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Movie Theaters Version 3.0: The Remote Zombie

Will movie theaters rebound in the post-COVID environment or does Hollywood have a major problem?

Movie Theater

If you polled 100 members of the CE press who specifically cover the movie industry and home theater segment what would be the #1 story of 2020 and 2021, we are 100% certain that the demise of movie theaters would not have been on anyone’s list. 

But here we are. 

It’s June 7th, 2021, and most of the movie theaters in America are finally open and playing a mix of old and new films as there are not enough new films to show. Canadian movie theaters are still closed in some cities.

Godzilla vs. King Kong

Box office numbers are improving thanks to films like Godzilla vs. Kong which we saw as a family at Universal Studios City Walk on March 31st during our Passover trip to Florida. The park was filled to capacity (the 50% capacity rule was surpassed in less than 1 hour) and we were one of the only people inside watching it. Warm weather and the desire to be among human beings outdoors kept the theater relatively quiet.

When theaters went dark here in New Jersey in March 2020, I had a weird feeling that the shutdown could potentially change how consumers watch movies forever. Streaming offers a degree of choice that theaters can never offer and who wants to check their iPhone every five minutes to make sure the kids have not burned down the house while you enjoy a movie? 

Movies have been my drug of choice for almost 45 years; my parents took me to a drive-in movie outside of Barrie, Ontario, where I saw my first film at the age of 6 and I’ve seen more than 5,000 films over the course of my life.

My movie collection nears 4,000 different titles scattered across 5 different formats and I might be the only person in N. America to have seen 40 films during the pandemic inside an actual movie theater.

AMC owes me big. Our youngest turned 8 years-old this week and we rented out a local AMC for her and 20 classmates to watch a movie that came out in 2015. The draw of films in a movie theater is still strong but I think it’s fair to say that COVID-19 has changed things forever in that regard.

Star Wars Logo

In 1977, I saw Star Wars on opening day with my friend, Andrew Temes. Toronto was great growing up if you loved watching movies in Art Deco theaters like the Eglinton, University, York, Hollywood, and Hyland.

All of those theaters are gone (condos) but the experience of watching some of the most popular films of all-time on a huge screen with THX sound systems left a huge mark. I’ve been obsessed with movies for almost 45 years.

The demise of movie theaters; a lot of the pain was self-inflicted prior to the pandemic, is a bitter pill to swallow. Hollywood is only interested in high-budget comic book movies and theater chains only want to sell you $15 snacks.

It should surprise nobody that home theater sales are booming and video streaming services are exploding. VOD (video on demand) is the future of home entertainment; Amazon spent $8.45 billion last week for MGM Studios; a purchase price that left many in Hollywood shaking their heads.

Amazon to buy MGM Studios, James Bond Movie

Social media has been rife with ridiculous conspiracy theories that Disney and Netflix secretly orchestrated the closures because they created a dramatic surge in the number of consumers paying both services monthly to watch Schitt’s Creek and The Mandalorian.

The same shows they would have watched even with the theaters wide open and running at full capacity during the summer and into the holiday season.

It’s easy to understand why social media has lowered the bar in regard to news.

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There is no question that the situation forced Disney to pivot and focus more on the streaming side of the business – which makes perfect sense considering the scale of their library and the popularity of the Marvel MCU, Star Wars, and almost a century of classic films and cartoons. 

The decision to release Mulan through Disney+ for an additional $30 met with mixed results.

Disney let go 28,000 employees from their theme park business and has closed dozens of their retail locations. Having visited Disney and Universal Studios in 2021, it’s clear that people are desperate to experience fun again but the Magic Kingdom has not yet fully recovered from its historic losses in 2020.

Empty AMC Movie Theater Parking Lot in NJ

On the theater side, things were bleak for AMC and Regal in N. America in 2020 and Q1 2021. Regal was forced to shutter its theaters globally for second time, and AMC was desperate for a bailout from someone. AMC were ultimately successful in raising capital to stay solvent and are bullish about their long-term future.

Independent theaters were selling wine out the front door to survive or the naming rights to seats as a source of revenue. None of this was enough to keep a very successful independent theater chain in Asbury Park (where we watched films every month) from closing its doors for good in October 2020.

I will not pass judgement on anyone who was afraid to venture into a theater during the pandemic (especially as someone who had COVID-19 in March), but I’ve been to 40 movies since theaters reopened here on the Jersey Shore; my wife has seen even more as she has taken the kids almost weekly.  

