The exhibition industry continues to face dire circumstances as 2020 marches on. Movie theaters have been hinging their hopes on new movies arriving to entice audiences. Specifically, Christopher Nolan's Tenet, which has long been in position to become the first blockbuster to release once theaters reopen. However, a leading industry analyst now predicts that it is unlikely the movie will arrive in August. What's more, it is now expected that the domestic box office is going to plunge even further than previously thought for the year.

Eric Handler, a leading exhibition industry analyst with MKM Partners, recently penned a new note updating his outlook for the industry in 2020. Tenet, which is currently set to hit theaters on August 12 following several delays, has a "low-likelihood" of arriving next month. Additionally, Handler said it would be shocking if theaters can open nationwide before September "at the earliest." This comes as the situation in states such as Arizona, Florida, California and Texas has worsened in recent weeks.

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Other major releases such as Disney's Mulan remake that have been eyeing a release once theaters reopen have had to delay repeatedly as well. The problem is that theaters need new product to draw in enough customers to be viable, but studios can't release an expensive blockbuster without fully operational theaters. And it seems no studio wants to be the first one through the door to take that gamble. Christopher Nolan, meanwhile, is said to be adamant about releasing Tenet as soon as possible.

It had previously been expected that the 2020 box office would nosedive, dropping between 55 and 60 percent when compared to 2019's record-breaking levels. Now, Eric Handler is predicting a decline of 70 percent or more, which is truly brutal for the industry as a whole. Handler wrote the following.

"Focus should return to liquidity until there is a broad re-opening. The near-term outlook for exhibition related stocks remains extremely clouded given the uncertainty about when theatres will be able to re-open with new Hollywood content."

Handler is recommending a "buy" rating for Cinemark and IMAX stocks, but remains neutral on others such as AMC. The silver lining is that Handler expects there will be massive demand in 2021 as people will be eager to get out of the house once it is safe to do so. That should make for a significant boost in revenue next year.

"Beyond this year, we do believe there is pent up demand for consumers to get out of their houses for entertainment although the ramp up in attendance will likely be gradual."

The possible issue may be, how long can theaters in the U.S. hold out? AMC has been teetering on the verge of bankruptcy for months as the closure, which kicked off in mid-March, has put a serious financial strain on the industry. What theaters are open across the country have largely been showing older hits to drum up business, but that won't be enough to keep the lights on in the long run. This news was previously reported by Deadline.

Ryan Scott at Movieweb
Ryan Scott