“Movie theater owners are hoping that cinema reopenings this month in New York City and California can lure back more filmgoers, providing a lift to their struggling businesses and to nearby bars and restaurants,” WSJ reports.
Why It Matters: Long before malls and shopping centers embraced more extravagant attractions, movie theatres were a reliable generator of foot traffic.
- “Movie theaters are often designated as anchor tenants when shops and restaurants sign leases.” Other businesses are allowed to “reduce their operating hours, rent payments or end their leases without penalty if the cinema were to close.”
Numbers To Consider:
- Roughly half of the 5,500 theaters that were operating in 2020 have reopened, according to Comscore.
- Most venues only allow 25% to 50% capacity.
- New York City and San Francisco reopenings (in early March) helped improve national gross box office receipts to $24.1 million from $20.1 million the weekend prior. It was the highest total since Christmas.
- AMC Entertainment raised roughly $1 billion after its stock joined the meme stock frenzy and has now opened 13 of its New York City locations.
The Challenge Ahead: Here’s the rub. Virus restrictions prevent a return to full capacity, at least for now, and even still, consumer habits are evolving with streaming services allowing people to watch first-run movies at home.
- Los Angeles theaters reopened last weekend in a good sign for the business. But Warner Bros. Studios, for example, is releasing its entire 2021 slate simultaneously in theatres and on HBO Max.
- Does a consumer watch at home or spend $15 to watch in a theater? And those prices could go up as property owners continue to invest in “sprucing up” their theaters from a quality and safety perspective.
I wonder how quickly the general public will be willing to return to movie theaters.
Firstly, it depends on how much of the population is willing to attend packed events held inside without a vaccine. If most people try to social distance until they are vaccinated, then a return to theaters will be largely governed by the vaccination rollout. Hopefully we are largely vaccinated by the end of summer, although there will clearly be hesitant holdouts for a while.
After that, there is the question of whether all worry goes away after vaccination. I, for one, am still unsure about post-vaccination life. Do we still have to wear masks? Are crowds all of a sudden ok? How long does immunity last?
Some of these questions will only be answered with time…