2020 At The Boxoffice

Josh Steinberg

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I find it all kinds of bizarre that these places are being legally prohibited from doing business but are being made to pay all bills as if they were open. And I find it even more bizarre that the pandemic has required pants tightening and sacrifice from everyone in all walks of life, except for the landlords who must be made whole no matter what. And it’s even more baffling that landlords are generally being inflexible about rent payments for all industries, forcing otherwise healthy businesses to shutter. It seems very short sighted. Any establishment that’s closed or doing reduced business due to the pandemic is not going to be replaceable during the pandemic and probably for a great deal of time afterwards. When a landlord kicks out a theater or a restaurant for non-payment of rent during this crisis, it’s not as if someone else can just open up a new business in that space and begin paying rent immediately. The place will just be vacant and the landlord won’t get any rent anyway. Throw out enough businesses and when the pandemic ends, there will be far more available real estate than there is demand for it, which will depress prices further and result in even less rent in the future. And it’s not like you can put an entirely different business in a space custom built for a theater, so that just means demolishing or retrofitting the building and starting over.

It makes no sense and is tremendously shortsighted. A theater or restaurant that reopens successfully next year and has a preexisting lease at pre-pandemic rates will still be worth more to a landlord that having the building vacant until next year, then having to renovate the space and then having to find a new tenant at what will almost certainly be lower market rates.
 

NBPk402

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I used to go quite often to Theaters, but in the last 20 years I changed to once or twice a year. For me I like to have the best experience possible if I am going to pay the price they want, and the experience over the last 10 years has not been good at all. The theaters have went to not framing the movies properly, adding electric recliners, and serving food and drinks to the seats. The serving food and drink is one reason I will never step foot in a theater that does this...I want to enjoy the movie and not have someone delivering food and drink in front of me thus disturbing the movie. Now since we have moved to Mexico we do not have to deal with that at all. The bad thing here is the theaters local to me do not have Atmos, but what they do have is audio that sounds much better than the theaters in the USA...maybe that is because no one messes with the audio after it is tuned? Another thing is the movies are about the same price as renting from Redbox, and the concessions if you go on certain days are 2 for 1.
 

Josh Steinberg

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I think concessions and the business model behind them should also be re-examined when the pandemic ends.

Most theaters report that it’s the concessions and not the films that make the business viable and I think that’s just a recipe for disaster that’s been accepted for way too long. If the primary purpose of your business (showing movies) isn’t economically viable on its own, then the business isn’t viable and needs to make changes. If theaters cannot survive solely on their given trade of exhibiting films, the entire model needs to be adjusted. I don’t have anything against concessions and am not saying they should go away but if that’s the only thing keeping the business afloat, the business has serious structural issues which need to be addressed. If me going to a movie and not buying a popcorn is a danger to their business model, and it is, that business model is broken.
 
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Ejanss

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I think concessions and the business model behind them should also be re-examined when the pandemic ends.

Most theaters report that it’s the concessions and not the films that make the business viable and I think that’s just a recipe for disaster that’s been accepted for way too long. If the primary purpose of your business (showing movies) isn’t economically viable on its own, then the business isn’t viable and needs to make changes. If theaters cannot survive solely on their given trade of exhibiting films, the entire model needs to be adjusted. I don’t have anything against concessions and am not saying they should go away but if that’s the only thing keeping the business afloat, the business has serious structural issues which need to be addressed. If me going to a movie and not buying a popcorn is a danger to their business model, and it is, that business model is broken.
And that's one reason AMC is going under without movies or concessions:
Chain plexes overbuilt themselves during a 90's movie boom we don't have anymore--now that franchise-hungry studios are cutting back on "middle tier" action movies and romantic comedies to focus chiefly on name brands and studio-icon remakes--which means that much MORE brick-and-mortar overhead supported by less and less business. It takes a lot more power and minimum-wage employees to keep a half-empty 15-screen the size of a Wal-Mart running, than a two-thirds-empty 3-screen one the size of a local restaurant.
And, since 90's-00's studios thought they were on a money-printing roll, they thought it entitled them to a bigger cut of the ticket sales, even for what movies the chain could sell. Which is why concession prices, the only money the theater was allowed to keep, skyrocketed, audiences mutinied, and prices spiraled up again to stay alive.

In the 80's of smaller independently or regionally owned 3-screen theaters, there's less business per day, but more days to do business, as it's in a more accessible location, the prices were usually lower to make moviegoing more of an impulse indulgence, and thus more weekday business--
As opposed to monomaniacally shaping the industry around three-day "event" Record-Breaking Weekends, to make up for movie shelf-life that's now a fraction of what it was with three times the screen saturation.
An independently owned 3-screen was also more able to rotate out an empty-theatered flop in favor of a different title audiences wanted to see--thus bringing more variety to the smaller suburban houses--or even organize their own Fathom-like classic screenings, while the chains have to remain in "service" to the studios, keeping that last room filled with last March's new-release flop until something comes to replace it.

