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Have You Gone to the Movies For the Last Time?

COVID-19 is killing movie theaters, too.
April 13, 2020
Have You Gone to the Movies For the Last Time?
(Lynn Goldsmith/Corbis/VCG via Getty Images)

1. Movies

The follow-on effects of the pandemic are going to be too large and too variegated to predict with total certainty. But some of them seem fairly likely.

For instance, masks are here to stay, at least in the medium-term. Expect them to be a semi-permanent facet of public life until there is a COVID-19 vaccine.

I also think it’s possible that stadium-level gatherings—sports, concerts, etc.—will be altered in large ways.

And then there’s this: It’s very possible that you have already seen your last movie in a theater.

The movie theater business has two halves: The studios, which make the movies, and the exhibitors, who own the theaters themselves.

In the years leading up to this moment, both sides of the business where under a great deal of economic stress.

The studios had gone from being stand-alone businesses to parts of other large conglomerates. And the exhibitors—who were always low-margin businesses to begin with—were facing new competition from home entertainments. Most especially, streaming video.

So even before the pandemic, there was growing pressure to kill the theatrical release of films and move the entire business to streaming platforms on the internet.

And now we are at a moment where the movie studios have seen the theatrical box office go to zero—which is very bad for them and for the expensive products they make.

And the exhibitors have seen their entire revenue base go to zero.

The studios are in a slightly stronger position, because they’re owned by large corporations and have other revenue streams.

But the theaters? They’ve been hit by an asteroid.

Understand that theater chains are small, undercapitalized businesses. The largest theater chain in America is AMC, and they have a total market cap around $300 million. That’s not a typo.

The vast majority of movie screens in the country are owned by just four companies—AMC, Regal, Cinemark, and Cineplex. Of those, AMC is, far and away, the healthiest and most forward-looking business. Since the outbreak, AMC has furloughed its entire staff–from the CEO down to the high school kids scanning your tickets.

It is entirely possible that they will be bankrupted by early summer.

And if AMC goes down, the other three large exhibitors will follow.

What then?

I find it difficult to believe that anyone would be willing to buy these assets out of distress. For one thing, they’re not really “assets.” The exhibitors don’t own much aside from popcorn poppers, rows of stadium seats, and projectors. There’s almost no inventory and for the most part, they don’t own the land or the structures they’re housed in.

The only thing they have going for them is a cultural habit of people going to see movies in large communal spaces.

And even after the theaters are allowed to reopen, how much is that habit going to decline over the course of, say, the next 18 months? 20 percent? 50 percent? 80 percent?

The only potential buyers would be companies with a vested interest in keeping the theatrical model going. By which I mean, the studios themselves.

That’s only a possibility because the Paramount Consent Decree was reversed just a few weeks ago. But here’s the thing: It’s not clear that any of the studios will be in a position to buy, since they’re going through their own armageddon.

So what happens is this: The theater chains go bankrupt. The studios, who need to have some way to monetize their products in the near term, push all film releases to streaming-on-demand. And by the time American society is recovered enough that (1) people are willing to go to theaters in large numbers again and (2) someone has the capital to start a new exhibition businesses comes around, the studios are no longer willing to give up their streaming model for exclusive theatrical runs.

Which, in turn, makes the theater business untenable. Even in a world where we have a coronavirus vaccine.

All of which is why I think it is very possible—let’s call it a 2-in-5 chance, or maybe 3-in-5—that most movie theaters never reopen and this wonderful experience that’s been part of our lives for the better part of a century—sitting in a dark auditorium with strangers, watching amazing stories told on a screen that’s 30 feet tall—simply goes away.

That would be a tragedy. Not 15,000-dead-Americans level of tragedy. But tragic none the less.

2. Hong Kong

You might have expected Hong Kong—densely populated, high median age, tons of international travel, right on the Chinese mainland with direct flights to Wuhan—to have gotten hit hard by the coronavirus.

Nope. So far, only 4 deaths and 1,000 confirmed infections.

This Medium piece looks at what Hong Kong did right:

