#3 theater chain Cinemark has inked the limited theatrical window deal that AMC, the largest theater chain in the world, has been mocked by many in the industry for accepting.
What I found most interesting about this somewhat predictable announcement is how long Cinemark says it has been evaluating this deal.
Cinemark CFO and COO Sean Gamble said, “This isn’t new,” and that the theater chain was already in talks of a deal like this even before the pandemic arose. Now just seemed like the ideal time to start implementing this strategy given the global situation. “Clearly, we’re factoring in the current environment,” Gamble said.Cinemark Will Show Films Including ‘The Croods 2’ for a Shortened Theatrical Window | Cord Cutters News
Those reading and following this site know we’re huge proponents of shortening and someday eliminating the theatrical window (see: Good deal – AMC strikes historic deal with Universal to shrink theatrical window to 17 days). In 2020, the theatrical window doesn’t make good customer sense. Sooner or later businesses absolutely must listen to their customers. Movie lovers want to watch movies where and when they want, similar to how the music industry faced the streaming challenge.
For new readers, we prefer to watch new movies in theaters first. We like watching movies at home, too, yes, but for us, the theater experience is more desirable. We don’t want to see movie theaters disappear and don’t believe they will. Of course some of them will, maybe a lot of them will someday, but we believe there will always be movie theaters — at least in our lifetime.
Reducing and even possibly eliminating the theatrical window someday will not spell the end of movie theaters. A reduction in them, sure, but people going out to see movies they can see at home is not the question. Going out is going out. You can’t go out when you stay home. Sure, there will be fewer movie theaters, but that just means smaller theater chains and independents have a chance to claim the business over these mega corporate chains. I’m OK with that, even if it drives up the price of a movie theater ticket.
Would like to see some sort of unlimited or heavy viewer monthly subscription program continue — and I think that’s a safe concept in 2020, as moviegoers have proven they like the idea of these plans vs. per ticket pricing. After high concession fees, which are necessary to theater survival since they make very little off the actual movies, it only makes sense to encourage repeat customers with a subscription program.
Here’s another thought: Netflix buys theaters and provides another subscription tier that includes free movies at their theaters for say another $10/month. Hello Netflix, are you listening? This is an additional revenue and distribution for your films avenue. It’s better to add something versus simply raising your subscription prices and doing the same thing (see: Will Netflix Price Itself Out Of The Streaming Market?)
The lines of streaming and movie theaters are blurring. This will only continue to happen until theaters become, someday, more like arcades. You can play arcade videogames and pinball at home, but some people still enjoy going out to arcades. Some arcades have even developed all you can play models. Pay a door fee and every game inside the arcade is free to play.
I keep going back to the reality that people don’t want to stay inside their homes that much. They want to get out once in awhile and do things socially. While you can have dates at your house, that’s not usually the first place a date wants to go for obvious reasons. Hey, come over and Netflix and chill. Yeah, we know what you really mean. Movie theaters, restaurants, those are somewhat neutral dating locations.
Yes, the pandemic has impacted dating venues also, but once the vaccine comes out and people are less likely to get sick, the interest in going out and dating and other activities in public will increase exponentially. The existing movie theater chains believe they’ll have it the way they did before and while I think they will have much increased attendance over what’s happening right now, the pandemic will have some kind of permanent impact. My guess is that financially 2019 will be eclipsed in the future, but the average attendance will continue to fall off, because some customers will be even less likely to want to return, having formed new movie watching habits that don’t involve movie theaters. The same thing happened with gaming and arcade, because, hey, you can play the games at home versus going out and sinking a bunch of quarters into machines.
In the scheme of things, is it really that big of a deal to wait a couple months to see a new movie? Not when there are so many new movies coming out, no. The big budget movies that appear exclusively in theaters will continue to draw crowds out, but there are a small finite number of those movies that can be made. I’m not sure mega theater chains can survive waiting those out any longer, they need to adapt to a different theater strategy that encourages coming to the movies for a wide selection of new movies and not only or primarily when major large budget films are released.
Reducing the theatrical window is only one part of this change in movie theater business. They need to do more. Offering to rent their entire theaters for groups is a curious idea and perhaps a step in the right direction. Birthday parties and corporate events have always been a way to encourage gatherings at theaters With social distancing, that doesn’t work very well during the pandemic, but once the pandemic subsides using the real estate for events is definitely one way to cover the rent and expenses.
There is the stupid stubbornness for some corporations. Cineworld/Regal seems to be in that fighting to hold onto the status quo mindset.
Speaking of Cineworld/Regal, the #2 theater chain in the world, remains closed. You can’t make any money while you’re closed and they admit as much that they are just hunkering down to conserve capital because it costs them more to be open and not having customers, but at some point that just becomes silly. What business is in business when the doors are closed that the lights are dark? Seriously.
Do I think they’ll buckle and sign the shortened theatrical window deal too? Yes, they will. They won’t have a choice to continue standing by past business beliefs and act like they have a choice. Then again, they switched away from Coca-Cola to Pepsi and they remain closed, while both AMC and Cinemark are open and trying to weather the hard times. They doubled down and re-closed the New York and California locations.
They are taking a huge PR hit the longer they stay shuttered. Maybe for their investors this makes sense, but at some point the brand damage might be irreparable. Maybe they’re already there. Where are their customers like us going? To their competitors while they are closed. If they wait too long to reopen we might have found a new business to patronize instead. We can’t be alone.