AMC Entertainment, the world’s largest exhibitor, announced its long-delayed first-quarter financial results June 9 with a $2.2 billion loss. AMC also told investors that it expects to be fully opened by next month — a well-timed announcement, given California’s own declaration that movie theaters can open June 12 under certain, safer conditions.
However, what remains to be seen is the impact of those conditions on the exhibitors, who may not be able to turn a profit; on audiences, who may find they take the fun out of moviegoing; and on the studios, who are very eager to finally see some tentpole revenue after a months-long drought.
A source who had a hand in the California regulations told IndieWire that exhibitors and studios are pleased by them, and they’re expected to serve as initial, short-term rules, or even suggestions. They are framed as minimum conditions, allowing counties and local municipalities to impose tougher rules. While there’s no formal timetable, wording suggests they’re meant to be evolutionary; those who hope things could improve by July 17 for “Tenet” have reason for optimism.
This is the cornerstone of the California guidelines: “Movie theaters must therefore limit attendance to 25% of theater capacity or a maximum of 100 attendees, whichever is lower.” Most modern auditoriums have fewer than 400 seats, but some of the most desirable places to see an event film are larger. These include the Cinerama Dome at the Arclight Hollywood, many IMAX screens, and other prime big-city locations like the largest screen at New York’s AMC Lincoln Square (rules for New York are not yet released).
Technically, 25 percent shouldn’t be a major issue; as others have noted, theaters don’t often play their films to packed houses outside of opening weekends for major titles. However, that’s exactly what’s expected from “Tenet” and “Mulan.” There is a myriad host of outsized hopes attached to these films: the need to demonstrate that theatrical exhibition is alive and well, the need for studios to show a profit on these expensive movies.
And, last but certainly not least, the need for theaters to bring in revenue to make up for billions in losses. Can that be done at 25 percent? “Tenet” and “Mulan” initially might revive business; as the only films playing in many multi-screen locations, perhaps enough capacity exists. However, it’s unclear if profit is even possible. “Under these conditions, I can’t make money,” said one exhibitor.
Beyond attendance limitations, here’s a short list of the rules and strongly worded suggestions. Seats must be blocked off to ensure distancing. If possible, ticket holders should buy in advance, pre-select seats, and pre-order concessions. They should enter the building at showtime and go quickly to their seats. Ushers should monitor each auditorium during entering and exiting. One way directions should be in place, and people should enter and exit the building at different points. Parking lots should be restricted to 50%. Group seating is only for those who live together. Optimally, all seats would have covers that would be changed after each showing.
This suggests several scenarios. One is that theaters get busy — as everyone fervently hopes — and respond by increasing staff to handle all of the monitoring and seat-cover replacing even as they restrict capacity and effectively reduce concession sales. Or, theaters get busy and choose to view the rules as ideal best practices, but not practical.
It’s also possible that not enough people come to make any of the limitations a going concern. Those who are already anxious about returning to theaters (and per polls, there are many) may look at the ascetic prospect of moviegoing and decide to stay home.
It’s worth noting that a theater chain usually has as many leases as it has complexes. A lot of these are in renegotiation, not only for base rent but also payment for the months when theaters were closed. Exhibitors also may have unpaid film rental due to distributors. It’s possible that operating under these rules means losing more money.
Nothing says these rules are long-term — but nothing says they are not. How do theaters operate in later weeks, when multiple major films are supposed to be playing at the same time? (This also can’t address what happens if the infection curve rises; even this week, California saw its largest-ever number of new cases.)
The greatest known unknown may be this: How much do these rules impact the theatrical experience? In particular — and only opening big movies will reveal this — how important is the experience of attending a full, enthusiastic theater on opening weekend? Does a smaller crowd impact response, including word of mouth?