The past six months have been unquestionably difficult for movie theaters.
First, they got shut down in early spring by mandated closures that lasted in many places until nearly summer’s end. Now they’re finding customers slow to return even as cinemas reopen — which in turn has made movie studios slow to release their biggest (and most expensive) blockbusters to run in mostly empty theaters.
After weeks of a rocky road to recovery, it seems like some of the biggest names in the game are officially looking to close up shop, although to what extent remains a bit murky. Reports began emerging over the weekend that Cineworld — owner of No. 2 U.S. chain Regal Cinemas and the largest U.K./Irish theater chain as well — is considering temporarily re-closing all its theater locations starting this week.
Cineworld eventually responded to the reports with a statement on Twitter that didn’t add much in the way of clarity. The company said it’s “considering the temporary closure of our U.K. and U.S. cinemas, but a final decision has not yet been reached.”
How James Bond Killed The Theaters
The straw that reportedly broke the theater operator’s back was a push-back until 2021 of the release of “No Time To Die,” the 25th James Bond film. This is the film’s second delay from an original April release date.
“No Time To Die” had been something of a tentpole hope for theater operators looking to recoup some lost ticket sales in 2020 with a film more or less considered a “lock” with loyal Bond fans worldwide. But now, the movie is the latest in a long line of big blockbuster titles that have been bumped to 2021.
And while there are a handful of blockbusters — like “Wonder Woman 1984,” “Dune,” and Pixar’s “Soul” — officially still on the calendar for later this year, their status is looking increasingly tenuous as well. Disney has already fairly handily demonstrated with “Mulan” that it can transfer a release to its streaming platform Disney+ and enjoy blockbuster sales.
Disney hasn’t yet released performance numbers for the movie’s Labor Day weekend release. Chief Financial Officer Christine McCarthy has said the company was “very pleased” with Mulan’s results so far, but didn’t report any numbers.
But third-party sources make a pretty compelling case that the event was a money maker. Disney+ downloads spiked by roughly 68 percent on Labor Day weekend and spending within the app (to pay $30 to view the movie) skyrocketed by 193 percent. According to most respected estimates, Mulan’s domestic “box office” thus came in north of $270 million.
By contrast, the traditional movie theater release of “Tenet” — another potential Labor Day weekend blockbuster — underperformed expectations dramatically enough that studios took notice. There might be a market for such movies on platforms like Disney+, but consumer demand for physically sitting in theaters with others just isn’t there while the pandemic rages on.
James Bond is already off the schedule, leaving theater operators wondering whether Wonder Woman will decide to sit out the rest of 2020 and Disney will send Soul to Disney+. Both are very much looking like real possibilities.
What Comes Next
The news that Cineworld’s theaters might be shutting down for the indefinite future seems to have come as a surprise to the chain’s employees. A group of about 5,500 reportedly took to Twitter en masse to note they hadn’t been informed and had learned from Britain’s Sunday Times newspaper that their jobs might be in jeopardy.
As for when final word comes down from Cineworld, the brand was not terribly specific.
“Once a decision has been made, we will update all staff and customers as soon as we can,” the company tweeted.
It seems like the company might be waiting to see if those last few tentpole releases still on the slate for 2020 make it to a theater near you or get pulled back as studios wait for greener fields. Murmurs from within the industry seem to indicate the latter.
So far, the box office has spoken pretty clearly. Some consumers will go back to theaters, but the bulk seem to feel safer streaming content at home until a vaccine is widely available.
Whether movie theaters can last that long remains an open question. Cineworld apparently is considering shutting down in an attempt to stay alive long enough to outlast the pandemic. And earlier this week, S&P Global estimated that AMC Theatres — America’s largest theater operator — only has about six month of liquidity left.
“Given our expectations for a high rate of cash burn, we believe the company will run out of liquidity within the next six months unless it is able to raise additional capital, which we view as unlikely, or attendance levels materially improve,” the agency said, according to The Hollywood Reporter.