The movie theatre will still exist, albeit at a much smaller scale. CEO of Plex, a global streaming media company bringing your favorite content together in the highest-rated OTT video app. 4 If theaters have a diminished role in the windowing system—the schedule of exclusive exhibition periods across theaters, home video, cable and … My 2012 book Comic-Con and the Business of Pop Culture (McGraw-Hill) looks at trends in entertainment, media, marketing and technology through the lens of the world’s wildest fan event, San Diego Comic-Con. Theaters: Reports Of Their Demise Are Greatly Exaggerated. It’s very easy to see a vertically-integrated retailer build a good business around branded media-oriented merchandise and exclusive collectibles tied to movie franchises with installments playing on their screens. Those physical locations are now serving as distribution and return points for merchandise ordered on Amazon.com AAPL In the late 1990s, the exhibition business saw a rash of bankruptcies that cut the number of open theaters. The 507 theaters open on Saturday (about 5 percent of the country’s cinemas) made only $4,355, according to Deadline. Brent Lang, Variety’s executive editor of film and media, and its two chief film critics, Peter Debruge and Owen Gleiberman, discuss what the future holds for movie theaters… Its own Amazon Prime Video service has become a major player in the streaming wars, with a growing collection of original films and series. In the words of fellow Forbes contributor Gene Del Veccio, “Only Fools, Mad Geniuses and Daredevils Would Invest in a Theater Chain.”. Movies like “North by Northwest”, “Key Largo” or “The Philadelphia Story”. ... movie theaters can also consider building out the affiliated recreation services to give movie-goers a good reason to linger in theaters … suggested attendance might be down 15-25% on a permanent basis. Meanwhile, the main advantage of movie theaters, exclusive access to new media, new content, is eroding with the rise of streaming. Movie theaters are expecting another dropoff in business this year due to the pandemic, but the situation is improving as public health restrictions loosen. In fact, I think this might have been the best thing to happen to movie theaters … The competition in streaming media is intensifying, and 2021 is shaping up to be a fierce fight for consumers’ time and money. A COVID-19 vaccine could save the future of movie theaters, but a new round of closures could push many movie theater brands beyond the point of no return. What about the small arthouse theaters? Read Keith Valory's full executive profile here.…. But, in the future, they might need to be. Opinions expressed by Forbes Contributors are their own. Theaters: Reports Of Their Demise Are Greatly Exaggerated As a result of movie theaters being closed for much of 2020, many have been saying theaters will never recover. They then talk about HBO Max with ads, AT&T's possible wireless phone plans subsidized by ads, and Apple One subscription bundles. To be frank, this was going to happen anyway. The first rule of investing is “buy low, sell high.” Right now, few businesses are hitting lower lows than the movie theater industry, which could make it a great time to acquire a distressed asset ahead of a turnaround. The company’s shares dropped 70% this year. It’s a family movie. Though some states are reopening movie theaters, experts worry not many people will head back to watch the big screen. The current “megaplex” with 10 screens in a theatre was built for a time with much higher movie attendance and it is not a bold claim to say that if not for massive long-term leases, the movie theatre footprint will likely be much smaller in the not too distant future. I live and work in Seattle, Washington, © 2021 Forbes Media LLC. The movie theater represents a lot of things to each of us; it can mean afternoons going with the family to see a wholesome story develop, or taking our first date for a romantic movie. I’ve personally heard people in the industry say they think it will be years before people return to theaters at pre-pandemic levels, but I’m not so sure. Because of this messiness for consumers — high prices coupled with far too many services to choose from — ad-supported video on demand (AVOD) will grow over subscription video on demand (SVOD). What does the movie theatre of the future look like. eMarketer forecasting analysts Eric Haggstrom and Peter Vahle and vice president of content studio at Insider Intelligence Paul Verna discuss the future of the movie theater. Will movies make a comeback and what will they look like? That means anyone willing to throw theater operators a lifeline right now needs have a long term strategy for a business model whose short- and medium-term prospects face existential threats, including a potentially permanent shift in consumer behavior toward at-home viewing of new releases on streaming services. As we rejoice in the feeling of starting anew and leaving 2020 behind us, the long-term implications of what we all lived through in the last 12 months will play a large part in the way every industry takes shape in the coming year. What is the future of movie theaters? In 1995 there were 7,744 movie theaters across the United States. Other merchandise? Movie theaters aren’t usually where you go to watch concerts. While this strategy to draw in new subscribers makes perfect sense, a large studio with tens of thousands of titles offering its content exclusively on its own streaming service will not maximize the potential revenue of a catalog of content. Studies have shown 76% of viewers are willing to watch commercials in exchange for free content, and just recently, Nielsen reported that ad-supported options will become increasingly appealing to “cash-strapped consumers affected by rising unemployment brought on by the pandemic” who also “feel maxed with subscription services.”