A phoenix is a Greek mythological bird that cyclically regenerates or is otherwise born again. Associated with fire and the Sun, a phoenix obtains new life by arising from the ashes of its predecessor. In discussions I have within this business, the most honest observer repeatedly tells me it is time to rebuild from the ground up. They cannot see how wading in this swamp of bad real estate deals, declining malls, deeply reduced product flow and the inherent dread our society is developing for any form of enclosed spaces can prove to be successful.
When I look at all the calamities hitting the business of exhibition, I am baffled on how so much has hit at the same time. This truly is an example of demonic dominoes crashing against each other creating a chain of events that in many ways is unparalleled. If one domino was not to move then the advance would stop; theater owners could catch their breaths and would be able to gather their wits and start planning. But they are not, one after another the cruel advance continues leaving theater owners in a state of commercial post-traumatic stress.
This week “Respect” moved to August. Respect is an upcoming American biographical drama film based on the life of American singer Aretha Franklin and starring Jennifer Hudson. Theaters are shuttering again in Europe and yesterday Chicago just shut down indoor dining at restaurants. It was also announced that The Cannes Film Festival is already considering alternative solutions should its May 2021 date be considered too soon. COVID has created a series of problems for which there are no ready solutions.
On top of this, it is an election year where assistance packages have become political footballs for both sides. The most recent Democratic Senate aid proposal just grafted movie theaters onto the Save Our Stages plan designed primarily for live venues only. The package is meant to supplement broader paycheck protection programs and help audience-based entertainment businesses crippled by COVID-19. At best it is a stop gap mess, but it is a measure. If the Democrats get put in office as of this coming Tuesday, they will not be handed the reins of government until January 20th. I imagine it will not be until late February before measures could be put into place. Broadway is officially closed until April. If the Democrats do gain power, then the other question that arises is “Will they use their power to force States to shut down theaters again?” A lot of what will happen depends on who controls the Senate and the House. Nothing is in the cards anytime soon and at best relief could be in place at the earliest February.
Most major studios have unfortunately been forced to push back many of their anticipated releases. The biggest chill this week for me is that it was reported that the latest Bond movie, MGM’s “No Time to Die,” had MGM considering offers from both Apple and Netflix even as key New York and California theaters reopen but may soon be forced to shut again. The bottom line is that there will continue to be a very weak demand for a theatrical experience until the world gets a handle on Coronavirus. All signs point to weak demand until the U.S. gets a handle on the coronavirus. In a Morning Consult Poll only 26% of millennials said that they’re comfortable returning to movie theaters right now. Attitudes toward concerts, gyms, theme parks, and overseas travel were the same.
The Morning Consult poll also found that promotions or free tickets won’t move the needle for most consumers. Among the 1,413 U.S. adults who said they were uncomfortable going to a movie in September, or 64% of the 2,200-person survey, 30% said the ability to rent out a theater for themselves and their family would make them more likely to return. 25% said the same of offers for free movie tickets, while 24% said they would likely head back for free screenings of new movies. To be sure, on average, 46% of the demographic said no promotion would make them more or less likely to go to the movies. It is this outlook that is driving the future of the business of motion picture exhibitors. A failure to acknowledge the deep shrinkage that this industry is enduring will further prolong the suffering.
There is a simple truth woven into our current state of affairs and that is we are dealing with a market that has been altered deeply and an audience whose perspective has been changed forever. While we are in the midst of all this, we must take a step back and accept the reality that has been created. Some of the mistakes are this industry’s and some of the situations we are facing are being shared by live theater, clubs, restaurants, and other communal spaces. It is miserable for a lot of people.
NBCUniversal faces a 25% reduction in its revenue due to COVID and Disney took a $1.4 million dollar hit but it is nothing compared to the damages inflicted on the business of exhibition.
To paraphrase, Clark Kellogg from the movie The Freshman, “There is a kind of freedom in being completely screwed”. That is the freedom that is going to allow you to innovate, to experiment, and to start to take matters into your own hands. I am seeing theaters venturing into VR, looking at a virtual and physical deployment of esports, the development of multicultural screenings, and other content offerings.
It is time to start to provide cinema a rebirth because as soon as we entered the door of the pandemic, we as an industry have been forever changed.
