company and its peers need to “broaden their entertainment offerings” and screen content beyond movies, such as major sporting events to attract crowds. Moreover, these businesses need to occupy a niche that will draw the crowds out of their homes. For instance, Reagan remains optimistic that Flix Brewhouse will do well following the pandemic because his business is also known for crafting its own beer for its visitors.
Locally, Montreal movie theatres have undertaken similar efforts to elevate their venues. Cinéma Cineplex Forum on Rue St. Catherine recently unveiled what it has dubbed a “VIP” section, which includes seating quality comparable to those in the first-class section of an airplane, wall-to-wall screens, enhanced surround-sound audio, improved concessions, and even a bar for visitors over eighteen.
Aside from revamping and elevating the movie-going experience, audiences crowded into parking lots across the world during the midst of the pandemic to emulate the movie going experience: Amazon Studios and Michael B. Jordan came together to make this possible in twenty cities across the US. Walmart also joined in, screening classics and blockbusters alike in 160 of their parking lots across America.
What spells the demise of companies like AMC also presents an opportunity for the likes of Amazon and Netflix. In the spring of 2020, rumours were announced of Amazon absorbing AMC, the world’s biggest movie theatre chain at the time. Netflix also recently acquired New York City’s iconic Paris Theater to screen “Netflix Originals” after AMC and Regal Entertainment declined to screen its films. Other major companies have also begun to produce a larger variety of content as a means of diversification. One such company is Disney, which distributes the likes of the Marvel Cinematic Universe, Lucasfilm, Pixar, Walt Disney Animation, and Studio Ghibli.
Despite these brand acquisitions, many people assert that people’s thirst for the theatre experience will never be satiated by their small screens at home. For this crowd of film enthusiasts, it appears that movie theatres will prevail as an industry despite the odds. Hollywood horror producer Jason Blum states “I don’t think movie theaters are going anywhere… I think people will run back to movie theatres when we can, I know I am. What COVID did is make what was happening over the course of five to eight years happen in 10 months. So much of the power has transferred to the streamers for storytellers and it’s really accelerated what is happening to the theatrical window.”
Blum, who produced films both for theatrical and streaming service release during the pandemic, said that to keep movie theatres financially viable, they need to adopt a three-week cycle: instead of showing movies for months on end in the theatres, they should instead only be offered for three weeks before then being made available on streaming services. Blum also hopes that shortened theatrical periods for blockbusters like superhero movies will make way for a more diverse slate of movies; arthouse cinema would no longer be confined to niche, smaller cinemas. “Instead of going to the multiplex and having Avengers on screens one through eight and two other movies on nine and ten, you’ll have eight different movies playing every weekend.”
While movie theatres will likely emerge from the coronavirus pandemic looking different from the model we have known for decades, the good news is that they will emerge nonetheless. Instead of refusing to cooperate with streaming giants like Netflix, they will now need to coordinate their efforts with companies that were once their rivals. . Moreover, theatres will need to offer programs beyond movies. They should begin to show other highly anticipated cultural events such as major sporting events like the Stanley Cup or Olympics and major television events like season or series finales of widely beloved shows like Game of Thrones or Stranger Things.
Nonetheless, the allure of sharing these major cultural moments whether movies or hockey games or season finales will always draw people to the theatre for the ultimate viewing experience. Cinemas will need to change and adapt their models for the age of mass streaming, but they will still persevere because people will always feel drawn to the silver screen.