COVID-19 Impact: Movie Theaters COVID-19’s Impact on Movie Theaters and How Brands Can Best Prepare for Reopening When the CDC and state governments began limiting the number of people at social gatherings and establishments in early March due to coronavirus (COVID-19), many movie theaters had no choice but to close their doors. By mid-March, all major movie theater operators had closed, which left more than 160,000 employees without work. AMC Theatres, the largest theater operator in the U.S., is looking at a long-term debt of $4.85 billion as a result of COVID-19. “Literally we don’t have a penny of revenue coming in the door,” said AMC Chief Executive Adam Aron in a CNN interview. “Three weeks ago, AMC was an immensely healthy company. But now with expenses out the door and no revenues, we are burning through cash. What we need is liquidity, and only the government is going to provide that.” Hollywood studios have also delayed most of their releases, with some as late as next year, to avoid a major pileup once things go back to normal. Blockbusters like Mulan, A Quiet Place Part II, Fast 9 and the upcoming James Bond film No Time to Die, were set to release in March but have all been pushed back. To make matters worse for movie theaters, some studios have opted to release films on demand in the meantime. For instance, Universal Pictures released Trolls World Tour on demand for $19.99 during COVID-19 lockdowns. The studio bragged that the movie set an all-time digital record but declined to release figures, leaving it unclear how profitable a digital-only release can truly be for a major motion picture.
While large theaters have completely shut down, smaller theaters are finding ways to provide income to some of their employees through selling gift cards and curbside popcorn. Additionally, some drive-in theaters are renting their space to churches for Sunday services. But there is still no set date on when all theaters will be back up and running. Cinemark recently reported a possible July 1, 2020 reopening, but some operations like AMC could face bankruptcy before then. Still, other theater owners remain hopeful. “People are going to be so sick of staying home that, once people feel safe, we’re going to be slammed,” said Mark O’Meara, theater owner in Fairfax, Virginia. “I’ve got people saying, ‘I’m sick of Netflix,’ already.”
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Where to Focus Today for the Greatest Impact Later Movie theaters will have to play the waiting game until government officials deem all U.S. cities safe again. While they wait, we’re sharing four areas movie theater marketers can focus on so that when it is time to reopen, theaters can reenter the industry with a lean and effective marketing strategy: •
Messaging That Matters: Key players in the industry are planning internally to ensure that when the time comes to reopen, guests are confident that the proper health-related precautions have been put in place to make them feel safe. Build a go-to-market strategy that will showcase the careful planning that has been done behind the scenes to ensure the wellness and safety of guests. Messaging through an emotional connection should supersede performance because as things begin to return to normal, people will remember the sense of comfort your brand made them feel during the crisis.
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Mobile In-App Experiences: In a new era of social distancing, brands have technology on their side. There is no better time to enhance your mobile in-app experience so your customers can make ticket and concession purchases, reserve their seats, and get updates on showtimes directly from their phone. The more contactless functions you can provide, the more at ease customers will feel about visiting your location.
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Data Readiness: Right now is the ideal time to be focused on your first-party data. Those relationships are the most important source of knowledge and insight a brand can garner. If silos exist, break them down and consolidate your first-party data so that it is insightful, actionable and measurable. Modeling audiences and gaining insight into the highest lifetime value customers will give you a solid reentry strategy when theaters are back up and running.
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Engagement Strategy: People are going to want entertainment options outside the home and most sporting events will still not be allowing spectators, so movie theaters will be a great first option when shelter-in-place orders are lifted. Movie theaters have both convenience and cost on their side as many people will be looking for cheaper entertainment options in the wake of COVID-19. Use this reentry time to understand the traffic flow back into your theaters and compare that to past seasonality trends to see where you can make adjustments for the rest of 2020 and offset COVID-19 losses.
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