The Problems Facing North American Movie Theatres After They Reopen

By Michael Giltz | June 22, 2020 3:04 pm PDT
The Problems Facing North American Movie Theatres After They Reopen

Exhibitors are dying to reopen movie theatres. Studios are dying to release blockbuster films. But will fans be ready to risk dying to see them? That’s the dilemma facing our industry in what could be a cruel summer of dashed hopes and unrealistic expectations. We’ll discuss the new normal and the challenges facing exhibitors after they reopen.

First, here’s where we stand, solely in the United States and Canada, as the industry works towards a new normal during/amidst/after a worldwide pandemic. Some theatres never closed. (Huzzah to the drive-ins!) Others have already reopened. And now the major chains will turn on their lights by mid-July just in time for some highly anticipated films.

With AMC, Regal and Cinemak (among others) on board, new protocols are in place to ensure health and safety, usually the same general steps no matter where you live in the US and Canada. In general, they tend to include the following:

  • Masks must be worn by customers when not eating or drinking
  • Staff will be masked and gloved at all times
  • Digital purchasing for tickets is strongly encouraged if not required
  • Reduced auditorium capacities and socially distanced seating
  • Extraordinary measures will be in place to sanitize theatres between screenings
  • Common points of contact like door handles and bathroom fixtures will be sanitized frequently

It’s unprecedented, it’s intimidating to implement and some worry customers will find suiting up for a movie too much like a 4-D screening of “Contagion.” Certain exhibitors didn’t help with a stumbling position on masks. First, Regal and Cinemark said they would follow local and state regulations, mandating masks when so required. In other words, they would NOT be requiring masks, against the best advice of national experts, unless local guidelines mandated them.

AMC followed suit but failed to maintain the pretense of putting customers first. The company confessed their reopening rule not to require masks was made because they “did not want to be drawn into a political controversy,” thus implying the decision was not based on prioritizing the health and safety of their staff and customers.

Oops. The blowback against AMC was immediate via social media and press reports. Moviegoers suddenly realized the bland promise made by cinema operators to follow local health and safety guidelines wasn’t exactly going above and beyond to make certain moviegoers would be as safe as reasonably possible. To their credit, the major chains reversed course quickly by joining Alamo Drafthouse and others in requiring all customers to don a mask.

David Ehrlich's Tweet About AMC's Mask Decision

This self-inflicted wound should heal quickly. But let’s be clear: this was not a “damned if you do, damned if you don’t” situation. Asking customers to don a mask while sitting in a room for two hours with strangers nearby or a row or two away is not a political question. It’s a question of health and safety.

Going forward, exhibitors should make clear they will follow the advice of medical and science experts. On this issue, that advice has been consistent and clear for months now: masks work. Requiring customers to wear them is no more a political choice than whether a restaurant follows health and safety guidelines when preparing and serving food.

It’s not going to be easy, as this first kerfuffle demonstrated. When “Mulan” debuts on July 24 (or should we say “if”), the problems are going to mount. Here are some of the issues exhibitors will face:

Weekday Screenings
Sanitizing movie theatres is time-consuming and expensive. Do weekday screenings justify the expense? What about weekday screenings in summer? Or around summer holidays? Exhibitors may well decide it only makes sense to screen movies twice a night during the week but with a full schedule on weekends. Otherwise, sanitizing a theatre after a screening that sat seven people for an 11 am showing will break the bank.

Tim Richards, the CEO of Vue International, believes weeknights at least will prove a lot more popular with customers looking to avoid crowds. At last week’s virtual CineEurope, Richards said he expects customers to “time shift to shows during the week.” Agreed, but we still don’t expect 11 am on a Monday or 1 pm on a Wednesday to be wildly popular. The added expense of sanitizing might make those morning and early afternoon showtimes even less profitable than usual.

Making A Profit… or Breaking Even
Exhibitors will be thrilled to break even, especially when facing an audience cap of 50% or even 30% for weeks or months to come. It won’t be easy. If they cut daytime screenings, the long term fear is they just might get audiences out of the habit of going to a movie whenever they want. And that’s a habit exhibitors are loath to break. Exhibitors already open in Europe have some encouraging box office data. As Richards said at CineEurope, “I can tell you that as each day and now each week goes by, the admission variances in the same period last year [are] closing.” In other words, box office is quickly ramping up…and that’s with no new product and terrific outdoor weather.

Disney’s “Mulan” is aiming for a July release date. (Photo: Disney)

Traffic Jam of Big Movies
“Mulan” opens July 24. At the moment, “Tenet” opens one week later. It’s easy to imagine “Mulan” playing on literally every screen of your local multiplex. Even at 30% capacity, that’s real money. Sure, “Mulan” will have to run for months and months to earn the box office it deserves (and repeat customers might be less common). But isn’t that the dream of most exhibitors, a movie with legs?

Not so fast. One week later “Tenet” is ready to go. It, too, could play on every screen of your local multiplex, especially with a 30% cap. But “Mulan” won’t be remotely close to tapped out. And a week or two later, ANOTHER big film will be ready to go. With blockbusters needing months to run rather than weeks, the backlog will soon prove a nightmare for studios and exhibitors. Any one of them can make coin if they’re on most or all available screens. Or on half the screens if they run for months. But once “Mulan” and “Tenet” are in place, it will take months for them to reach their potential. And that leaves no room for anyone else. Who’s going to break the logjam? Every studio recognizes the market simply can’t handle that many movies at once. They just want someone else to blink first and move to 2021.

