It’s difficult to overstate the impact of COVID-19 on the theater industry. Since 2009, the domestic box office has reliably made over $10 billion each year. In 2020, that’s down to just $2 billion. This catastrophic decline has meant tough times for an already lean industry and is set to have lasting consequences for the way we watch movies.
AMC Theatres have been hit particularly hard. The company was already in a tricky financial position and there was talk in the spring that they may never reopen after they locked their doors in the early days of the pandemic. Christopher Nolan’s Tenet was once seen as a ray of hope and a chance to bring audiences back, but despite well publicized antiviral measures, it failed to draw in the crowds.
Now, AMC may have played its last card, as they’ve released a statement saying that they’re quickly running out of time and money, and it reads as follows:
“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. Thereafter, to meet its obligations as they become due, the Company will require additional sources of liquidity or increases in attendance levels. The required amounts of additional liquidity are expected to be material.
There can be no assurance that the assumptions used to estimate our liquidity requirements and future cash burn will be correct, or that we will be able to achieve more normalized levels of attendance described above, which are materially higher than our current attendance levels, and our ability to be predictive is uncertain due to the unknown magnitude and duration of the COVID-19 pandemic.”
Chances of theaters ever returning to pre-COVID-19 levels of popularity seem slim. Most major 2020 blockbusters have now been delayed until mid-2021, with the only remaining bright light being Wonder Woman 1984 on December 25th. But I wouldn’t be surprised in the slightest to see that getting pushed back as well, as most reports indicate that the public considers that going to the movies is simply too dangerous right now.
This fear factor, combined with studios increasingly opting to put major releases on VOD, may mean a permanent shift away from the communal experience and over to home viewing. It’s impossible to say what the long-term effects of this would be, but I can easily imagine a future where watching a projected movie on a big screen with an audience is a rare and somewhat retro night out. Fingers crossed AMC and other theaters can survive this very miserable-looking winter.