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Coronavirus May Mark the End of Local Movie Theaters

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    The coronavirus is taking a toll on many local businesses, though there's one that I'm curious about here. Movie theaters. The theater industry hasn't exactly been booming for quite some time due to the growing popularity of streaming services such as Disney+, Netflix, Hulu and many more. Now days if you're watching TV and see a movie trailer you like, there's a chance it will be released directly to Netflix. A few years back that would have been unheard of.

    The first movie I can recall that did a release directly to a streaming platform (that did exceptionally well) was 'The Interview' released on YouTube. The circumstances of that release was surrounded by a bit of controversy regarding North Korea and it's "threats" upon releasing it, though I'm not certain if those threats were just promotional tools circulated by the movie staff or real issues. Either way, that route proved a success. I thought that would change the way movies were released, and it did, but only in a hypothetical way. Movie production companies just didn't take to it the way anyone thought they would.

    Fast forward a few more years to today and we have streaming services actually producing huge budget films and releasing them on their own platforms, and people are loving it. This has put a huge damper on movie theater sales. As I said above, movie theater sales have been in a slump for a few years now due to their high ticket prices and ridiculously over-inflated concessions, though they've just been handed something they couldn't have been prepared for, coronavirus.

    No matter how much I enjoy a good movie at a theater, a trip to the movies is one of the most unnecessary things I can think of in a pandemic such as this. As of a few days ago, the theater industry (atleast in the U.S.) is almost completely halted. NBCUniversal has already stated they are changing their focus to an on-demand platform. Many, many more will follow suit.

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    Yeah. That's one of the industries I have heard that will have one of the hardest times surviving a prolonged national shutdown from social distancing because of coronavirus. Theaters big and small are super expensive to operate and don't have much of a financial runway, at all.

    Not having any customers for even a few weeks can make a small theater go completely out of business, from what I have heard. And even the larger theater chains like AMC, Alamo, Studio Movie Grill, Moviehouse & Eatery, etc will be really hurt or just won't survive if they have to close shop for 3+ months.

    Makes me think that the real estate companies that rent buildings and spaces to retail shops and I guess theaters too would be smart to let rent slide during this time. Its way easier and I think makes more financial sense in the long run to not get paid rent for a few months as opposed to evicting businesses that otherwise were doing well but had to close shop because of corona. Then they will be left with vacant buildings/lots for several months or longer and lose even more money as we will then be in a recession.

    So hoping that there is a coordinated effort from top to bottom to see as few companies go out of business as possible, if its just because they lose revenue from this pandemic and can't float operating costs for 3-5 months.

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    NeoLogic Wrote:

    Yeah. That's one of the industries I have heard that will have one of the hardest times surviving a prolonged national shutdown from social distancing because of coronavirus. Theaters big and small are super expensive to operate and don't have much of a financial runway, at all.

    Not having any customers for even a few weeks can make a small theater go completely out of business, from what I have heard. And even the larger theater chains like AMC, Alamo, Studio Movie Grill, Moviehouse & Eatery, etc will be really hurt or just won't survive if they have to close shop for 3+ months.

    Makes me think that the real estate companies that rent buildings and spaces to retail shops and I guess theaters too would be smart to let rent slide during this time. Its way easier and I think makes more financial sense in the long run to not get paid rent for a few months as opposed to evicting businesses that otherwise were doing well but had to close shop because of corona. Then they will be left with vacant buildings/lots for several months or longer and lose even more money as we will then be in a recession.

    So hoping that there is a coordinated effort from top to bottom to see as few companies go out of business as possible, if its just because they lose revenue from this pandemic and can't float operating costs for 3-5 months.

    I know that they've suspended all mortgage and evictions for the time being, I think 2 months or so, but I don't know if that applies to commercial businesses. I definitely hope so. But of course this is only for those who need it. These business definitely need it. I just don't know if they'll be able to overcome that in the long run, considering streaming services are overtaking their market. I think gyms, salons, restaurants, etc will be fine once things get back to normal. They are just under different circumstances. Theaters have been on a downturn for quite some time.

    I think that after this we will be left with only the big chains like AMC and Regal, unfortunately.