Home About Archives RSS Feed

The Retired Investor: The Movies Return

By Bill SchmickiBerkshires columnist
The Memorial Day weekend launched the unofficial beginning of the summer season. Movie theater owners are holding their breath in hopes that consumers, once vaccinated, may start to return to the cinema. Is it a false hope?
 
Much has been written about the demise of the movie theater, even before the world was ravaged by the novel coronavirus pandemic. Sky-high prices for tickets and the exorbitant costs of concessionary items like $8 bottles of water, and $15 baskets of popcorn had made the movie-going experience almost as costly as a rock concert.
 
At the same time, consumers were being offered the choice of sitting at home, while watching a steady and increasing stream of big-name stars and high-quality films for a $15 monthly fee. This growing competition from streaming companies like Netflix, HBO, and Amazon Prime, and the climbing cost of the movie experience, left the future of movie theaters questionable at best.
 
And then along came the pandemic. Box office revenues plunged 80 percent or more last year as all 5,477 of U.S. cinemas were closed in order to slow the spread of COVID-19. That left the Hollywood studios with little distribution and only one major product outlet -- streaming.
 
 In an additional blow to a struggling business, the largest theater chain, AMC theaters, agreed to collapse its theatrical "window" of exclusive access to new movies from three months to 17 days. Streamers such as Disney Plus and HBO Max also began offering simultaneous openings on both their streaming channels and in movie theaters for additional fees or as part of their promotional services. Major film producers like Sony, that lacked big, affiliated streaming companies, sold their movies to organizations such as Apple TV+ and Amazon.
 
Fast forward to today, in what movie theater companies hope may be the beginning of a post-pandemic return to the cinema. Memorial Day box office returns, usually a preview of the summer season, were somewhat encouraging. "A Quiet Place Part II" made $57 million over the three-day weekend. "Cruella," which opened simultaneously on Disney Plus and in the theaters, generated $26.5 million, which was solid and above expectations.
 
While more theaters are open than not, we are still in the early days. Thus far, total box office gross this year amounts to about $650 million with around 71 million tickets sold at an average price of $9.16 per ticket, according to The Numbers, a data-gathering organization on movie theaters.
 
The question is whether the pandemic has accelerated the disruption caused by home streaming, or will the pent-up demand and excitement to go out, give the theaters a reprieve and reinvigorate attendance?
 
Roughly half of adults surveyed by Morning Consult, a research intelligence group, said they felt comfortable at the movies, and nearly 4 in 10 adults said they would feel comfortable returning to the movies in the next month. Generation Z respondents (as well as Millennials) felt the most comfortable in a movie theater, while Baby Boomers lagged with under 50 percent expressing comfort in the idea.
 
It has become accepted wisdom that going to the movies is passé. For many, it's a place your parents went to make out when they were teenagers. Many argue why go out when you can stream at home, or on the go? When you can get a month's worth of good flicks for the price of one movie ticket? They have a point.
 
Maybe the streaming companies are right and moviegoers will dwindle down to a couple of chuckleheads like me willing to pay for that buttered popcorn, or that over-priced box of Raisinets. But I suspect there is still an audience out there, and maybe more of one than anyone imagines. I still feel that thrill in my chest when the lights go down, the curtains rise, and for an hour or two I am whisked away to a different world. How about you?
 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
0 Comments
     

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Berkshire Health Systems Urges Residents to Get Vaccinated
NA Housing Authority Closes Balconies, Sets Structural Survey
Longtime Wahconah Coach John Kovacs Hangs Up His Whistle
Williams' Kirshe, American Ruggers Come Back for Win
Dog Perishes in Pittsfield Structure Fire
Williams Alum, U.S. Rugby 7s Compete Thursday Night on USA Network
BRTA Seeks Input For Proposed Bus Stops
Pittsfield Babe Ruth 13s Fall One Short of World Series
Carr Hardware Window Wraps Deemed 'Art' Not Signage
NRM Announces Winners of Juried Outdoor Sculpture Show
 
 


Categories:
@theMarket (375)
Independent Investor (451)
Retired Investor (52)
Archives:
July 2021 (7)
July 2020 (2)
June 2021 (6)
May 2021 (6)
April 2021 (9)
March 2021 (8)
February 2021 (8)
January 2021 (5)
December 2020 (6)
November 2020 (8)
October 2020 (7)
September 2020 (6)
August 2020 (6)
Tags:
Japan Energy Bailout Housing Europe Stock Market Stimulus Deficit Commodities Selloff Debt Rally Crisis Economy Europe Greece Retirement Markets Metals Wall Street Debt Ceiling Election Pullback Stocks Euro Federal Reserve Fiscal Cliff Jobs Recession Banks Taxes Congress Interest Rates Currency Oil
Popular Entries:
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: How Will Wall Street II Play on Main Street?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: Will the Municipal Bond Massacre Continue?
Recent Entries:
The Retired Investor: Olympic Price Tag Breaks Records
@theMarket: Wild Week for Stocks
The Retired Investor: What's That Smell?
@theMarket: Week of Surprises Keeps Investors Hopping
The Retired Investor: China's Red Hand of Regulation
@theMarket: Markets Grind Ever Higher
The Retired Investor: Will SALT Be Repealed?
The Retired Investor: Beware the Delta Variant
The Retired Investor: Chlorine, Cars and the Supply Chain Challenge
@theMarket: Inflation Is Running 'Hot'