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Communication Professor, Darden School of Business, University of Virginia. Written for CQ Researcher, February 2021 | It is likely that the movie theater industry will rebound after the pandemic, but whether it gets back to prepandemic levels remains to be seen. Consumers will need to feel safe in theaters, and studios will need to be able to consistently produce movies. Movie theaters can return to profitability if they adapt to consumer viewing preferences, consistently deploy cutting-edge technology and reimagine what an event is to consumers. Until recently, the industry has not adjusted its strategy for releasing movies to accommodate new technology or digital business strategies. Producers should not automatically campaign to have their movies debut in theaters. Instead, they should assess the consumer appeal and genre. Theaters will and should lean into exhibiting blockbuster and franchise movies, which draw large audiences. Studios have signed deals with theaters to shorten exclusive theater windows and/or allow them to debut movies on other platforms and services alongside a theater opening. Theaters can earn profits from these alternative movie debuts, which may prove to be an essential financial buoy. Primary external threats to theater viewing include showing movies on smartphones, tablets, laptops, desktops, smart televisions and other devices. This allows for on-demand movie viewing. Also, consumers have fairly sophisticated technology in their homes that allows them to mimic an immersive theater viewing experience. To combat these threats, movie theater executives need to give consumers a reason to go to a theater to see a movie. Movie theaters may consider expanding the amount of available 3D screens and embracing fine food and drink menus (as some movie theater chains already have). It is also possible to offer concessions outside of theaters to drive sales. Theater executives should consider negotiating for streaming rights to movies and debut them on developed apps, although this is already a heavily crowded marketplace. Movie theaters will need to be on the cutting edge of digital technology and entertainment. This includes anticipating what consumers may want to experience beyond 3D movies, and may even include virtual reality, augmented reality and 4D experiences. Consumers expect more from their theater-going experiences, and theaters will need to continue to innovate at a high level. This will help theater chains combat high revenue volatility and competition. A market will always exist for people who want to leave their homes to enjoy an event, whether it is in a theater or at a live concert. There needs to be a concerted effort to create events at movie theaters, or other experiences that people cannot enjoy from their living rooms. Thinking on those levels is a way for the movie theater industry to be financially solvent moving forward. | Con
Screenwriter; Associate Professor of MFA Film and Entertainment & Media Studies, University of Georgia. Written for CQ Researcher, February 2021 | I'm an incorrigible optimist, but after the cataclysmic shifts of 2020, I'm looking at the future of movie theaters through a more pragmatic lens. As a lifelong cinephile, I hope my prognostications are wrong. The cons: Technology is improving faster and is more affordable and accessible than ever. If you didn't have a way to watch movies at home before March 2020, you most certainly are connected now, and home viewing is much cheaper and more convenient than going to a theater. Netflix announced it will debut 70 films in 2021 (the top five studios in prepandemic times could release at most 90 theatrical titles combined). The lines between cinema and TV have blurred. Even cineastes Martin Scorsese and Spike Lee have learned to embrace streaming platforms for distribution. Disney has spent billions to launch its streaming platform, Disney+, and already has almost 95 million subscribers. Once Disney recoups its investment in streaming, I doubt that it, and its competitors, will want to unplug that revenue stream. In 2011, MoviePass was launched — and failed to attract audiences with a flat rate for unlimited monthly theater visits. This desperation to remain relevant in the face of technological advances, including video games, virtual reality and augmented reality, might be viewed as the beginning of the end of the modern movie theater. Younger generations are accustomed to toggling between watching a movie and interfacing with another electronic device. That's not possible in theaters where cellphones must be turned off. Traditionally, a theatrical release was required for movies to qualify for Academy Award consideration. In 2020, the majority of theatrical releases premiered on streaming platforms, yet remain Oscar-eligible. That's unlikely to change. Last year's Oscar winner, Parasite, set precedents for winning Best Picture and Best Foreign Film, and the movie was profitable but not a blockbuster in the United States. Still, the film demonstrates the growing U.S. demand for global fare, best suited for streaming. Parasite was a ratings juggernaut when it aired on Hulu — which does not bode well for movie megaplexes that have become reliant on mega-budget spectacles. Traditional forms of advertising have been superseded by algorithms based on the acquisition of customer data by streaming platforms. Theater exhibitors cannot compete with the targeted messaging and trackable consumer behavior that binge-able episodic television programming provides. Movies are still beloved and, happily, that's not going to change. But how and where we watch them, that communal experience, could be relegated mainly to big tentpole/event movies, bolstered by the tug of nostalgia. When all these factors are considered, there is reason to believe that the movie theater is an endangered species. |
