Will movie theaters survive the pandemic?
“The 360” shows you diverse perspectives on the day’s top stories and debates.
What’s happening
The movie theater industry, already struggling amid the coronavirus pandemic, was dealt another major blow on Dec. 3 when Warner Bros. announced that all of its 2021 releases would be made available for streaming on the same day they hit theaters.
The move from the world’s second-largest movie studio is the latest, and perhaps most drastic, attempt by production companies to shore up their business models with theaters across the country expected to remain closed or operating at limited capacity for at least the next several months.
Box-office revenue, which movie theaters split with the studios, fell off a cliff at the onset of the pandemic. January’s top movie, “Bad Boys for Life,” pulled in more than $135 million. The top movie in April, an independent comedy called “Phoenix, Oregon,” grossed $16,846 nationwide. Total U.S. box-office revenue for 2020 is on pace to come up $9 billion short of where it was in 2019. Even though theaters reopened in many places over the summer, customers have been hesitant to risk going to the cinema, and polls indicate that they won’t feel comfortable doing so anytime soon.
In response, studios have delayed many of their biggest films and increasingly relied on digital distribution for properties that are released. While those changes may help studios mitigate their losses, they’ve only made things more difficult for the theater industry. “Theaters may not survive the impact of the pandemic,” the National Association of Theatre Owners wrote in a letter to Congress in September.
Why there’s debate
Many industry experts believe the pandemic will bring the end of movie theaters as we know them. Revenue has dropped so dramatically, for so long, that a huge number of theaters simply won’t be there when life returns to normal. The possibility of higher ticket prices and theaters being concentrated in places with lots of people could mean that the cinema experience becomes something that only well-off people in big cities have access to, some industry analysts predict.
Even when they’re able to open safely, theaters could still be in dire straits. The pandemic has accelerated a trend toward in-home viewing that has been building for years. “What COVID did is make what was happening over the course of five to eight years happen in 10 months,” one film producer told CNBC. After a year of watching movies at home, people may see a trip to the theater as an unnecessary indulgence. Theaters have also lost an enormous amount of leverage in their relationships with studios over the past several months and may struggle to keep the lights on under new agreements that strongly favor production companies.
Others are hopeful that the American public will flood back to the cinema once it’s safe to do so. Theaters that do make it through the pandemic could see a surge in business as people realize how important the moviegoing experience is. Studios may also come to miss the enormous sums of money that box-office sales generate and decide to throttle back their transition to streaming.
What’s next
It’s unclear whether any other studios will follow the model set by Warner Bros. and begin releasing their films simultaneously in theaters and on streaming sites. The success or failure of this strategy could be a major turning point for the future survival of movie theaters.
Perspectives
Pessimists
The end of the pandemic won’t save movie theaters
“While movie theaters expect to open again in 2021, they will do so in a very weakened state. They have spent this year bleeding money and trying to stave off bankruptcy.” — Peter Kafka, Vox
Audiences may prefer in-home viewing after the pandemic is over
“We have learned to live without movie theaters. Even the ones that make it through the crisis may find that online-streaming apps have stolen away audiences for good.” — Tara Lachapelle, Bloomberg
There will be far fewer theaters across the country
“I think most of the movie theater chains will not survive in their current form. They’re likely going to have to file for bankruptcy protection, and you’re probably going to end up with a smaller footprint.” — Media analyst Rich Greenfield to NBC News
The cinema could become an indulgence for the rich in big cities
“Going to a movie will become a big deal akin to going to a sports game or a concert. And most likely, these venues will be in cities or large metro areas with a big enough customer base to support these types of venues. And then there will probably be room for niche, smaller venues. ...These, too, are more likely to be located in affluent communities and large metro areas rather than middle-class suburban ones.” — Conor Sen, Bloomberg
Theaters have lost all the power in their relationships with studios
“Theaters have no leverage here, and it’s unlikely they’ll regain any in time to stop the tides from shifting even further.” — Alison Herman, Ringer
The pandemic accelerated a trend that was already a threat to the future of movie theaters
“[Hollywood] can no longer avoid the wrenching changes to its business fueled by the rise of digital technologies and changing consumer practices. These have been clear to anyone who has watched the relentless and impressive march of Netflix.” — Kara Swisher, New York Times
Optimists
Audiences could come back to theaters once it’s safe
“For theaters, which have suffered through a financial calamity, the possibility of a vaccine and the prospect that their auditoriums could eventually be filled with film lovers — excited to see the next ‘Avengers’ movie or ‘Fast and Furious’ flick — has provided a rare feeling of hope.” — Rebecca Rubin and Brent Lang, Variety
Streaming may not be a viable business model
“For all the promise of streaming services, which are vital for any major media company’s future, they cannot deliver the massive profits of a successful global theatrical release.” — David Sims, Atlantic
In-home viewing is a poor substitute for the theater experience
“Humans have not been rewired to prefer being alone inside their house. If that were the case, the pandemic would be over. As long as there are big movies, there will be big screens to watch them on.” — Johnny Oleksinski, New York Post
Theaters will still play a major role in the movie business
“As tempting as it is to think that studios are eager to bypass theaters and reap a movie’s box office revenue entirely for themselves, they also know that those theaters provide valuable marketing for their products, whether in the form of coming attractions, lobby promotions or reviews. Even if movies wind up making most of their revenue when they get to on-demand and streaming platforms, their enduring value is still created and unleashed during theatrical runs.” — Ann Hornaday, Washington Post
It’s too early to know how theaters will fare
“Without a firm date for a widely distributed vaccine, let alone a return to whatever version of normal we might be able to achieve, it’s too soon to opine on whether movie theaters are dead or not.” — Sam Adams, Slate
Is there a topic you’d like to see covered in “The 360”? Send your suggestions to the360@yahoonews.com.
Read more “360”s
Photo illustration: Yahoo News; photos: David Paul Morris/Bloomberg via Getty Images, Getty Images