What can fix the industry, once we reopen? Hashtag: #BurntheCineplexes.
 
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Malcolm R

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I find it all kinds of bizarre that these places are being legally prohibited from doing business but are being made to pay all bills as if they were open. And I find it even more bizarre that the pandemic has required pants tightening and sacrifice from everyone in all walks of life, except for the landlords who must be made whole no matter what. And it’s even more baffling that landlords are generally being inflexible about rent payments for all industries, forcing otherwise healthy businesses to shutter. It seems very short sighted. Any establishment that’s closed or doing reduced business due to the pandemic is not going to be replaceable during the pandemic and probably for a great deal of time afterwards. When a landlord kicks out a theater or a restaurant for non-payment of rent during this crisis, it’s not as if someone else can just open up a new business in that space and begin paying rent immediately. The place will just be vacant and the landlord won’t get any rent anyway. Throw out enough businesses and when the pandemic ends, there will be far more available real estate than there is demand for it, which will depress prices further and result in even less rent in the future. And it’s not like you can put an entirely different business in a space custom built for a theater, so that just means demolishing or retrofitting the building and starting over.

It makes no sense and is tremendously shortsighted. A theater or restaurant that reopens successfully next year and has a preexisting lease at pre-pandemic rates will still be worth more to a landlord that having the building vacant until next year, then having to renovate the space and then having to find a new tenant at what will almost certainly be lower market rates.
Good points, and not necessarily untrue, but at the same time towns/counties/states have not stopped collecting property taxes or other fees related to property ownership, utilities are still providing services delivering electricity and water/sewer and wi-fi, physical buildings still need upkeep and repairs/renovation.

I don't think landlords are necessarily the bad guys. They have bills to pay, too. You would have to convince everyone from the state to the municipality to the utilities to stop collecting their money, too.
 

Ejanss

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And it’s not like you can put an entirely different business in a space custom built for a theater, so that just means demolishing or retrofitting the building and starting over.
Maybe not for an old-school palace theater or a highway cineplex, but I can name what happened to EVERY SINGLE one of my old favorite downtown Boston theaters, and the two pubs that our local college-town theater became. :angry:
(And an old forgotten hotel that became a three-floor 20-screen cineplex across from the Common.)

Let's see, the Exeter St. Theater, considered one of the historic "birthplaces" of Rocky Horror, became a chain bookstore, not sure what happened after that...
The Sack Charles, where every single OG Star Wars premiered, is now office space for Mass. General Hospital...
The Paris, across from the Prudential building, where every Woody Allen movie showed, is now a restaurant and a CVS drugstore...

Downtown local theaters are easier to retrofit for urban use, while expired cineplexes just sit out on the highway like Ozymandias dinosaurs until demolished.
 
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Bryan^H

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I find it all kinds of bizarre that these places are being legally prohibited from doing business but are being made to pay all bills as if they were open. And I find it even more bizarre that the pandemic has required pants tightening and sacrifice from everyone in all walks of life, except for the landlords who must be made whole no matter what. And it’s even more baffling that landlords are generally being inflexible about rent payments for all industries, forcing otherwise healthy businesses to shutter. It seems very short sighted. Any establishment that’s closed or doing reduced business due to the pandemic is not going to be replaceable during the pandemic and probably for a great deal of time afterwards. When a landlord kicks out a theater or a restaurant for non-payment of rent during this crisis, it’s not as if someone else can just open up a new business in that space and begin paying rent immediately. The place will just be vacant and the landlord won’t get any rent anyway. Throw out enough businesses and when the pandemic ends, there will be far more available real estate than there is demand for it, which will depress prices further and result in even less rent in the future. And it’s not like you can put an entirely different business in a space custom built for a theater, so that just means demolishing or retrofitting the building and starting over.

It makes no sense and is tremendously shortsighted. A theater or restaurant that reopens successfully next year and has a preexisting lease at pre-pandemic rates will still be worth more to a landlord that having the building vacant until next year, then having to renovate the space and then having to find a new tenant at what will almost certainly be lower market rates.
Exactly. There was a GoFundMe page created for the local theaters near me that closed. One raised close to $12K to remain open, but too much time has past, and they could no longer sustain the lease/and other costs. So they closed.

This is why I'm angry, it shouldn't have come to that, and small business owners should have been spared the wrath of 2020.
 

Josh Steinberg

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It just doesn’t make sense to me.

