2020 has seen a miserable year for theaters, but the latest revenue report from AMC theaters has expressed the state of the theater industry in graphic detail with a 90% drop in revenue. After Regal shut down for the rest of 2020 in response to studios basically giving up on the year, AMC made the bold decision to remain open in an effort to salvage what’s left of the 2020 movie season. The Los Angeles and New York markets, however, still aren’t open, and they make up a massive chunk of movie theater revenue in the U.S.
As of September, AMC has reopened a majority of its theaters, albeit at 20-40% capacity, but the issue has remained that there are no movies to show. Experts have warned that theaters, regardless of efforts to sanitize the auditoriums and space out patrons, won’t really be safe to return to for at least a year after a COVID-19 vaccine is produced and circulated. Realistically, that amount of time would kill off pretty much every theater chain. In fact, despite being the biggest theater chain in the world, AMC has already announced they may run out of money by the end of the year if things don’t turn around.
AMC released their 2020 third-quarter earnings report as a press release recently, and it’s bleak to say the least. The $119.5 million AMC theaters earned (that’s gross, of course, staying open is an absolute cash burn for them) is a full 90-91% drop in revenue year over year. This quarter last year was over $1 billion, as the third quarter encompasses a fair portion of the summer blockbuster season. Additionally, a breakdown of revenues and expenditures tallies the loss just this quarter at right around $900 million. The year loss is over $3.5 billion already.
Theaters operate on very thin margins, despite the connotation that a $9 box of candy might offer the average person. 2020 has left owners with no movies to play in minimum-capacity auditoriums for a general public still pretty uneasy about even going out to see a movie they might still have interest in. It doesn’t help that studios, all of which need to promote some kind of new streaming service, have no reason to really risk the potential loss when they can just dump their 2020 slate onto their streamer as free marketing. Mulan caused a massive spike in Disney+ subscriptions, which may be the reason why Disney is restructuring their business model.
Theaters are on the brink of collapse already, and it’s only November. Without the support of studios, theater chains are resorting to drastic measures to maintain liquidity, and the greater effects of this seismic shift in distribution is only just starting to come into view. The case has been made that drive-ins will make a comeback or that movie-going will soon become an expensive, privatized, studio-run event outing, not unlike the theater was long before film even existed. Many people, not just Christopher Nolan, would be very sad to see theaters go. They can still be an exciting, communal experience, and there’s no comparing a theater screen and sound system to even the most extravagant of home theaters. AMC is fighting for survival for now, but according to their own numbers, there’s not much left in the tank.
