Future of...Movie Theaters
Hey friend,
Welcome to Futura Affairs, where I cover the future of everything!
This week has felt like watching a crappy horror movie on the big screen. And that made us wonder…
Will big screens (aka movie theaters) even be in our future?
There’s nothing quite like the feeling of going to the movies: Wait in line to spend $45 on a slushie and snack, walk across sticky floors to your funky smelling seat, and stuff your face with popcorn before the third trailer ends.
But because of the pandemic and increased streaming demand, this joyous experience might be a thing of the past. More than half of Americans have a streaming service at 62 percent. That number continues to grow across the country as we’re looking for activities to fill our days. It’s a good time to be in the movie business, as long as it’s a streaming one. Movie theaters, on the other hand, are struggling financially.
Almost 100,000 businesses have permanently shut down across the nation, including beloved cinemas. Both chains and independent theaters closed at the beginning of the pandemic. Most of them have not been able to make a comeback, and it’s looking like many never will.
Small family-owned businesses aren’t a surprise. They were operating at such tight margins that they didn’t have cash reserves to lean on in the first place. But even the movie behemoths like AMC are hurting. In May, it furloughed or laid off 600 executives and nearly 26,000 employees.
Tons of companies are doing layoffs this year. That doesn’t mean the end of an industry, does it?
Not necessarily, but AMC and Regal Cinemas had more bleak news in October, further evidencing issues for the theater biz.
Regal Cinemas announced it was shutting down every U.S. theater a mere 2 months after re-opening, citing a lack of movies to screen. Many blockbuster movies have postponed their release dates, like Dune and James Bond.
AMC filed an update with the Securities and Exchange Commission (SEC) stating it doesn't foresee long term financial promise. It stated "given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate, the company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021."
Net-net, they’ve run out of cash.
So movie theaters are out, and streaming is in?
For now.
The major players will only be able to survive with bailouts, and independent theaters may be closed for good. If movie theaters close permanently across the country, I just hope they don’t get replaced as Amazon fulfillment centers, which is a real possibility and began even before the pandemic.
However bleak the future looks for movie theaters, there’s something to be said about nostalgia and giving people activities to do with their loved ones--especially when it involves not speaking to one another for two hours straight. I believe movie theaters will make a comeback in the next few years.
Until then, see ya on the couch.