From a cold strictly business perspective, there’s no way to get a new tenant in who will provide the same amount of income any faster than the one just kicked out would have. The old tenant had a successful business which presumably would have returned to normal when this ended, and that would have gotten you revenue faster than waiting for a new business to establish itself, assuming it ever does. Rather than taking a percentage of what landlords and vendors and utilities would normally be paid, they’re instead keeping their usual 100% - but it’s 100% of nothing.

From a more human “try not to be a jerk”/Pollyanna perspective, there’s no better tenant to get right now anyway, so why not settle for part of the usual payment instead of nothing. You get credit for helping the community survive, and you never know when that kind of goodwill can come in handy. It allows the potential of jobs and livelihoods to return, which can be the difference between a thriving community and one that collapses. (And cynically, if the community collapses, that trickles upwards eventually too.)

If any of your local theaters are near restaurants or other recreational businesses, there’s a good chance they share the same landlord and other vendors. If the theater goes, the restaurant next door that depended on the boost from the crowds goes next, and then the landlord is out that guy’s rent too.

It’s all flabbergastingly short sighted to be making these drastic, permanent decisions over a very real but temporary crisis.
 
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TravisR

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It just doesn’t make sense to me.

From a cold strictly business perspective, there’s no way to get a new tenant in who will provide the same amount of income any faster than the one just kicked out would have.
Especially in terms of movie theaters, those buildings are basically good for nothing other than playing movies. Someone could buy the property, raze the theater and put up a new building suited to their business but how many companies are investing that kind of money right now?
 

Worth

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Interesting article...
If things were already looking bleak for American cinemas, the immediate future now looks catastrophic. This past weekend, the total domestic box office was less than $15 million—Indiewire estimates that sum amounts to $5,000 per theater, which isn’t enough to pay for basic operating costs. As studios grow more skittish about releasing major films, those numbers will only dwindle. Tenet was supposed to be the industry’s lifeline; for now, Hollywood has nothing else to pin its hopes on.
 

TravisR

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Interesting article...
Speaking from a business perspective, I think this is worse for theaters than if there was an outbreak in a theater. If there were infections linked to a theater in, say. Philadelphia, people 3,000 miles away in Oregon will largely ignore it and keep going to theaters but Hollywood isn't going to ignore box office that is that small. Those numbers will keep them from releasing big movies and that's going to be disastrous for theaters.
 
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Malcolm R

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Those numbers will keep them from releasing big movies and that's going to be disastrous for theaters.
And for the studios eventually, as their short-sightedness will drastically reduce the number of screens available in the future. Even once the pandemic is over, big blockbuster weekend grosses will be a thing of the past when they are incapable of opening a film on more than 2,000 screens.

On the small upside, the theaters remaining in business should be able to negotiate a better percentage of the box office for their screens as studios will be fighting for space.
 

Worth

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And for the studios eventually, as their short-sightedness will drastically reduce the number of screens available in the future. Even once the pandemic is over, big blockbuster weekend grosses will be a thing of the past when they are incapable of opening a film on more than 2,000 screens...
I actually think that would be a good thing for the industry as a whole. I get that they want to make as much money as quickly as possible, but everything having to have a massive opening weekend has created an environment where only films that appeal to the lowest common denominator get released. It pretty much killed off anything that might appeal to adults, as they're less likely to rush out to see something on opening weekend.
 

Malcolm R

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I actually think that would be a good thing for the industry as a whole. I get that they want to make as much money as quickly as possible, but everything having to have a massive opening weekend has created an environment where only films that appeal to the lowest common denominator get released. It pretty much killed off anything that might appeal to adults, as they're less likely to rush out to see something on opening weekend.
I'm not sure that will really help, as a larger percentage of the screens remaining will likely be dedicated to the bigger popcorn films. There will no longer be the excess capacity for a cineplex to keep 2-3 screens showing mid- or low-budget offerings.
 
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Josh Steinberg

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I actually think that would be a good thing for the industry as a whole. I get that they want to make as much money as quickly as possible, but everything having to have a massive opening weekend has created an environment where only films that appeal to the lowest common denominator get released. It pretty much killed off anything that might appeal to adults, as they're less likely to rush out to see something on opening weekend.
I’m not sure that I agree. I think what killed off adult-only mid-budget fare at the box office was the evolution of prestige content for home viewing, first on premium cable and then more so with subscription streaming. The average viewer is getting everything they got in the theater and more, because now those characters and stories they like can go on beyond a two hour limit. If you look at what’s popular in prestige television, the people in it and the people working behind the scenes on it, and the source material (when not original), it’s all stuff that ten years ago would have been theatrical movies. And it’s capturing that place in the zeitgeist that movies used to; water cooler talk at the office is now about the latest streaming hit.