The experience was weird. For all of us.

Empty Seats in AMC Movie Theater in NJ

Imagine being the only person in the entire theater (as in the entire complex) and watching movies by yourself.

AMC required that you wear a mask during the entire film; even when you were the only person in the entire building and the closest human being was the poor teenager who scanned your digital ticket from behind a plexiglass shield. 

We did enjoy the very low budget The Last Shift which we saw on a rainy Saturday night after the Sabbath concluded in the middle of the Jewish High Holidays. 

No people in AMC Movie Theater in NJ

Taking my 7 year-old to the 40th anniversary showing of The Empire Strikes Back was exhilarating because she loved it so much – but also depressing because we were the only people in the theater. 

Against my better judgement, I ventured out to watch Jim Caviezel in the Infidel; the only film that had any people sitting in the audience at all – there were 3 guys sitting in the next section who left after about 45 minutes. 

With all of the major releases pushed off into Q2 2021 and 2022; Dune and No Time To Die were two of the latest films to see their release dates changed again, there was almost nothing to see and that clearly motivated Regal to shutter again until vaccination rates hit 40-50% in most places.

AMC Movie Theater Entrance in NJ during COVID-19

The 2021 Academy Awards were a celebration of diversity with smaller independent films stealing all of the limelight; and the lowest television viewership in decades as nobody was in the mood to be subjected to 3-hours of lectures from woke Hollywood celebrities.

Hollywood has both an image and content problem at the moment. Consumers don’t want depressing films coming out of a global pandemic that killed 600,000 Americans and they don’t want to hear lectures from movie stars about January 6th, Biden, Trump, the Middle East, or #BLM.

So where are we?

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Hollwood needs a huge summer season or it’s going to be very hard to justify investing in big-budget films going forward. Wonder Woman 1984 was a box-office flop earning less than $170 million (with a budget of $200 million) globally and everyone seems to be banking on Cruella, and A Quiet Place Part II right now.

Both films will do well but with closures still in place in many countries, vaccination rates in parts of Europe still low, and audience hesitancy a real issue — 2021 is still looking really weak in comparison to 2019. China is the only market where films are booming.

The biggest winner in all of this may be the folks at LG, Samsung, Sony, and Sonos – because the home theater industry will never have a better opportunity to sell more product as consumers have become quite comfortably watching movies at home.

But with the economy still struggling to recover, are consumers really planning on ditching their local movie theaters for good and investing in a high-end home theater experience?

According to Brian Gluck, CEO of ProjectorScreen.com, it may be happening much faster than you might think.

“While we have experienced a decline in commercial business, the residential/consumer market for home theater and projection has surged since COVID-19 restrictions were put in place, including the closure of movie theaters. Even when movie theaters open back up, I suspect there will be a lot of trepidation about returning to an enclosed movie theater,” remarked Gluck when asked how the pandemic had impacted his NJ-based home theater business.

“We have never seen so much demand for outdoor projection equipment as we did this past summer. There is also a rapidly growing market for Ultra Short Throw Projectors, commonly referred to now as “Laser TVs”, which when paired with a specialized ambient light rejecting screen really allow for you to bring projection out of the basement and into your living room as a true alternative to a traditional TV set.” O

“There have been some problems in regard to the pandemic as it applies to the supply chain. Consumers have been forced to wait longer for certain products due to the surge in demand for premium home theater components. Products that are manufactured overseas have taken longer to be delivered but our premium made-to-order projection screens are all manufactured domestically, so we’ve been able to fulfill orders faster,” according to Gluck.

Having just walked out of a Friday showing of Cruella at the start of the Memorial Day Weekend here on the Shore; where we are expecting 2-3″ of rain and very heavy winds until Monday, there are some signs of optimism that the summer 2021 movie season will not be a repeat of 2020.

People are coming back to the movies but there is visible anxiety as 50% of the crowd still wore masks; New Jersey removed its mask mandate on May 28th after almost 14 months.

We probably won’t know for 3 months how consumers truly feel about watching movies in their local theater, but it’s going to be a crucial period for the movie industry which faces a dramatically changed landscape.

Visiting the new Focal Powered by Naim Houston boutique last week we saw first-hand the new architectural lineup from Focal and spoke to the company responsible for its installation; 2020 was one of the busiest years they have ever had for home theater products in the Houston-area. And there are no signs of it slowing down.

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COVID-19 changed everything for Hollywood.

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