  1. Hong Kong began shutting down public facilities when there were fewer than 10 confirmed cases. The government acted with urgency when cases began to appear. Hong Kong shut down all schoolsparks, and public museums on January 29th, when there were only 9 confirmed cases and 0 deaths. The Hong Kong Marathon was canceled on February 8, when there were only 36 confirmed cases in Hong Kong. This stands in stark contrast with governments elsewhere who were quick to administer travel bans but slow to encourage, much less mandate, social distancing. Examples include President Trump suggesting the threat from COVID-19 was exaggerated and Bill DiBlasio recommending New Yorkers go out on the town in early March. Other examples include the mayor of Los Angeles allowing a 27,000-person LA marathon when there were hundreds of cases in California. Spain also held The International Women’s March in early March.
  2. Hong Kong isolates ALL positive cases and quarantines close contacts in government facilities. Every person who tests positive, even if symptom-free, is put into the public hospital system. Patients are then required to remain at hospitals until they produce two consecutive negative tests. Should hospitals run out of beds, the government will isolate patients in other facilities. Details about every case are made public through government websites. All known contacts of the positive cases must spend 14 days in government quarantine. A study of one China province showed that 80% of cluster infections originated from people who tested positive and were told to rest at home. Wuhan began quarantining all mild cases in makeshift hospitals converted from offices, stadiums, and gymnasiums in early February, a move that helped dramatically slow the spread of the virus. Doctor Aaron E. Carroll wrote in the New York Times that a robust system of contact tracing and isolation is necessary to prevent further outbreak and lockdown.
  3. Hong Kong’s population has broad virus awareness, largely a result of SARS. The memories and lessons of SARS linger in Hong Kong. Since well before COVID-19, masks have been commonly used by individuals who harbor a common cold. Buttons on elevators are frequently sterilized once if not more times each day. It is customary not to wear shoes within the home and gel sanitizer is widely available throughout shared facilities such as office buildings. The population quickly tapped into virus-prevention mode as soon as the news of the virus circulated from Mainland China. Not wearing a mask is shunned in Hong Kong, and the population takes pride in responsible, virus-preventative everyday behavior. According to a poll by SCMP, the majority of Hong Kong residents believe they have only themselves to thank rather than the government if the city wins its battle against COVID-19.
  4. Hong Kong tests all people entering the country and requires them to home quarantine for 14 days. Hong Kong only recently implemented severe travel bans, denying entry to non-residents on March 25. There was, however, a 14-day required home quarantine for people arriving from Mainland China, which was then expanded to arrivals from nearly anywhere in the world. While a delay in requiring home quarantine for European and American visitors led to a second wave of cases, that surge has already begun to flatten. People in home-quarantine wear electronic bracelets that track location. While there were initial glitches with the technology, the spirit of the law is broadly respected and violations are enforcedThree people have already been sentenced to jail time for breaking the quarantine.

You will note here that officials in Hong Kong did not insist that the virus was not a threat. Or that only a handful of people had been infected. Or that the liked the numbers. Or that the number of infections was headed to zero. Or that the virus would go away “like a miracle.”

They took it seriously from the very start, they acted quickly, and as a result they managed the outbreak with minimal loss of life and economic destruction.

Just your daily reminder that our experience of the pandemic in America was neither impossible to predict nor impossible to stop. What it is, is the largest executive failure in our nation’s history.

3. Gatekeepers

I’m old enough to remember when sophisticated futurists wouldn’t shut up about how awesome it was the publishing was being democratized by the internet because the Gatekeepers Were Terrible and what we really needed was a system where every Tom, Dick, and Harry could tell the world exactly what they think about everything.

How’s that working out for us?

“Give me, a white man, a reason to live,” a user posted to the anonymous message board 4chan in the summer of 2017. “Should I get a hobby. What interests can I pursue to save myself from total despair. How do you go on living.”

A fellow user had a suggestion: “Please write a concise book of only factual indisputable information exposing the Jews,” focusing on “their selling of our high tech secrets to China/Russia” and “their long track record of pedophilia and perversion etc.”

The man seeking advice was intrigued. “And who would publish it and who would put it in their bookstores that would make it worth the trouble,” he asked.

The answer came a few minutes later. “Self-publish to Amazon,” his interlocutor replied.

“Kindle will publish anything,” a third user chimed in.

They were basically right. . . .

[Amazon Kindle Direct Publisher releases] include “Anschluss: The Politics of Vesica Piscis,” a polemic that praises the “grossly underappreciated” massacre of 77 people by the Norwegian neo-Nazi Anders Breivik in 2011, and “The White Rabbit Handbook,” a manifesto linked to an Illinois-based militia group facing federal hate-crime charges for firebombing a mosque. (Amazon removed the latter last week following questions from ProPublica.) About 200 of the 1,500 books recommended by the Colchester Collection, an online reading room run by and for white nationalists, were self-published through Amazon. And new KDP acolytes are born every day: Members of fringe groups on 4chan, Discord and Telegram regularly tout the platform’s convenience, according to our analysis of thousands of conversations on those message boards. There are “literally zero hoops,” one user in 4chan’s /pol/ forum told another in 2015. “Just sign up for Kindle Direct Publishing and publish away. It’s shocking how simple it is, actually.” Even Breivik, at the start of the 1,500-page manifesto that accompanied his terrorist attacks, suggested that his followers use KDP’s paperback service, among others, to publicize his message.

That these books are widely available on Amazon does not seem to be an accident but the inevitable consequence of the company’s business strategy. Interviews with more than two dozen former Amazon employees suggest that the company’s drive for market share and philosophical aversion to gatekeepers have incubated an anything-goes approach to content: Virtually no idea is too inflammatory, and no author is off-limits. As major social networks and other publishing platforms have worked to ban extremists, Amazon has emerged as their safe space, a haven from which they can spread their message into mainstream American culture with little more than a few clicks.

Read the whole thing.

Jonathan V. Last

Jonathan V. Last is editor of The Bulwark.