Ever since that turn of the century period when DVDs first went mainstream to the rise of HDTV and then streaming has been about offering the consumer the quality of theatrical productions with the convenience of home. How could years and years of sustained marketing and an explosion of content not have an effect on consumer preferences and behavior?

The potentially insurmountable problem facing movie theaters is that their content is no longer exclusive and hasn’t been for quite some time, but now the gap between theatrical quality and home convenience has been all but bridged. I think it’s a really difficult sales pitch to make to people who aren’t theater enthusiasts: inconvenience yourself and pay more now instead of waiting a short period to see it conveniently at home virtually for free. People who love going to the movies for the sake of going to the movies will still want to go to the movies. But all of those people who went because it was the only way to see something no longer have to go, and it seems that by and large, they’re not.

I don’t think any of this was completely insurmountable. More people watch live sports on television than in person, but we still have stadiums you can see a game at. More people stream a song than buy a ticket to see the artist perform it, but we still have concerts. But the industry needed to have spent at least the last decade working on changing with the times, and they haven’t. I’ll posit that theaters have been largely indifferent to audiences in a way that would never fly with any other hospitality industry. I’m not sure there’s a lot of goodwill among the average theatergoers for movie theaters in the way there has been for local restaurants and other businesses. And I think that trend, which predates the pandemic, is the fault of the theater industry and they’re studio partners.

I’m not sure we’ll ever know how much of the decline is the result of theaters making choices that put cutting corners while extracting every last dollar out of strapped consumers over providing a consistently high quality and innovative experience, and how much of it is due to an explosion of high quality content available more conveniently than ever before. But those two things in combination have been deadly to the old business model.
 

TravisR

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Disney is apparently thinking about moving Black Widow. And by "thinking about", I'm sure they mean "will officially announce the date change in a day or two".

Also, there's a RUMOR that Soul will go to Disney +.

 

Josh Steinberg

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I hope they eventually move Black Widow to D+. Endgame was the end of my journey as a diehard MCU follower, but given the lack of new entertainment on par with that kind of spectacle, I’d gladly pay theater prices to see it at home.

I also don’t think it’s financially viable or artistically beneficial to have years of MCU product bottlenecked behind the two movies that were meant to be out this year.
 
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Jake Lipson

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Dangit, @TravisR ! I posted the same thing from Variety in the individual threads for Black Widow and Soul, and you beat me to it by just posting it in here instead. :laugh:

That article is saying that Disney could push Black Widow to February, where The Eternals currently is. That makes sense, because that is what they did last time.

The problem is Dr. Fauci's recent statements that it might be mid-to-late 2021 before it is safe to go to theaters again. I would very much like him to be wrong, but he has been a straight shooter and seems to know his stuff. So if he is right, moving Black Widow to February won't make that much difference. I really want to see Black Widow, and I'd like it to be in a theater. But if it comes out as a theatrical release prior to the wide distribution of a vaccine, I'm staying home. Based on the results we've seen for Tenet, I don't think I'm alone in that sentiment.

If Disney's intention is to move it until it would make the same amount of money as it normally would, they would have to delay it to November 2021 at the earliest. That would move the entire slate back multiple years, which doesn't make much sense from a financial point of view. Also, because these stories are connected and intended to be seen in a certain order, further delays might complicate their future storytelling plans.

I am really glad that Endgame was on last year's slate, though. With respect to Black Widow, it would have been a whole lot worse on pretty much every level if Marvel had been building up to that for over a decade and it wasn't able to have its theatrical release.
 
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Josh Steinberg

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I don’t think Fauci is wrong. That timeframe is what most of the top epidemiologists has been saying since the beginning as a realistic best case scenario, and that’s assuming that everything goes perfectly both with individual precautions (masks, distancing, etc) and medical interventions (vaccines and therapeutics), which hasn’t been the case to date.

I think a lot of people, well intentioned as it may have been, have been cheerleading this as a “2020” issue to try to keep morale from sinking too far, but this doesn’t go away in January. If anything, it could very well be worse then. It’ll be flu season, it’ll be very cold in much of the country, we’re sending kids back to school even though the science doesn’t support it, and we’re opening restaurants and other indoor recreational and social gathering spots against medical advice, and we don’t have a handle on testing. As a society, we did very little of what we were supposed to do with the time the shutdown bought us, and there’s no political or social will to mandate another one, even if conditions are worse than they were when the original shutdown went into effect.

I am mentally preparing myself for 2021 being a lost year as well. If it’s not, then I’ll have something to celebrate. And if it is lost, at least I won’t have been taken by surprise.

And if that is what comes to pass, I think the reality that people aren’t going out en masse to theaters will force the hands of studios in reevaluating their plans.
 
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