Shutterings And Streaming: Predicting Theaters’ Next Moves In The Time Of COVID-19

AMC Theatres might not reopen after pandemic, while other chains look towards streaming services

As the novel coronavirus pandemic sweeps across the globe, the film industry continues to take massive hits as a result. While no specific area is being spared, movie theaters and exhibitioners in particular are taking a rather hard pummeling.

Potential AMC Closure

Reports are now circulating that AMC Theatres, America’s largest movie theater chain, may not survive this pandemic.

The company, like many other multiplex chains and independent theaters alike, closed its doors back in March as COVID-19 accelerated its spread. At the time AMC’s CEO Adam Aron was hopeful that the company could reopen its theaters’ doors around mid-June.

But according to an April 3 credit update from S&P Global, AMC Theatres has been downgraded from a B rating to a CCC-.

“[S&P Global] expects AMC Theatres to remain closed beyond June due to the impact of the coronavirus and does not believe the company has sufficient sources of liquidity to cover its expected negative cash flows,” the ratings agency said in their statement. “[We expect] the company to breach its 6x net senior secured leverage covenant when tested on Sept. 30, absent a waiver from its lenders.”

AMC management is still hopeful to turn those negative predictions around. On March 25 the company announced 26,000 furloughs and lay-offs to help cut expenses – 600 of which were corporate employees, including CEO Aron.

However, analysts doubt that those cuts will be enough for a company already operating on a $5 billion deficit. By the end of 2019 in particular, AMC reported losses of about $149 million. S&P Global says they would raise AMC’s credit rating back up if the company could secure more financing, but they are doubtful of such a development.

“This would likely require conclusive knowledge about the length of the theater closures and a view that the box office would return to normalized levels in 2021,” the ratings agency said.

AMC hopes to gain some financial assistance through Congress’ CARES Act, but any aid has yet to be approved.

ScreenPlus Streaming Service

While physical theaters have taken a hit as of late, VOD and subscription services are surging in popularity. With new technology, traditional movie theaters are hoping to close the theatrical window and get in on the streaming action.

ScreenPlus, an off-shoot of parent company Shift72, has partnered with tech company Vista Group to offer personalized VOD platforms for various movie theaters. This will open up at-home viewing potential for many of Vista Group’s exhibition clients, including Regal and Landmark chains. (The aforementioned AMC Theatres chain already has its own service, AMC Theatres On Demand.)

Although ScreenPlus’ rollout was accelerated by the COVID-19 pandemic, the collaboration has been in the works for some time. ScreenPlus and Shift72 have previously developed secure streaming platforms for film festivals such as SXSW and Cannes’ Marché du Film.

“The cinemas have lost out as a result of the current COVID-19 crisis, but this will potentially generate additional revenue and retain the relationships exhibitors have with their customers,” ScreenPlus director John Barnett said in a statement.

However, none of these potential ScreenPlus-based platforms have been made public yet. Some distributors have ignored the theatrical window entirely and are already putting their new releases on traditional VOD outlets. Given the prevalence of pre-existing outlets, it remains to be seen if these new theater-based platforms will actually take off. But, as with anything amidst this pandemic, it’s hard to predict any sort of definite outcome.

Novel Coronavirus Update

The novel coronavirus, resulting in the COVID-19 disease, has brought much of the world to a grinding halt. Many countries have taken up social distancing and isolation measures to prevent a further spread of the virus. As of this writing, the Center for Disease Control and Prevention reports over 374,000 cases within the United States, including over 12,000 related deaths. The World Health Organization reports over 1.2 million cases of the virus worldwide, with more than 72,000 deaths.

Keep abreast on our reporting of the outbreak as it pertains to the entertainment industry here. You can also watch IndieWire’s listing for more frequent updates. Stay inside, stay healthy, and stay safe.

Leave your thoughts on AMC Theatres’ potentially permanent shuttering (via MovieWeb and The Wrap) and ScreenPlus’ venture into theater-specific VOD platforms (via THR) below in the comments section. Readers seeking to support this type of content can visit our Patreon Page and become one of FilmBook’s patrons. Readers seeking more movie news can visit our Movie News Page, our Movie News Twitter Page, our Movie News Facebook Page, and our Movie News Pinterest Page. Want up-to-the-minute notifications? FilmBook staff members publish articles by Email, Twitter, Instagram, Tumblr, Pinterest, and Flipboard.