(Noted News) — With the convenience of streaming, the economic devastation of the coronavirus restrictions accelerated something we suspected was already coming: the slow obsolescence of movie theaters.
Movie theaters across North America and Europe have been decimated during the COVID-19 pandemic. Many theater companies have died completely, shrunk significantly, or are desperately trying to find obscure ways of keeping some revenue coming in.
Regal Cinemas, one of the biggest theater companies in the world, closed more than 500 theaters in October. AMC Theaters, another giant here in the US has been clinging to life with a new $125 million bankruptcy filing. The list goes on, and adding to the troubles is the obvious fact that there is no real end in sight.
Recently the USA’s leading infectious disease specialist Dr. Anthony Fauci said that the coronavirus should be under control by the fall of this year. This ETA may be better than nothing, but it’s not good news for movie theaters or any business for that matter. Not even giant corporations are designed to stay closed for nearly two years.
The gloom is piling on, and the CEO of Flix Brewhouse, Allen Reagan, isn’t kidding himself. He says when—or if—things get back to normal, movie theaters will likely always end up operating in a 25% smaller market than before.
In an interview with CNBC, Reagan said that in order to survive, theaters have to look beyond just showing movies.
“We’re hoping that the industry, which is a little bit over-screened right now, loses some screens due to natural attrition. I don’t think anybody is going to be head over heels building new theaters right now. We also need to broaden our entertainment offerings beyond just the film product.”
Flix Brewhouse, based in Texas, has 10 different theaters that also serve food and brew their own craft beer, adding some life to their business model and revenue streams.
“We’re actually a brewpub, a gastropub, that shows movies…and we think we’ve got a pretty good shot at surviving. You can get any sporting event that you want in your living room all weekend long, but we still have sports bars. We still have Buffalo Wild Wings and all kinds of sports-bar concepts for the same reason: people want to get out and they want to have somebody take care of them. They want a little bit of entertainment.”
Emphasizing Reagan’s point about theaters needing to branch out into different methods of entertainment is the fact that Hollywood also had to shut down to comply with coronavirus restrictions. This means that even if theaters could open as normal, they would have barely any movies to stream.
For the theaters that don’t survive, trying to sell or repurpose their buildings can be tricky; Theaters have a fairly specific design to them which doesn’t make them easily convertible to office spaces, or retail stores.
In 2020, movie ticket sales dropped 80%, the biggest drop in almost 40 years. Since last March, shares in Netflix have gone up over 60%.