The immediate future for movie theaters in the U.S. is looking a bit bleaker as a new projection places their return in mid-2021.
It seems that every analyst in the marketplace has an idea of when movie theaters will re-open, and it is getting progressively worse. While one this week suggested it would be by the end of the year, another is now saying it will be mid-2021, but his logic does indeed make sense.
Cowen analyst Doug Creutz said in a note to investors, “We had previously assumed that the spread of COVID-19 would be relatively halted, with social distancing requirements significantly lessened by late 2020. We have now extended that timeline out to at least mid-2021; the situation remains very fluid, and we do not rule out the possibility that the impact could last even longer.”
Creutz went on to add how he had reached this projection, saying, “We now expect domestic theaters to be largely closed until mid-2021, in part because we don’t think studios will be interested in releasing their largest movies into a capacity-constrained footprint.”
There are some estimates floating around at the moment that Christopher Nolan’s Tenet needs to take in $800M at a minimum to break even. This number is reached by the original budget and the start-and-stop nature of the marketing campaign surrounding it. Releasing a film such as that into a marketplace with reduced showing and seating capacity is just not going to be a feasible concept.
Should movie theaters remain closed to mid-2021, it raises a lot of very unpleasant questions about the future of the industry. How will theaters survive? How will studios?
It looks as though it is going to be a long road back for the film industry.