. Thanks to COVID-19, the future of movie theatres looks darker than ever. Domestic ticket sales in the US were down 80% in 2020 to $2.2 billion from a 2019 haul of $11.4 billion, according to Comscore Photo by CaptJayRuffins, via Wikimedia Commons. AMZN The pricetag for AMC or one of the other distressed chains would look like pocket change, and could go less if conditions continue to remain rugged. suggest bankruptcy could be a better solution, Only Fools, Mad Geniuses and Daredevils Would Invest in a Theater Chain, buyers with patience, deep pockets and bigger plans. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. SCOR I believe people will flock back to theaters in droves this summer (assuming a successful vaccine rollout), craving an experience many of us always took for granted, and one that can’t be replicated in most homes. , or to companies in the tech and streaming space such as Apple But by 2018, there were just 5,869, according to Statista. Last week, Allan Reagan, CEO of the Flix Brewhouse chain of dine-in cinemas, suggested attendance might be down 15-25% on a permanent basis. 7 min read. Is Robotics Automation The Next Big 'Barcode Moment' For Retailers? The Future of Movie Theaters 10.21.2020 By Julian Tack. Its total market cap is under $460 million, and it’s still considered overvalued. In fact, even Netflix, which has quickly built an impressive library of its own original content, will not be able to maximize revenues on its catalog unless it licenses content to other services. I am an author, consultant and educator with a professional interest in the business implications of new media and a personal passion for comics and visual communication. Last May, during the early first peak of the pandemic, Amazon was rumored to be considering acquisition after looking hard at picking up the smaller art-house cinema chain Landmark Theaters in 2018. You may opt-out by. Amazon Eyes MGM For $10 Billion; What Other Media Deals Await? It's been stubborn so far, but we’ve already seen Netflix explore other ways to earn revenue, such as offering free access to some of its most popular movies and shows and licensing that content to other services is a logical next step. All those companies are flush with cash and riding high stock valuations going into 2021. announcing the closure of all 536 U.S. theaters, such as offering free access to some of its most popular movies and shows, Read Keith Valory's full executive profile here. I don’t think movie theaters are going anywhere. Illustration: Nan Lee. Warner Bros. Some businesses are starting to reopen while others have unfortunately shut down for good. Future of Movie Theatres By Mike Cummings, TK Architects Principal All of us have seen reports that movie theatres are a struggling business or even that their future is in doubt. . The direct-to-streaming model for major studio content has undoubtedly been good for streaming, and if I’m wrong and movie theaters don’t rebound, it will be interesting to see how filmmakers adapt their projects for both the at-home and theater-viewing experiences. Are we headed for a future where every major film release, from blockbusters to indie flicks, is simply released to streaming? Whatever AMC would have cost in May is probably quite a bit lower now. A movie like Trolls World Tour might make a lot of money by heading straight to digital platforms — and frustrate theater chains in the process — … What role will movie theaters play in the future of entertainment? On the latest episode of the “Pivot” podcast, Kara Swisher and Scott Galloway discuss the very uncertain future of the movie-theater business. NFLX You’d have to go back to the early 1980s to find a number that low. And if that happens, it’s hard to see anyone re-investing capital to build up a global chain of cinemas from the ground up. Will big chain theaters be able to survive? I have worked in the marketing, technology and start-up world since the early 1990s and have previously written books on generational change in the workplace and the impact of young entrepreneurs in emerging economies. But even if movie theaters in the … I believe there’s still an incredibly vital role that festivals and movie theaters play in giving those films time to be discovered. AMZN While the industry lurched, streaming media certainly picked up the slack, but it’s way too soon to say theaters aren’t coming back. These are hard times for the movie theater industry. Theater