The head of a Southwestern-U.S. theater chain that has closed all its locations and reduced its employee headcount to five from 1,250 due to COVID-19 told CNBC’s “Squawk on the Street” Wednesday (Dec. 30) that he expects the long-term effect of the virus will be a drop in attendance by as much as a quarter.
“The total attendance, based on the traditional curve, might be down 15 percent to 25 percent on a permanent basis. That’s the way we’re gaming this out permanently,” Flix Brewhouse Chief Executive Allan Reagan told CNBC.
Reagan said the industry is struggling not only from forced closings but also from a lack of films to show due to the virus.
Cineworld Chief Executive Mooky Greidinger made a similar remark to CNBC in the fall, saying that the lack of films has left the industry “like a kind of a grocery shop that (has) no food to sell.”
According to Comscore data cited by CNBC, theater-goers in the United States spent $2.28 billion on tickets in 2020, compared with $11.4 billion in 2019.
Forecasts immediately before Thanksgiving weekend exemplified up the industry’s gloomy expectations for the year. Experts anticipated that a weekend that usually generates about $250 million at theater box offices instead would produce $20 million in ticket sales. Overall, expects cited by CNBC foresaw a 77 percent full-year decline for the sector in the U.S.
As if things weren’t tough enough for theater operators, COVID-19 coincides with a wave of improvements in streaming technologies and household access to high-speed internet.
“We’re hoping that the industry, which is a little bit over-screened right now, loses some screens due to natural attrition,” Reagan told CNBC. “I don’t think anybody is going to be head over heels building new theaters right now.”