Sticking To Sanitizing Routine
The new health and hygiene protocols are great. But how great will they be followed? Will they be adhered to after top executives overseeing any reopenings head back to headquarters? Given the transitory nature of most movie theatre staff, maintaining that rigorous cleanliness won’t be easy. Theatres with sticky floors and popcorn littering the aisles quickly get a bad rap. Sanitizing theatres is both harder to spot and a lot more important. Will the teenagers doing the bulk of the new work — probably while understaffed — stay on top of it? If history is any judge, this won’t be easy.

Inequality Amongst Cinemas Worsening
Smaller movie theatre chains and “mom-and-pops” are always up against it. The behemoths have the market awareness and the deep pockets to weather most storms. But no one has ever weathered a storm like this. Months and months without any cinema being open is unprecedented. And demands for high-tech sanitation are a new and costly expense. Didn’t we just pay off our digital projectors?

Can smaller operators begin to match the standards that big chains will boast about? The Haves may be playing a game of “cleanliness being next to godliness” that the Have Nots can’t play, much less win. Any expectations a smaller cinema has about customer loyalty will vanish the minute someone gets deathly ill or dies from COVID-19 and it’s traced back to a Friday night out at the movies. Indeed, the whole industry should plan what to do WHEN a case of community spread is blamed – rightly or wrongly – on movie-going. Defensiveness isn’t going to help.

Regal safety measures are in line with what other exhibitors are promoting. (Source: Regal)

Mask Enforcement
Who’s going to enforce the requirement to wear a mask, anyway? The high school student that used to tear tickets? The manager busy overseeing the umpteenth cleaning of the restrooms that day? In many instances, theatre staff gave up long ago on enforcing the “no cell phone” rule except for the most egregious offenders. People routinely take out their phones and scroll through their latest Facebook and Instagram updates while movies are playing. Other customers put up with it or initiate arguments.

You can now multiply that problem by a thousand. Someone texting during a movie is annoying. Someone taking off their mask for two hours could be risking your life; some people won’t stand for it. We’ve already seen major disputes with customers tossed off airline flights for refusing to wear a mask. Who’s ready for endless disruptions as staffers busy wiping down door handles are asked to act like bouncers at a bar and give unruly customers the heave ho…or break up fights between customers who don’t bother to call the staff before calling each other out? This safety issue has no easy solution…and frankly no difficult solution either. Consider it a long-term headache.

Concession Sales Cratering
The only thing worse than being closed for business is being open for business and not selling any popcorn or soda. Sure, cinemas will sell SOME concessions revenue, even with a reduced menu. But ticket sales will be down even under the best of circumstances. And the people who do show up will be far less likely to enjoy popcorn handed to them by a masked and gloved attendant. It will be safe. It will be delicious. But it won’t be fun, especially with a mask on. Since concessions are the beating heart of profits for every exhibitor, that’s going to make hitting goals and breaking even week to week that much harder.

Full Capacity By Thanksgiving?
Top exhibitors hype up the possibility of imagining 50% capacity soon and “full” capacity by Thanksgiving. We wish and hope so. However, with the number of people testing positive rising in a majority of US states, this could be Pollyannaish thinking at best. Instead of preparing for bustling crowds and life being back to normal come November, exhibitors would do better to prepare for a long slog with attendance nowhere near normal…and cresting and falling along with COVID-19 spikes in your area. We’d love to be proven wrong on this.

Safety measures rolled out by EVO Cinemas in Texas upon reopening. (Source: EVO)

The Next Wave
The second wave is coming. As it has with every pandemic in recorded history. The first wave of the coronavirus pandemic is still ongoing. The states that opened up early without flattening the curve and/or without putting in place widespread testing and contact tracing are paying the inevitable price that medical and pandemic experts warned us about. COVID-19 is spreading far and wide while ICU beds are filling up in places like Arizona, Texas and Alabama. But these rising numbers are not signs of the second wave. It’s simply the fallout from a bungled response to the first wave, at least here in the US. Oh to be an exhibitor in New Zealand or Taiwan. (Canada’s picture is different, with the Ontario province the most troubled but also the one doing the most testing.)

Other countries, and thus other exhibitors, face different challenges as they adjust to their new normal. In the US, that new normal is very different from the handful of countries that followed the science, did an exemplary job and yes, got a little lucky. (Or learned their lesson the hard way last time after dealing with previous pandemics that didn’t reach the US with the same force.)

The overwhelming consensus is we should expect a second wave in the winter. (Or in a hope that may soon prove sadly outdated, around the time we hope fans are at their local cinemas watching “Dune,” “Coming 2 America,” “West Side Story” and “Top Gun: Maverick.”) It may well be worse. Corporations with stock prices to worry about might speak positively to shareholders and hope for the best. But exhibitors everywhere would do well to prepare for the worst openly and honestly. That’s the best way to maintain the loyalty of customers and investors in the long term.

Richards of Vue International emphasized the necessity of building confidence with employees, studios, politicians and the public. As he said at CineEurope, “People being confident that they can come out to our cinemas safely and enjoy themselves out of home is vital to [the] long term success and viability of our business.”

So do your best. Follow the science. And change course quickly and responsibly when new facts emerge. If you want to be in business when “Avatar 2” and “Avatar 3” and “Avatar 4” and “Avatar 5” open up, it’s best to act responsibly, speak humbly and make decisions based on the best advice of outside medical experts — not the advice from those telling you what you want to hear. The experts you hire or consult with should be there to help you implement safety guidelines, not come up with ones that contradict the experts but soothe your short term bottom line.

Moviegoers want to go to the cinema but they’re watching carefully. In this pandemic as on Pandora, “I see you” is both an acknowledgement and a warning.

Michael Giltz
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