Why Movie Theaters Are Still (Mostly) Open and Why That Likely Won’t Last Long
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With the coronavirus-fueled announcements that Disney pushed back the March 27 opening for “Mulan,” and Paramount delayed “A Quiet Place Part II,” there are no more new wide releases in March. But for now, movie theaters remain open.
As of Thursday midday, Regal Cinema’s Bella Botega 11 in Redmond, Wash. — the one closest to initial domestic epicenter of Kirkland, Wash. — is open. In New Rochelle, NY, where part of the city is quarantined, Regal’s 18 screen New Roc City is doing business as usual.
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While it’s hard to be certain of every film theater in North America, the only one we know to be shut down is the Film Society of Lincoln Center, which is part of a larger strategy in New York City to close cultural gathering places and encourage virus-preventative social distancing.
Broadway, nearly all major sports events, Disneyland, some school districts, and many offices are shutting down, or soon will be. The archdiocese of Seattle has temporarily suspended masses. Yet so far, not a word about movie theaters — even as one film festival after another cancels and NATO’s annual Cinemacon convention finally threw in the towel.
Here’s why they are slow to close.
A diverse and competitive ecosystem
The NBA is one organization. Broadway is a business situated around a few blocks. For exhibition, no one company dominates movie theaters nationwide. Three top chains have locations throughout the country, but they are supplemented by smaller chains and many independents.
So far, concerns about capacities and closeness seem to ones that theaters can address. Since they’re open seven days a week with multiple showings per day, and multiple auditoriums for top films along with reserved seating, they could adapt to separation requirements. That sets them apart from other events that might be packed in sold-out situations.
Theaters never close
A nationwide shutdown of American movie theaters would be unprecedented. They didn’t close for World War II, and nearly all remained open on 9/11. Localized cases largely have been weather emergencies. Though not as central to public social activity as they were decades ago, they remain a place of escape and the most-frequent reason to buy tickets for entertainment.
If theaters closed for a short period, they could start again — but as when major-league baseball endured its first strike, it took some time to recover. In one year, people got used to not following the sport.
Buzzards are circling
Domestic ticket sales decreased 5 percent last year. With so much of the gross coming from top titles, which get higher film rentals, there is even less margin for profit. Real estate and physical properties have costs, whether a theater is open or not; studios can hope a new date for a movie will keep their revenues intact.
The theaters are not unlike restaurants or other public venues where major economic disruption could cause major losses or worse. However, people are always going to go out to eat; movie theaters are already much more vulnerable.
Although exhibitors have increasingly looked to special events to supplement standard movie releases, but their business relies on studios. And, studios now have other platforms to sell their products — often, platforms that they’re building themselves. Closing theaters might be all the inspiration they need to seriously consider switching horses, especially if the same revenues can be achieved with less vulnerability.
Last man standing
Despite the widespread pleas to the public to stay home, exhibitors know that many will be antsy for something to do. Theaters could be the sole remaining entertainment option outside the home. If schools close widely, the opportunity is even greater. A multi-week shut down might see a flood of parents willing to take the risk have some way to entertain their kids. (The ethics of this strategy, however, are another matter.)
Even with all that, there’s also a few reasons why they might choose to close.
No movies
Studios have taken matters into their own hands by pulling titles from the release calendar. Today, people go to a movie; they no longer go to the movies. If major new films don’t open, older ones run out of gas (and have home viewing after 90 days, anyway). The specialized market isn’t positioned to fill much of the gap. So how can they stay open?
It will be the responsible action
It’s possible the most infected areas will see closings (but as noted, that’s yet to be the case in Seattle or New Rochelle). But so far, the thinking seems to be why bother where the threat is not yet there? Another way of looking at this: Shouldn’t settings that could increase spread close, in order to keep things from getting worse? Of course, when dealing with national chains, it’s possible that one overarching policy makes more sense. In any event: Studios won’t release new films if key cities aren’t included.
Closed theaters mean fewer costs
If nothing else, a closed theater means fewer expenses. When theaters are retail anchors, landlords might negotiate short-term discounts on rent. Insurance coverage might be limited, depending on the circumstances, but if the government provides tax or other relief it’s possible that being closed puts a business ahead of one that stays open.
The law says so
It usually takes the declaration of a state of emergency, but as coronavirus spreads it feels absurd to think movie theaters will somehow be exempt from widespread closures.
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