Between the cancelation of ‘summer blockbuster season,’ the meteoric rise of streaming and downloading services, and the public’s hesitation to resume out-of-home activities, theaters face an uphill battle to bring movie-goers back to the theater.
At the end of September, while overall consumer spending rebounded to just 3.8% below January levels, spending on entertainment and recreation has dropped by nearly 60%. Spending priorities have shifted, and movie theaters are doing their best to adapt their business models to keep the industry alive as people regain confidence and get back to watching movies on the big screen.
Streaming services are stiff competition for theaters
Big screen theaters have been competing against streaming services like Netflix, Hulu and Amazon Prime, which have seen impressive growth in recent years, but movie houses stepped up their game. They offered better seating, improved picture and sound quality, and gourmet concessions, but when theaters closed due to Covid-19 precautions, the trend towards streaming accelerated.
A 2019 survey showed that just 14% of respondents went to the movies more than once per month and 46% said they went just once per year, but theaters have kept box office revenue climbing over the past several years.
Their biggest draw? Blockbuster films like the Marvel series, which major film studios initially release exclusively to theaters. The traditional big screen run is 90 days before films are released to second-run theaters or for streaming.
Summer blockbuster season can make a theater’s year
This spring, major film studios put theatrical releases on hold, so when a few theaters reopened in early May, they did so without new material to screen. They instead showed classics and popular catalogue films, but the response was disappointing.
The ‘summer blockbuster season’ runs from May through Labor Day, and movie theaters can make nearly 40% of their annual revenue in this window. For any given film, 40% of the total box office take is usually made in the first week of its release.
To stay afloat without new releases, some theaters pivoted early and others are making a comeback as new material begins to roll out.
Vintage pricing and showing the classics
AMC Theaters, the largest theater chain in the U.S., enticed moviegoers back into seats with free concessions and a reopening day ticket price of just 15 cents, the average price of a movie ticket in 1920. They kicked off the August 20th reopening of 100 of their theaters with showings of catalogue classics like Ghostbusters, Grease, and Star Wars V: The Empire Strikes Back, hoping to get customers back into seats and reassure them that it was safe to do so.
Taking the theater experience home
A number of independent art house theaters managed to pivot when they had to shutter their doors, offering virtual, curated film experiences for home viewing. Loft Studios, a non-profit theater in Tucson, AZ, launched their online portal almost right away with the support of film distributors, ‘opening’ new release films on a set schedule and posting content selection lists. FilmScene in Iowa City created a Virtual Screening Room with programmed content, and offered concessions bundles on weekends for curbside pickup.
At the beginning of pandemic closures, Classic Cinemas, a small chain of vintage-style cinema houses, helped people recreate the cinema experience at home by selling their theater-style popcorn for curbside pickup.
Private screenings for your pod or office
Alamo Drafthouse, a Texas-based theater chain, launched its rent-a-theater program last month, offering private screenings of catalogue movies for a flat fee, plus minimum concessions purchase. Masked employees deliver food and drink seat-side during the film, and the chain says the success of private screenings so far indicates that they will continue offering them in addition to regularly scheduled movie screenings.
Drive-ins were the place to be this summer
When Covid-19 protocols shuttered indoor movie theaters, the 300+ drive-ins operating across the U.S. became the perfect place for socially distanced events. While showing catalogue films, drive-in owners could also see the need for outdoor social spaces, so they began hosting other events. From weddings to concerts and graduations, attendees could socially distance in their vehicles and still come together to experience a live show or momentous gathering.
New industry guidelines for theaters
In August, the National Association of Theater Owners, which includes the big three theater operators, Regal, Cinemark, and AMC alongside more than 300 other members, launched a new health and safety program. The program, CinemaSafe promotes consistency across the industry by providing a new framework for theaters to follow to help mitigate risk of Covid-19.
CinemaSafe protocols and guidelines were developed with the input from epidemiologists, the CDC and the WHO. Measures include:
- Masks for employees and for guests when not eating or drinking
- Maximum capacity of 50%
- Fully-functioning HVAC systems with improved ventilation
- Frequent hand-washing
- Theaters should be sanitized between seatings
The guidelines further stipulate that employees should receive new health training and that ticketing and concessions systems should leverage contactless payment and online ordering to minimize cash transactions.
The Klēn app can help reassure movie-goers that individual businesses are following new industry guidelines and taking precautions to ensure a smooth and safe reboot of the big screen experience.
Open for business, but are we ready for it?
As of late September, three-quarters of U.S. movie theaters had reopened, but movie-goers have been hesitant to return. According to a recent poll by Morning Consult, just 18% of respondents felt confident returning to movie theaters.
As theater owners contend with increased costs of staffing, protective gear, upgrades and enhanced cleaning protocols, they are also contending with the slow recovery of consumer confidence.
Klēn offers a simple, AI-driven solution for theaters to monitor updates to regional and industry regulations, and stay transparent to customers about the steps being taken to promote a healthy theater environment.