Since the COVID-19 pandemic broke out, movie theaters were always going to be one of the most hard-hit industries by quarantine and social distancing measures, but just how deep do these wounds go? Well the stock market might just offer some clues to that, as Monday’s market open saw movie theater companies take yet another big hit after this weekend’s tame box office numbers.
Americans are not willing to risk their health just to go see a movie, a choice mostly validated by the United States’ top infectious disease expert. It’s no wonder then that Monday saw American companies AMC and Marcus tumble -7%, Cinemark -5%, with the Canadian Cineplex and British Cineworld also waking up to similar drops. Even on an overall negative day for markets as a whole, the picture starts to look more grim for movie theaters once the financial charts are zoomed out.
The daily losses are clearly not as bad as performance throughout the year, where all of the aforementioned companies have sunk well over 50% in value in their respective markets, with the sole exception being AMC, which manages to come out on top with an admirable a 27% loss in value during 2020, in a sector that has been ruthlessly bombarded by the consequences of the worldwide pandemic that continues to haunt films from production to release.
Just to put things into perspective, this past weekend the entire North American box office raked in an estimated $13.2 million, which pales in comparison to the $125.4 millions from exactly one year ago. This year the burden has fallen onto Tenet, The New Mutants and Unhinged as the most noteworthy feature films available for moviegoers; but even with The New Mutants enjoying a decent showing, that doesn't quite make up for Tenet’s disappointing domestic performance. As the release dates for high-profile films like Black Widow and Wonder Woman 1984 continue to be pushed further and further into the future, theaters have fewer options for those moviegoers willing to brave seeing a movie in public.
The financial landscape for movie theaters is not looking good at all, with no foreseeable remedy that solves their current problems. The success of Mulan on Disney Plus is a huge concern for theaters, given that at this point, virtually every movie expected to draw big box office is associated with a studio that owns its own streaming service. It's not unreasonable to expect more and more blockbusters to skip the cinema entirely.
Source: CNBC