The Beginning of the End: Why Movie Theaters are F#%#&@

Walking out of Dune and Spider-Man: No Way Home, I felt a slim glimmer of hope.

We’ve seen both films multiple times in theaters already and the box office numbers have been encouraging.

Spider-Man: No Way Home has earned $1.69 Billion so far ($723 Million domestically) in 42 days making it the most successful release in over 2 years.

Dune has raked in almost $400 Million, but the domestic number of $107 Million had to be very disappointing considering all of the hype.

But for every Spider-Man, Dune, or No Time to Die ($774 Million) that has made money, the studios have taken a huge bath with West Side Story, The Matrix Resurrections, The 355, The King’s Man, House of Gucci, Nightmare Alley, and Sing 2.

January isn’t a big month for new releases but having seen all of these films and more over the past 3 months — audiences are still not coming back.

And to be quite frank — I don’t think things are ever returning to pre-COVID levels with movie theaters.

SoundStage! Publisher, Doug Schneider, and I go way back. Doug gave me my first consumer A/V writing job back in 1998 and we’re only a few years apart in age. We both love going to the movies, but as Doug correctly points out in his latest editorial — consumers are not returning to theaters because the large chains are not giving people a reason to go back.

Everything has changed over the past 2 years and releasing blockbusters isn’t enough of a reason for a lot of people to go back.

Raise your hand if you enjoy paying $11 for popcorn? Or sitting in some poorly anchored recliner in a theater that definitely requires a calibration.

I make a point of watching films in the Dolby Cinema auditorium whenever possible but can someone from AMC explain to me why Spider-Man: No Way Home wasn’t even being screened in that format at my local theater that has one?

Take my money morons.

And Hollywood wonders why consumers are spending money on home theater equipment and dedicated spaces at a record pace?

In case you think I’m being slightly dramatic, let’s backtrack and take a look at my own experience during the pandemic.

Over the Passover break in 2021, we ventured down to Florida to visit my parents and to spend a few days at the parks in Orlando.

Box office numbers were improving thanks to films like Godzilla vs. Kong which we saw as a family at Universal Studios City Walk. 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 60 films during the pandemic inside an actual movie theater.

Many of those films lasted less than a week and died lonely deaths at the box office.

AMC owes me big. Our youngest turned 8 last June and we rented out a local AMC for her and 20 classmates to watch a movie that came out in 2015. The draw of certain 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.

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 for MGM Studios; a purchase price that left many in Hollywood shaking their heads.

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.

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 temporarily let go 28,000 employees from their theme park business and closed dozens of their retail locations; the company has been tight lipped about how many of those employees were brought back.

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.

On the theater side, things were bleak for AMC and Regal in N. America in 2020 and 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.

Fast forward to January 2022 and we find that aforementioned theater under new ownership; we went on opening night and were the only people in attendance in our auditorium.

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 twice), but I’ve been to 60 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.

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. 

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 Q4 2021 and 2022; Dune and No Time To Die were two of the higher budget films to finally get released and earn decent money at the box office.

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 900,000 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?

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

Our most read buying guides of 2021 were the “Best TVs” and “Best UST Projectors” in case you were wondering.

Have movie theaters finally jumped the shark?

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.

We probably won’t know for another 6 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 we saw first-hand the new architectural lineup from Focal and spoke to the company responsible for its installation; 2020 and 2021 were two 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.

COVID-19 changed everything for Hollywood and movie theaters will never be the same.

Related reading:

• Netflix Increases Prices to $19.99/month

• Podcast: VOD and the Future of Movies Post-COVID

• Does Cutting the Cord Make Sense Financially?