The coronavirus pandemic is the hottest topic in the news cycle. It is definitely one of the biggest global crises that we have ever faced. The coronavirus outbreak affected the US economy as well as many European economies. China managed to somewhat contain (presumably) the epidemic within its borders and reopened the economy. Although, Wuhan movie theaters were closed only two weeks after opening.
What about the entertainment industry in the US? Unemployment across the board is hitting all-time highs. While the biggest problem for the economy is the fast food and restaurant industry, the entertainment industry is most certainly closely behind. Movies are not being filmed, releases are postponed, Disneyland and Warner Bro parks are closed, there are many other aspects of the entertainment industry that are no longer operating.
Movie theaters are also suffering. AMC is the biggest cinema network in the US. It has thousands of locations all across the US. All of them are currently closed. The company had to furlough many employees and cut their expenses on all possible fronts. Despite their best efforts, it may not be enough to save the industry from a collapse in the nearest future.
What is even more frightening is that movie theaters may not open for months. The AMC company planned to reopen most of its locations by the middle of June. However, their estimations may be further from the truth than we all expected. There are several factors that may affect the future of the movie theater industry.
Movie releases are postponed. Disney, Sony Pictures, Warner Bros Studios, and many other filmmakers are currently moving their huge releases to the next year. Some less anticipated movies are moved back by six-seven months. It means that even if theaters are open by July, people won’t really have a strong incentive to go see average movies that do not have the same impact as MCU movies and other blockbusters.
The credit ratings are falling. AMC received a much lower credit rating from S&P due to not having a certain date when the theaters will be able to operate at full capacity again. S&P experts suspect that many theater chains simply don’t have enough cash and assets to cover their expected losses that will occur in Summer.
People will be afraid to go out. While many are still downplaying the scariness of the novel coronavirus, the realization of the threat will hit hard by the end of April. People will be very much aware of the dangers of gathering in huge numbers. The recent poll suggests that at least 49% of people will not be ready to go to cinema theaters and other public places even after the lockdowns are lifted.
AMC will be bleeding money after the pandemic slows down. We also have another very important factor to consider: many people are now unemployed and do not have any money. Even with the stimulus pack promised by the US government, many people will not be able to afford a trip to a theater. The catastrophic levels of unemployment won’t be fixed within a day or two. It will take months until people will have spare money to spend on movies and other entertainment.
The prospects of AMC seem really bleak amidst the coronavirus outbreak. The cinema chain may never recover from the crisis that we are experiencing right now. Sadly, people can’t do anything meaningful to support the movie theater industry. We all have to sit at home and hunker down until this whole pandemic is contained. AMC, Regal Cinemas, Showcase, and other movie theater operators will have to find ways to stay afloat for at least half a year without strong attendance.