chains are the bargain basement deal of the decade right now, but the price will be high indeed if they get left on the shelf. There's been a great deal of speculation on the topic over the past year or so, but … Picking up a chain of theaters to cover out-of-home viewing is a good hedge in case market trends swing the other direction and post-pandemic audiences flock to out-of-home venues to be part of their communities again. I am an author, consultant and educator with a professional interest in the business implications of new media and a personal passion for comics and visual communication. WFM The question is, is there an upside given the uncertain state of the entire film industry, and if so, for what kind of buyer? and the expansion of Amazon Go! With AMC recently saying it will go bankrupt without $750 million, global cinema revenue reportedly dropping 66% in 2020 and Regal (the second-largest theater chain after AMC) announcing the closure of all 536 U.S. theaters with no targeted reopening date, it’s easy to see why many believe theaters will not rebound to what they once were. Cineworld, the UK-based owner of the Regal Cinemas chain, averted bankruptcy by securing a financing deal good for up to $750 million in exchange for a 10% stake in the company. I teach at the University of Washington in the Communication Leadership graduate program and speak at conferences worldwide. Domestic ticket sales in the US were down 80% in 2020 to $2.2 billion from a 2019 haul of $11.4 billion, according to Comscore SCOR +1.4%. Published March 17, 2020 . (Photo by Noam Galai/Getty Images), The Next Step | Small Business Video Series, A Cruel Fate Unites Two Lonely Characters In ‘Doom At Your Service’, Itzy Joins BTS, Blackpink And Rosé With A New Hit On Billboard’s Global Chart. There are other upsides for buyers with patience, deep pockets and bigger plans. © 2021 Forbes Media LLC. Universal Studios has strong-armed theater chains to shorten the exhibition window to only four weeks in theaters before they can stream their movies. Published March 17, 2020 Updated March 17, 2020 . That’s been true for the duration of the pandemic, and it’s still true now even as light can be dimly glimpsed at the end of the tunnel. The Future of Movie Theaters. We will start to see a shake-out at the top in 2021 as many services increase prices yet again (Netflix, Hulu, and Disney Plus all have price increases coming) because the market won’t tolerate more than a few premium-priced services, relegating most “top-tier” providers to the $7-$8 range and all others to the sub-$4 range. New film releases are slim this summer, starting with Christopher Nolan’s Tenet and Disney’s Mulan in July. If things continue to slide downhill for much longer, one or more of the top chains will throw in the towel, with potentially devastating consequences for the shopping centers, downtowns, and main streets anchored by multiplexes as well as for the film industry. This has been further fueled by news that Warner Bros. will release all its 2021 movies on HBO Max while simultaneously showing them in theaters. Of the three, AMC is the hardest hit. or Netflix So what would be in it for Amazon or a similarly-situated buyer? Strikes First Deal to Return Films to Theaters Only in 2022 with New 45-Day Window LA County Movie Theaters Will Reopen Monday Related The Next Step | Small Business Video Series, How AI-Powered Preventive Maintenance Saves Lives, Time And Money For The Utility Sector, Humana: ‘Unhealthy Days’ For Medicare Population Fell Even During Pandemic, GENYOUth Is On A Mission To Foster Healthier Schools Disrupted By COVID-19, Former Aetna CFO Returns To Top Finance Role At CVS Health, How To Achieve Your Company’s Corporate Social Responsibility In Services Components. And industry leaders fear the hangover may persist even as the cloud of COVID-19 slowly starts to lift with the rollout of vaccines in 2021. More importantly, given the continued disaggregation of content that people care about, we’ll need a better way to tie it all together and make it easy for people to quickly find what to watch and where to watch it. The fourth phase allows outdoor arts and entertainment, sporting events without fans and media production. collider.com Movie … I am a founding partner of MediaPlant, a Seattle-based communications firm, and consult with clients on strategy, storytelling and engaging fan audiences. But Amazon is one of the drivers of that shift. The Future of Movie-Going. Opinions expressed are those of the author. Moving Beyond Modern Portfolio Theory: It’s About Time! CEO of Plex, a global streaming media company bringing your favorite content together in the highest-rated OTT video app. The future of movie theaters is grim. The next major innovation that movie theaters saw was the introduction of color image; the film seemed complete now and people probably couldn’t imagine more could be done to … Amazon has been gradually increasing its physical presence with the acquisition of Whole Foods Read Keith Valory's full executive profile here. The Covid-19 pandemic has closed down many businesses while events have either been postponed or canceled