The Uncertain Future of Movie Theatres

By: Zack Van Pelt

What is the one movie of your childhood that you remember being wildly excited to see in theaters? Most young Americans have one. For me, it was Harry Potter and the Deathly Hallows: Part 2. At the time, I had only just turned eight years old and had recently become a huge fan of the series through J.K. Rowling’s magical books. It was the first and only Harry Potter movie that I was able to see at a movie theater, and it made a wonderful birthday present for me. This was an important moment that I still remember fondly, but will this type of experience soon become a relic of the past?

It’s no secret that the COVID-19 pandemic has closed most businesses and many people know that in-person entertainment has been hit harder than most. On April 12, reported that AMC Theaters, the largest movie theater chain in the United States, was consulting with the legal team of Wiel, Gotshal & Manges about the possibility of AMC filing for bankruptcy. All AMC theatres were closed down on March 17, and since then the uncertainty of their future has only grown with their lack of cash flow. AMC is already $4.9 billion in debt, with this no doubt worsening as several sources have reported that AMC is no longer paying rent to its landlords. While these are still early stages of restructuring and AMC Theaters may well survive the coming years, one can expect a large number of their nearly 11,000 international locations to close in the near future. 

While COVID-19 certainly threw gasoline on the fires in the movie theater industry, it was already on a clear course for disaster. This graph from shows the number of tickets sold annually by domestic theatres in blue and the annual box office revenue of those same domestic theatres in red. 

This shows that the number of movie tickets sold have been steadily decreasing since 2002, and the price of movie tickets has been on a hefty upward trend since 1995. 

Today, the average American movie ticket costs $10.14, so a family of four would be spending roughly $40.50 to go see one movie in theatres assuming none of them get food or drinks at the theater. This can be compared to a recent and absolutely groundbreaking movie release for an interesting result. 

Trolls World Tour had no theatrical release despite being an expected success, due to COVID-19. It instead came straight to streaming services and is currently the most pre-ordered movie of all time, and the best selling film over three days of digital release. It was also the number one rented movie on Amazon Prime Video for a short while, despite costing $19.99 to rent as opposed to most other Prime Video rental prices at $5.99. While we don’t know how much money it has made exactly, you would be hard pressed to call it anything other than a resounding success, and it has never been shown in theatres. 

If this success can be regularly repeated, it will be an absolute gold mine for production companies such as Dreamworks and MGM Studios as they could only stand to gain from cutting out the middleman of theatres. 

This would only worsen the precarious place that movie theatres are in. 2017 sold the least movie tickets across the U.S. since 1995, and hugely anticipated movies such as The Last Jedi, Guardians of the Galaxy, Spider-Man: Homecoming, and The Beauty and the Beast all came out that year. As ticket sales decrease, prices must increase and every year more and more people decide that they’ve had enough of the rising prices. 

There will, of course, always be purists who greatly value the experience provided by a movie theater, but according to recent trends, the general population is growing tired of them as more efficient options such as streaming services become popular. Movie theatres won’t die out altogether for a long time, but it’s clear that the way that they exist now is unsustainable and they will have to evolve, and soon, in order to stay relevant in the modern world.


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