Listen to JazzPHX
News of the day, behind the scenes and more!
What The Pandemic Means For The Future Of Movie Theaters
Download mp3 (8.14 MB)
Sky Schaudt/KJZZ
An empty movie theater in Phoenix in October 2020.
LAUREN GILGER: Movie theaters might be among the hardest hit businesses by the pandemic — 96% of movie theaters have reported over 70% in losses in 2020. That's according to the National Association of Theater Owners, and now the group is calling on Congress for aid. But even with federal help, are people just becoming more accustomed to watching movies at home, a trend that was taking off even before the pandemic? A May survey published by Variety shows 70% of people said they would be more likely to watch a new release from their couch than in the theater. But our next guest disagrees. Patrick Korkoran is the vice president and chief communications officer with the National Association of Theater Owners. And we began with how movie theaters were doing before the pandemic hit. Had streaming and Netflix culture already created challenges for the traditional cinema?
PATRICK KORKORAN: I would say just the opposite, frankly. You know, for the last 11 years, movie theaters have grossed over $10 billion a year. For the last five, they've grossed over $11 billion a year. And if you look at the kinds of movies that people go to see, you know, the big blockbusters, $100 million movies are doing better now than they did 15 years ago. There are more of them. They sell more tickets. There's a higher attendance for movies in that category. Where we have an issue is in the kind of movies that are coming to movie theaters. And some of that is tied into the home market where DVD sales and rentals used to sort of cover a multitude of sins. So if a movie that was, you know, kind of star-driven or a comedy or a drama — that wasn't a big blockbuster, didn't do as well as it could have in theaters, it could still make up that money in the home. But the DVD market, the transactional video market for sales or rentals, has declined. It declined about 30% before streaming and another 30% since streaming. So streaming has really affected the home, but not, not movie theaters.
GILGER: So what do you make of the argument and studies that show that ticket sales have been sort of declining since the '90s? But, but the box office continues to bring in more money, as you say, because of things like raising prices. Can theaters keep that going? Is that sustainable? Can they survive by raising ticket and concession prices, etc.?
KORKORAN: Well, we need more movies. I mean, that's, that's the key. You know, admissions rose until the early 2000s, and then it sort of dropped off a little bit. And it's almost entirely based on the amount of, of those mid-range movies, you know, the comedies and the and the dramas that I was talking about. So there hasn't been a constant decline. There's been ups and downs based on the movies that are in the marketplace, but it's all at a fairly stable level between one, one and a quarter billion tickets a year to 1.4 billion — it goes up and down.
GILGER: So regardless, then, either way, the pandemic has really changed things for movie theaters. This is arguably one of the most hard-hit industries in the country, in the world because of this pandemic, for obvious reasons. How much have things changed since last March?
KORKORAN: Well, we've been largely shut down since last March. We were almost completely shut down for two, three months. And then theaters started to reopen across the country in different markets. But they're opened at lowered capacity, anywhere from 10 to 50%. And more than half of the screens are not open right now. So, you know, in terms of revenue and the fact that we aren't getting a lot of big movies, which we depend on — you know, if a restaurant is open in one state but closed in another, they can still get a food supply and people know it can go into that restaurant. But a theater in Missouri depends on the same product that a theater in New York gets. So you could be open in Missouri but closed in New York and you're not getting the movies that you need to sustain the audience. So we're, we're, we're down about $8 billion on the year compared to 2019.
GILGER: So let's talk more about that. The National Association of Theater Owners has launched the campaign, Save Your Cinema, and, you know, is one of many industries that are now turning to Congress asking for help. How are you arguing your case?
KORKORAN: Well, our point is that, you know, theaters have been very responsible in abiding by health regulations, shutting down when required, operating at the lower capacity when required. And, you know, they're being affected through no fault of their own, just like a lot of other businesses, like restaurants, like bars. In particular, places where people gather have been really badly affected, and they're important gathering places for the community. So once we get through this pandemic, we need to have those healthy businesses back in place because they're a key part of local economies all across the country.
GILGER: Yeah, yeah. Finally, Patrick, let me ask you about what this could look like in the long term. Like, do you anticipate movie theaters having to shift, having to pivot the way lots of businesses have in the country because of the pandemic? And do you anticipate those shifts lasting?
KORKORAN: It's, it's difficult to say. I think we will see some companies not make it. We'll see others that downsize. But the basic business of providing a place for lots of people to gather to enjoy movies is not going to change. I think that that's just the staple of what it is we do. And people have a need for it, right? I think, you know, anybody who's been stuck in their house for the last nine months can tell you they want to get out, they want to do things. And it's a problem right now in some cases because people are not being responsible. But once we're back to normal, I think people's habits will go back to normal as well. They want to go out to restaurants. They want to go out to movie theaters.
GILGER: All right. That is Patrick Korkoran, vice president and chief communications officer with the National Association of Theater Owners. Patrick, thank you so much for taking the time to come on The Show.
KORKORAN: My pleasure.
