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“Nobody Is Here!” – Movie Theaters Reopen, Audiences Stay Away

Summary:
"If you build it, they will come." That moto was popularized by Kevin Costner's character in the 1989 movie Field of Dreams, but such advice today in a post-pandemic world is bullshit. Take, for, example, Christopher Nolan's movie Tenet, released on Sept. 3, was supposed to mark the revival of the movie theater industry, according to NYT.  Movie Tenet. h/t NYT, Jim Lo Scalzo/EPA, via Shutterstock Ahead of the opening, Robinhood traders in August piled into movie theater stocks, including Cineworld and AMC, in anticipation Americans would rush back to theaters.  But theater stocks dumped into corrections days after the movie was released, due to the fact the film collected .4 million in its first weekend in North America and just .5 million over its first two weeks. The

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"If you build it, they will come." That moto was popularized by Kevin Costner's character in the 1989 movie Field of Dreams, but such advice today in a post-pandemic world is bullshit.

Take, for, example, Christopher Nolan's movie Tenet, released on Sept. 3, was supposed to mark the revival of the movie theater industry, according to NYT

Movie Tenet. h/t NYT, Jim Lo Scalzo/EPA, via Shutterstock

Ahead of the opening, Robinhood traders in August piled into movie theater stocks, including Cineworld and AMC, in anticipation Americans would rush back to theaters. 

But theater stocks dumped into corrections days after the movie was released, due to the fact the film collected $9.4 million in its first weekend in North America and just $29.5 million over its first two weeks. The disappointing turnout has made one thing clear: 

"We have no way of forecasting how long it will take for consumer comfort with indoor movie theaters to return," Rich Greenfield, a founder of the Lightshed Partners media research firm, wrote in a note on Monday.

Even with theater capacity limited to 50% in most of the country, and 68% of theater chains reopened by Labor Day, the promotion of Tenet still did not entice Americans to return to indoor movie theaters as coronavirus cases continue to rage in late summer, heading into fall. 

We noted in May how a massive shift from indoor to outdoor movie theaters would be a hot trend for 2020. 

For some comparison, Jeff Goldstein, Warner Bros. president of distribution, said Nolan's past films - Inception, Interstellar, and Dunkirk - opened in the $50 million range in North America and collected between $527 million and $837 million worldwide. The latest movie sales for Tenet suggest the public is not convinced they should be returning to movie theaters anytime soon. 

Movie theaters have yet to persuade customers that indoor theaters are safe. Even before theaters started to reopen in late summer, there should've been an information campaign to educate the public about the millions of dollars theater operators spent to upgrade facilities to mitigate the virus spread. 

Mark Zoradi, Cinemark's chief executive, doesn't expect a "sense of normality" for theaters until 2022, calling 2021 a "transition year." 

"We've spent millions and millions of dollars getting this stuff right," Zoradi said. "If we can convince the consumer that we have done all of these things, they are much more likely to want to come back.

And if readers haven't figured out, movie theaters will be dead for the next couple of years. Alastair Williamson, who was at a Regal movie theater in the Baltimore metro area on Saturday (Sept. 12), tweeted: "Nobody is here!" 

In another tweet, Williamson shows the ticket counter, which by the way, appears to be automated, say goodbye to a few low-wage, low-paying jobs permanently displaced by automation, shows absolutely no one is at the cinema on a primetime Saturday evening. 

The moral of the movie theater story is if theaters reopen with top-notch movies by big-time producers, well, the American public is still not interested because they believe facilities are not safe from the virus. To bring consumers back, a lot of convincing by theater operators will be needed. 

Tyler Durden
Tyler Durden (a pseudonym) represents the idea that a return to truly efficient markets is a possibility and a necessity. After having experienced the inner workings of capitalism at various asset managers and advisors, Tyler believes that the current model is flawed and a deleveraging at every level of modern society is needed to reinspire the fundamental entrepreneurial spirit.

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