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What If Moviegoing Is No Longer Fun? The Frightening Realities of COVID-19 Exhibition

Theaters are finally scheduled to reopen in a few weeks, but for exhibitors, that means their problems are only beginning.

Of all the challenges facing the exhibition industry, no one expected the insurmountable hurdle presented by a tiny piece of cloth. Face masks may be key to preventing the spread of COVID-19, but they have also become a symbol of political tribalism. That’s a battle top chains like AMC, Regal, and Cinemark never wanted to fight, and they tried to skirt the issue when they initially announced that, upon reopening, masks would be optional.

It didn’t work. Would-be audiences took to social media to announce that if masks were only a matter of preference — well, then they’d prefer to avoid buying tickets. AMC and Regal will now require face masks for moviegoers and staff alike (Cinemark remains a holdout), but the underlying problem is that theaters may be particularly unsuitable in the post-COVID-19 world.

For exhibitors, it’s a terrible conundrum: No number of precautions can restore the luxury of business as usual. Theaters face a unique set of challenges. Most retail outlets require short visits and while it may be inconvenient to ensure that patrons are spread out, it’s doable. Restaurants and bars are more challenged, but many have adapted. Theaters, however, are designed to bring together larger numbers of people seated close together indoors, with recirculated air, for periods of at least two hours.

Theaters are damned if they do, damned if they don’t. Here’s why.

The Mask Problem

Many were shocked that major chains wanted to leave masks to customers’ discretion, but theaters know that their customer base is comprised of 18-35 year olds — AKA, people who are less rigorous about wearing masks. Then there’s the difficulty of enforcement. Consider the strain on staff, the near-impossibility of monitoring usage during screenings, and the potential for contentious patrons. Cell phone disputes would look minor by comparison.

However, not requiring masks is just as problematic. The customer base for specialized titles are people over the age 50, who also tend to be more concerned about their health. This was a no-win situation, made worse by AMC CEO Adam Aron’s recent tone-deaf comments about not wishing to get involved in a “political” issue. But it is hardly the only one.

Early Openings Are Critical and/or Could Do More Damage

Top circuits targeted reopening in mid-July — three weeks from now — even as it remains unclear whether New York and Los Angeles will permit it. After months of losses, reopening means a chance to prove that the theater-first exhibition model is still the gold standard. But what if reopening only makes things worse? What if top films like “Mulan” and “Tenet” — now pushed to late August — perform below what would have been expected pre-pandemic? Certainly any analysis should be graded on an easy curve. But shouldn’t these films benefit from less competition and pent-up audience demand? That remains unclear, but flat results could harm theaters almost as much as extending the closure.

People wearing face masks ride an escalator at the High Speed Railway Station in Guangzhou, Guangdong province, China, 12 March 2020. Daily life in China has been heavily affected by the outbreak of the COVID-19 disease caused by the SARS-CoV-2 coronavirus, which originated in the Chinese city of Wuhan and spread around the world with China, Italy, Iran, and South Korea heavily affected. The disease has so far killed at least 4,600 people and infected over 123,000 others worldwide.China Covid 19 epidemic daily life, Guangzhou - 12 Mar 2020

People wearing face masks ride an escalator at the High Speed Railway Station in Guangzhou, Guangdong province, China

ALEX PLAVEVSKI/EPA-EFE/Shutterstock

Reopening Isn’t Necessarily Good For Financials

A closed theater doesn’t make money, but it also doesn’t have staffing costs or film rental payments to distributors; rent may be deferred. Once theaters open, all of that changes and then some: Theaters will also be responsible for the elevated costs that come with new safety demands. When top titles open, studios will expect their usual cut of about 60 percent; the supplemental films — often provided at a lower rental — won’t be there to add to grosses. Theaters could bleed as much money open as they do while closed, especially if the public isn’t ready to return en masse and studios continue to delay most films.

The Theatrical Window Might Not Hold

Even before closures, studios wanted to diminish the current 90-day theatrical window (and 75-day window for premium VOD). COVID-19 made direct PVOD a practical, if controversial, option, one that inspired AMC head Adam Aron to swear that he’ll no longer do theatrical business with PVOD leader Universal. That’s a mighty oath, but it doesn’t make a lot of sense. If major studios choose to shorten the window, they can; make this change on their own, what can theaters say then? Theaters need all the product they can get, and aren’t in a position to make demands.

What If Theaters Have to Close Again?

At this writing, the virus is surging. Bars are closed again in Texas and California. Last week, Apple closed down some of its stores after reopening a handful of locations. Theaters could well find themselves in the same situation, which would be  financially and psychologically devastating. It would be tricky to keep trained staff employed for short-term bursts. But this may be the worst-case scenario.

What If Moviegoing Isn’t Fun Anymore?

Theaters can’t wait for a vaccine. By that uncertain date, many would close permanently, leaving operators in bankruptcy and studios focused on other platforms. But what if going to the movies pre-vaccine means the fun is gone? Traditionally, many customers love to swarm to top films on opening weekend, specifically seeking the pleasure of sold-out shows. How does that work with social distancing, face masks, and the tensions they bring? Will the fear of someone coughing destroy the entertainment value? Movie theaters are made for escape, but that’s a tough proposition if they look like a death trap.

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