Movie theaters are currently on track to reopen before the end of the month in the U.S. following a months-long closure. But not so fast. Industry analyst Doug Creutz of financial services company Cowen now believes that theaters will remain closed domestically until mid-2021. Should this prove true, it would serve as a detrimental blow to the movie business on all sides.
Doug Creutz recently wrote an update on his expectations for Disney in 2020. Creutz downgraded his rating on the company's stock and cut financial estimates. One of the most concerning parts of his report, which concerns the entire industry, proposes that movie theaters will have to remain closed for the duration of the year as the situation has worsened in recent weeks. It's argued that studios are likely unwilling to risk millions by releasing blockbusters at this time. Creutz said the following.
"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."
AMC, Regal and Cinemark have all outlined plans to reopen their doors by the end of the month. At first, this will involve showing older movies to drum up business. But they are timing out the reopening around the first batch of big titles coming down the pipeline. Namely, Christopher Nolan's Tenet and Disney's live-action Mulan remake. Both blockbusters with massive budgets, they have been delayed several times, as the situation has proved to be unpredictable and they need to draw huge crowds in order to be successful.
The problem is that studios can't risk releasing these movies until they have a relative guarantee on return. With reduct capacity in auditoriums once theaters do reopen, and uncertainty surrounding how many people will show up at the box office, the risk is too great. Further, Dough Creutz explained that the measures taken have not been effective enough and, should things worsen, the timeline could stretch later into next year.
"We had previously assumed that the spread... 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."
Things will get more complicated as movie markets begin to stabilize internationally. It was recently revealed that theaters in China, the second-largest moviegoing nation in the world, will begin opening next week. Studios could opt to release blockbusters overseas first, with releases set later in the U.S. once that becomes possible. But that presents even more challenges.
Another concern is whether or not theater chains can last that long. AMC is carrying billions in debt and has been teetering on the edge of bankruptcy for months. It seems unlikely that the company would be able to make it that long without resuming operations. As the largest theater chain in the country, that would be a huge loss. This news comes to us via The Hollywood Reporter.