altogether. These are hard times for the movie theater industry. If U.S. consumers average about four paid services per household, the key here for any streaming service is not to limit its entire business by forcing it into one channel. . Or more recent ones like “The Neon Demon”, “Moonrise Kingdom” and “Crimson Peak”. All Rights Reserved, This is a BETA experience. theater in Times Square as the city continues Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on August 5, 2020 in New York City. In 2019 and 2020, we saw many content providers circling the wagons and pulling their content back from the major streaming services (NBC pulling The Office from Netflix to be a Peacock exclusive is just one example). The Future of the Movie Theater. ... On Saturday, Andrew Cuomo announced that movie theaters outside New York City could reopen at 25% capacity. Expertise from Forbes Councils members, operated under license. Once things start to improve, a well-resourced parent company could also invest heavily in enhancements to the viewing experience along with other perks to get butts back in seats. The silver lining, however, was that it … A family of four would pay $36 for the tickets, but also at least another $20 for the concessions. Movie theaters have big footprints in urban and suburban commercial centers. Theaters have potential to become hubs for other kinds of social activities, as the rise of food and beverage-oriented chains like Flix demonstrate. ... Warner Bros is releasing every movie in theaters and on HBO Max concurrently for at least the next year. TGT The streaming media industry experienced huge growth in 2020, but where does it go from here? So now that many of the big players have established their own streaming services and cleaned up their licensing deals, expect to see an increasing number of licensing deals pop up between services. Aberson doesn't believe the pandemic will lead to long-term changes to his businesses. Do I qualify? CEO of Plex, a global streaming media company bringing your favorite content together in the highest-rated OTT video app. There was absolutely no way that theaters were going to hold on to exclusive access, and the violent jolt of the pandemic has accelerated many trends. The upside for consumers is that movie theaters would still be there when we eventually pop the hatch on the quarantine and return to some semblance of normal life. Although the average number of movie tickets purchased by Americans each year has declined from 4.2 in 2009 to 3.4 in 2019, 3 studio revenues are driven more by box office tickets now than they were 20 years ago. That’s a big hit if your only business is exhibiting films. “Mulan” is an amazing deal at $30. That’s just a few dollars per theater… WarnerMedia reportedly stands to lose more than $1 billion by releasing movies on HBO Max, so it’s easy to see that’s not sustainable for the industry long term. Even the most optimistic industry forecasts don’t project a turnaround until 2022 at least. NEW YORK, NEW YORK - AUGUST 05: People wear protective face masks outside the AMC Empire 25 movie ... [+] theater in Times Square as the city continues Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on August 5, 2020 in New York City. (Photo by Noam Galai/Getty Images). Cinemark, the third-largest chain, saw a 96% drop in revenue in the third quarter of 2020 but is seen to be in a relatively stronger financial position than its rivals, and has been praised for its reopening plans. 2020 has been a terrible year all around. Although WarnerMedia has announced a hybrid streaming/theatrical model for 2021, we're not convinced that streaming heralds the future of moviegoing. So could multiplexes. In fact, famed director Quentin Tarantino’s proclaimed at the Cannes Film Festival in May that digital projection is the death of cinema. The same logic applies to other potential buyers like Amazon’s retail competitors Wal-Mart and Target . The number of streaming services will continue to grow in 2021, creating a worse and worse experience for the consumer who just wants an easy entertainment experience. convenience stores and bookstores. All Rights Reserved, This is a BETA experience. With so many tentpole films based on properties with cross-media appeal, movie theaters have untapped potential as outlets for licensed merchandise. That’s Amazon again. Barry Hertz. I t’s no big secret that the movie theater industry is facing an existential crisis, with serious challenges coming from … The fourth phase allows outdoor arts and entertainment, sporting events without fans and media production. As a result of movie theaters being closed for much of 2020, many have been saying theaters will never recover. Box Office Report: ‘Radhe Your Most Wanted Bhai’ Earns Close To $2 Million, NCT Dream Joins BTS And Seventeen In A Massive Sales Feat In Their Home Country, Joe Cornish And John Boyega Set To Return For ‘Attack The Block 2’, Joe Cornish And John Boyega’s ‘Attack The Block’ Sequel Could Make Accidental Box Office History, Fox In Fall 2021: Just 3 New Series; Football, And Continued Animation On Sunday. You may opt-out by. 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