There are many industries that are under enormous pressure due to the shutdown from the coronavirus.
Nowhere is that more evident than in the movie theater industry.
AMC is one of the most recognized American brands when it comes to the film industry. Like many iconic names, it is questionable how long they will be around.
The company is casting doubt on its ability to remain in business. While it has enough cash to reopen, it gets very questionable after that.
In this instance, there are a number of factors in place.
To start, the chain is at the mercy of local governments and when they lift restrictions. The reopening is happening on a local scale meaning that many theaters still must remain closed.
Ultimately, the company is existing without any revenues.
A second issue is the social distancing requirements when the shut down is lifted. Movie theaters, like restaurants, are going to have lower capacities since people are going to be spaced out. This will eat into revenues.
The final challenge is the movie studios themselves. They are not keen on releasing new films when people are not going to the movies. At the same time, technology is changing the way films can be distributed. AMC and Universal already squared off over the release of "Trolls" directly to streaming.
All this is going to put pressure on the movie theater industry. AMC was sitting on $718 million in cash at the end of April which should provide a bit of a buffer.
However, unless things change quickly, we could see another national brand entering bankruptcy.
Last month there were rumors Amazon was looking at purchasing AMC. The interest was never revealed nor was the level of interest.
One thing that, ironically, could be making a comeback is the drive in theater. This will remove the issue relating to social distancing.
In the end, a movie theater might end up being a novelty as opposed to the norm. With so many different ways to distribute content, including going direct, it only makes sense that the "middle man" gets cut out.
The movie theater might be going the way of the drive-in; something relegated to Americana history.
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