What will happen to movie theaters in this new normal? The COVID-19 pandemic has seen Regal Cinemas suspend operations for all of its 536 theaters. AMC and Cinemark, Regal’s two biggest competitors, announced in early October that they will not shut down a majority of their theaters. That’s admirable, but COVID-19 cases are now at all-time highs and we haven’t reached flu season and the cold northern winters. Even after we have vaccines and treatments, how quickly are customers looking to resume the movie theater experience?
‘Covid Pandemic Is Expected to Reshape Entertainment’ from the October 22nd Wall Street Journal discusses a few possibilities. Hollywood insiders suggest a more intimate and expensive experience. Like going to see a Broadway play. One suggestion was for TV series premiers and finales to be broadcast from theaters.
I’ll walk through the TV series approach for fun. Sounding like Captain Obvious here, I’m assuming customers will be charged a fee to watch a certain TV show. Maybe that works for a series finale because of the gap between the finale and next season’s premiere. But I have a hard time seeing that being effective for a season premiere. At least for a network or cable TV show. If I’m a diehard fan of, let’s say, “Succession”, can I find time within one week to watch the premiere, so I don’t fall behind on subsequent episodes? Seems like it’s more convenient, cheaper, and safer to watch at home.
Where does that leave us? Maybe the problem is that we are looking at movie theaters from a pure entertainment standpoint. Instead, I’d be looking at movie theaters from a real estate standpoint. As in, what can we do with the real estate that currently hosts the movie theaters? It could be easiest to sell real estate for previously underperforming theaters. Unfortunately, commercial real estate is a tough sell these days. But let’s say a sale is possible. Or a theater chain decides to branch out and start a new business unit. What businesses could attract customers to a spacious indoor facility during and post-pandemic?
I’ll focus on the big play and that is…fitness. From the pandemic, we either learned or became aware again of the importance of exercise. Maybe it’s fun? Maybe it makes us feel good? Keeps us sane? With two little ones at home, I know it’s more of the sane reason. Either way, I’ve driven by my local Orange Theory and Y and seen busy facilities once these businesses reopened. This doesn’t include the various cycling, CrossFit, and yoga studios. I mean, Peloton posted their first quarterly profit during Q2 2020.
There’s definitely more than an interest for this to happen. Yes, various safety measures would need to be incorporated or enforced – from social distancing to providing appropriate PPE to improving ventilation in the facility. Theater seating would have to be reconfigured, but stadium seating could increase capacity while allowing for social distancing. A fitness company could broadcast a live session if desired. Sure, it’s not without its risks. But from watching family and friends, I can see how much they miss their close-knit fitness communities. Anecdotally, the demand seems to be there assuming safety measures are in place. Will theaters think differently and look for other business avenues outside of film and TV? The question I ask is why not?
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