Disney Deals Another Blow to Troubled Theater Industry

By Mariliana Fotopoulou Tuesday, October 6, 2020

On October 5, Warner Bros. announced postponements of some of its major films, including “Dune” and “The Batman.” In response, around 700 movie theatres will shut down in the United States and the UK ahead of this weekend, sending theater stocks plummeting.

Disney Announces New Postponement

After announcing the postponement of “Dune,” Warner Bros. has also moved its new “Matrix” movie to December 2021 and “The Batman” to 2022, while “Black Adam” still has no official release date.

This isn’t the first time “The Batman” has struggled with delays, as its production was already shut down once after lead actor Robert Pattinson tested positive for coronavirus a month ago. The film had been postponed for months because of the outbreak and had only resumed shooting when it was forced to pause for two weeks because of Pattinson.

The movie restarted production in the UK and is expected to finish shooting by the end of the year. A closure of Cineworld theaters sent theater stocks plummeting yesterday, with AMC plunging over 11%, Cinemark declining more than 17%, and Marcus Theaters stock dropping more than 6%.

There’s a high possibility that other studios will follow suit by postponing their films, and that more cinema companies will close their theaters.

“If theaters are closed, the studios have a reason to delay,” Michael Pachter, an analyst at Wedbush said. “Keep in mind that the slowdown/stoppage of production from March – July impacted the 2021 slate, so these delays are back-filling holes created by a production stoppage.”

Meanwhile, Odeon, a cinema chain owned by AMC, said it will be altering its operations and open a quarter of its theaters only for the weekends. The cinema chain announced it would shut down 30 theaters from Monday to Thursday "for the time being" due to coronavirus.

Odeon notified loyalty customers about the changes and said that it would be provisionally reducing opening hours at some theaters "in light of the ongoing delays to the release of many new films."

The UK Prime Minister Boris Johnson has encouraged people to go to theaters and help them stay open. Johnson said he would "encourage people to go out to the cinema, enjoy themselves and support" movie theaters.

Cineworld Leaves 45,000 Jobless

British theater chain Cineworld announced earlier Monday it would close all of its theaters across the US and the UK because of weak box office results and delays of films such as “Black Widow,” “Wonder Woman 1984,” and “No Time to Die.”

This means that over 7,000 movie screens will shut down for the time being, an incredible loss that resulted in changes in Warner Bros.’s distribution strategy. A total of 663 theaters will shut down their operations from Thursday and no official reopening date has been announced.

Mooky Greidinger, CEO of Cineworld said his company "cannot underscore enough how difficult this decision was" and that it was "not a decision we made lightly.” The move has put 45,000 jobs at risk, 5,500 of which are in Britain. Cineworld is the second-largest theater chain in the world.

After the easing of lockdown measures due to coronavirus, theaters were able to reopen in Britain from July 4 and Cineworld did it on July 31.

"We did everything in our power to support safe and sustainable reopenings in all of our markets," said Mr Greidinger.

One of the factors that led to closures could be the lack of big title releases in theaters since August. After the postponement of the new James Bond film until April 2021, theaters ran out of major titles to lure the fans.

"Cineworld will continue to monitor the situation closely and will communicate any future plans to resume operations in these markets at the appropriate time, when key markets have more concrete guidance on their reopening status and, in turn, studios are able to bring their pipeline of major releases back to the big screen," said Mr Greidinger.

Summary

The film industry is facing collapse after companies announced closures of about 700 theaters in the United States and the UK due to weak box office results and postponements of major titles like “The Batman,” “No Time to Die,” “Dune,” and more.

About the Author


Headshot for author Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

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