Theaters in ‘No Time to Die’ Bond-style survival mode as Hollywood looks back

From first dates to family outings, a night at the movies was a huge draw before the pandemic. However, one of society’s biggest rituals is struggling to recover, even as COVID-19 capacity limits are lifted.

Like many other industries, the long-term survival of movie theaters is a huge open question, especially among small independent operators. Many theaters across the country have been closed for more than a year as Hollywood drastically slashed new releases or cut movie windows before making them available on video.

This weekend will be a big test of the public’s willingness to show up in the same numbers as before the virus drastically changes lives around the world.

Even though America’s theaters have now fully reopened and people are finally returning to theaters, an ever-increasing glut of streaming options has some observers doubt that the golden age of cinema will return soon – if ever.

“People went to the cinema less often [and] the pandemic has served as an accelerator for these trends, ”Paul Hardart, director of the entertainment, media and technology program at the University of New York’s Stern School of Business, told Yahoo Finance in an interview with Yahoo Finance. York.

The pandemic has also altered some aspects of consumers’ home viewing habits, which show no signs of slowing down. According to a study conducted in June 2020 by, 14% of adults surveyed strongly preferred to see a movie for the first time in the cinema, but 36% said they would much prefer to watch a movie at home.

Meanwhile, home options are booming. About 20% of the time was spent streaming last year, according to Nielsen data recently cited by The, and could reach 33% by the end of the year, the report adds.

Another challenge has been inflation: Ticket prices have increased, with the average price of tickets in the, which, even before COVID-19, was cited by consumers as negative.

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“We can all expect ticket prices to go up and the type of movies we’re going to see will start to change,” Hardart said.

“Absolutely willing” to come back

However, the past few months have given some theaters cause for optimism.

Over the Labor Day weekend, sites in Illinois and Wisconsin welcomed more visitors than in 2019 to see Marvel’s release () “Shang-Chi and the Legend of the Ten Rings,” who bowed to one.

It was the first time that attendance at the family channel exceeded pre-coronavirus figures since it reopened in April, after a one-year hiatus.

“Guests are absolutely willing, able and come back when they want to see movies,” said Chris Johnson, CEO of Classic Cinemas.

As the first Marvel movie to be released exclusively in theaters since the start of the pandemic, “Shang-Chi” has raised a huge bar for moviegoers’ willingness to return to theaters. July’s “Black Widow” was a simultaneous Disney + / theater release, a).

During the pandemic, studios like HBO / Warner () (), hoping it would buy time until mass vaccinations curb the spread of COVID-19.

However, the wave of the Delta variant confused many moviegoers, and the double-release strategy was kind of a perverse incentive. When given the opportunity, many consumers simply decided to watch from home.

Monthly data from Datex Property Solutions shows national chains paid 95% of the rent owed in August as revenue rebounded. Movie theater collections soared 81% from 48.9% a year ago, but sales are down 48% since 2019, Datex found.

However, occupancy costs were up 96% from 2019 – one of the reasons chains continually love many of their Los Angeles locations.

The closures have flooded the Los Angeles market with movie theater real estate – “an opportunity that big chains such as Regal, AMC and Cinemark are likely to capitalize on as the three account for nearly 70% of the regional movie market,” said in a recent report.

“We need a constant supply,” Johnson of Classic Cinemas told Yahoo Finance. “We could create some momentum this year, but it all depends on the studio product. “

Like many of its cohorts, Classic Cinemas has been wiped out by the pandemic. After its long shutdown, the theater installed a new air filtration system, hired additional “cleaning” staff to attract more customers, and paid more for just about everything.

“The challenge is when you’re trying to get that out to a small, cinematic audience it kind of gets taken care of when you have the right amount of people,” Johnson said.

The chain got (PPP) and money, which helped cover labor and overhead during the worst days of the pandemic.

Still, the box office is returning to normal as people slowly return to the movies. The global box office is expected to hit $ 20.2 billion in 2021, down 52% from 2019’s record high, but 68% above last year, according to London-based data company Gower Street Analytics.

“I have absolutely no doubts that if we get films, it will be fine,” Johnson added. “The cinemas will be back. “

“I’m not afraid of getting sick”

Still, signs are emerging that moviegoers are more inclined to take seats again.

Sony’s “Venom: Let There Be Carnage” surpassed all expectations with an estimated opening of $ 90.1 million across more than 4,000 screens, the best opening weekend Disney previously set Black Widow at 80, $ 73 million.

While cinemas are showing signs of recovery from last year, the film industry has been on a wild ride. Big players like Disney, HBO and more recently Comcast () – have chosen to make many of their new films available in theaters and streaming, either for free or for a fee of $ 30 (Disney +).

For its part, Disney seems convinced that consumers are ready to return to the cinema and that the future of blockbusters is on the big screen. After “Shang-Chi” defied expectations, the company announced the rest of its

“Everyone recognizes the fact that film distribution doesn’t become profitable without theatrical presence,” said Cory Jacobson, president and owner of Michigan-based Phoenix Theaters. “If you don’t have the movie theater window in place, it’s just wasted money.”

Amid the planned arrival of “No Time to Die,” which in its first two days of release, the jury is still out on whether the films will be viable again.

Meanwhile, new headwinds could emerge as moviegoers will now have to show proof of their vaccination status and wear a mask to attend screenings.

According to NYU’s Hardart, the prevalence of the Delta variant will make moviegoers reconsider going to the movies and waiting to watch it at home.

“I’m not worried about wearing a mask for two hours. I’m not afraid of getting sick, ”Hardart said.

A recent highlights the challenges of the pandemic era for movies, with 57% of respondents saying watching TV and movies at home continues to be the preferred entertainment options overall.

Although box office receipts suggest theaters are heading for a revival, the big chains have been the biggest beneficiaries.

AMC (), which has taken several daring initiatives to lay the foundations for its rebirth, is betting on the return of consumers to theaters. Straddling the, the company mainly has stock sales.

“Retail investors have provided AMC with a lifeline,” Alicia Reese, equity research analyst, told Yahoo Finance in an interview.

“They have the money to reinvest in the business to expand their footprint with some of the theaters that are for sale because they did not survive the pandemic,” Reese added.

The company will do it too, reducing interest charges and paying millions in unpaid rents.

AMC narrowly escaped bankruptcy this year. But small local theaters that don’t have the same resources may not be so lucky, especially as operating costs go up.

“We spent $ 10,000 on hand sanitizer, which is a lot of hand sanitizer,” said Jacobson, who also got PPP and SVOG support.

In December, the Small Business Administration set up one to provide eligible theaters, theater operators and performing arts organizations with grants that could help save their businesses.

“People who are here for the long haul seem to be pretty happy and optimistic about the future and the direction they are going with it,” Jacobson said.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

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