Celebrating the failure of movie theatres
We don’t talk about the so-called meme stocks here.
As clickbait-y as they may be, the reality is that they aren’t healthy. They are attached to industries that are failing and where the market realities behind that failure isn’t going to improve simply because of this sudden interest by traders — interest that is based largely on nostalgia and emotion.
That will end eventually. And, the issues that got the companies into the mess that they were in will remain.
One of the highest profile of the meme stocks is AMC (NYSE: AMC), the movie theatre chain. As we wrote yesterday, the COVID-19 pandemic was a disruptor for a lot of industries and it will very likely permanently change how many people behave moving forward. The movie theatre and movie making business is chief among those.
Simply put, it seems very unlikely to me that the movie theatre industry will ever be the same as it was pre-pandemic again. The ritual of going to the movies has been exposed as the expensive pain in the rear end it was and the idea that huge multiplex theaters are going to be packed to the brim on an average Friday night seems unlikely moving forward.
Amazon’s purchase of MSG tells you that many movies — most movies, likely — are going to be released to streaming sites at the same time as they are given theatrical releases. That will mean that the movie industry will need to change.
Change is not a bad thing for either the industry or the public. It’s just change.
What will it look like?
I suspect it will mean that a lot of multiplex theatres will close, especially in smaller centres. Although some people will still want to go to the movies and some big, action-heavy movies will be made with the theatre experience in mind, there won’t be enough to sustain the amount of theatres that existed pre-pandemic.
There might actually be an opportunity for independent theatre owners here — movie theatres will become like record shops now. They will be a niche experience that appeals to a certain type of person, but not the mass market. The big studio releases will be restricted to theatres in big cities. Additionally, they will likely be theatres that allow for immersive experiences. It will be more like going to an amusement park — something you go to once a year, not every Friday night.
For movie lovers this is great news. There will probably be more movies as the competition for streaming dollars among Netflix (NASDAQ: NFLX), Amazon Prime (NASDAQ: AMZN), Disney + (NYSE: DIS) and others will be fierce. And even if you subscribe to all of them, it will still end up being cheaper than a single trip to the theatre was in the past.
Change can be scary and, in business, it rarely happens without some failures.
However, it also offers the chance for an industry to improve and evolve to be better for everyone.