With LA Reeling From the Arclight Hollywood and Landmark Pico Closures, we take a closer look at the film exhibition – Below the Line

Landmark Pico

The former Landmark Theater on Pico

For 15 years, the Landmark 12-screen Pico cinemas have been a hub for cinema-going—art films and blockbusters alike. But COVID-19 thinned the crowds, and when Landmark couldn’t reach an agreement with the landlord, Landmark became the president of Landmark Theaters Kevin Holloway had to announce its closure at the end of May. All who love cinema, especially those living on the Westside, mourned its demise, as did the iconic Cinerama Dome and 15 other ArcLight locations that closed in 2021.

In 2020, the National Association of Theater Owners (NATO) asked Congress to include movie theaters in the Save Our Stages relief initiative in the next COVID law, stating that without help, 70 percent of movie theaters in the US could file for bankruptcy or become close at the end of the year.

As COVID-19 continues to wax and wane, it’s time to delve into the messy and complicated business of film exhibition. While Top Gun: Maverick may have been the first billion-dollar film of Tom Cruise’s long career, theaters are still going through a difficult time. At the CinemaCon last April NATO President John Fithian propagated the box office success of such publications as Spider-Man: No Way Homewhich he said “provided historic revenue”.

Yes, a handful of blockbusters have done extremely well during the pandemic, but earlier this year, on Jan. 7, Gallup announced that “Americans have seen an average of 1.4 movies at a theater in the last 12 months,” compared to average 4.8 they watched between 2001 and 2007. In the past 12 months, Gallup found a “historic high” of 61 percent of Americans not going to a movie at all, compared with 32 percent between 2001 and 2007.

David Bloom

David Bloom

It would be easy to conclude that COVID had a drastic impact on the film exhibition but on the writer and the industry consultant David Bloom believes that the overall picture is more nuanced.

“It’s not just about COVID,” Bloom said. “Even before the outbreak of the pandemic, revenue was only increasing because theaters were charging more for tickets and the number of ticket buyers was falling. Especially among younger people, regular cinema habits have declined and continue to decline.”

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In fact, according to NATO, the peak for the number of cinema sites was 1996 with 7,798; By 2020, that number had dropped to 5,798. Media analytics firm Comscore says nearly 12 percent of theater locations closed just before COVID-19; Half of these had three or fewer screens, with rural areas and small towns being particularly hard hit. When movie theaters reopened, fewer consumers than ever went in.

Movie multiplexes often anchor malls, and according to Bloom, malls — weakened by e-commerce — are now in dire straits, particularly the “B or C-level” malls. Before the 2020 pandemic, Coresight Research predicted that 25 percent of the 1,000 US malls would close by 2025; Multiplexes attached to such malls would thus lose all of their foot traffic.

Another complicated issue whose roots have nothing to do with COVID is the challenge of providing theater chains with enough content; Bloom states that “there aren’t enough films in the pipeline for all of their screens.” One reason for this was Hollywood’s shift from mid-budget (in the $10-70 million range) films to blockbusters based on established franchises. Over 20 years ago, Hollywood discovered that low-dialogue action-adventure films were making big box-office sales worldwide; International revenues have dominated box office revenues since 2003. meeting just reported that according to Gower Street Analytics, the international box office in 2021 “took an estimated $16.9 billion, a 66 percent increase from the previous year.” The same blockbusters are also doing boffo box office in domestic cinemas – but there aren’t enough of them to feed everyone’s screens.

The video game industry — worth four times the movie industry, according to Bloom’s estimates — is another factor weakening the film exhibition. Bloom points out that gamers stay at home and play for hours at a time. In response, Hollywood continues to try to lure gamers into theaters with films based on game franchises, but the results have been mixed. But in a studio like Sony, which has both a film studio and a games division, it makes a lot of sense.

Arclight Hollywood

Arclight Cinerama Dome

Sony PlayStation boss Jim Ryan announced that the company has ten films based on gaming titles in the works. “We will continue to enhance the experience for our community by working with partners and across the Sony Group,” said Ryan. “One particularly notable collaboration is our ongoing work with Sony Pictures to adapt key gaming IP for film and television entertainment.”

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Streaming is, of course, another piece of the pre-pandemic puzzle. While the international box office and mid-range video games/films and younger audiences declined, the advent of streaming changed that Everyone viewed content. Netflix began streaming video in 2007, the same year it shipped its billionth DVD, another entertainment option keeping consumers at home. At the same time, TVs evolved from HighDef to 2K and 4K with HDR (High Dynamic Range) and other bells and whistles. People worried about catching COVID at a movie theater, Bloom said, “have used their stimulus money to buy a 75-inch TV with a soundbar — and they’re OK with it.” According to Statista, by 2019 181 million Americans streamed videos.

Streaming dealt another blow to the screening business. Before home video became a reality with VHS, cinemas could show films for six months without competition. With VHS, that ‘window of exclusivity’ shrank to 90 days.” Streamers who created their own original content had no qualms about releasing it in some theaters and on their streaming platform at the same time. Exhibitors felt the pain, and NATO fought for the return of the exclusivity window.

Ever since, filmmakers, studios and streamers have been looking for a way to do business that protects their own interests while being acceptable to the other parties. Disney gave Black widow an exclusive theatrical release that moves the streaming date from May 7th to July 9th. NATO’s Fithian called it a victory, stating that “simultaneous release as a serious business model is dead, and piracy has killed it.” But distributors and exhibitors are still working on exclusivity windows, on a studio-by-studio basis and even on a film-by-film basis.

COVID is just the latest bump on the road for exhibitors, distributors and content creators. And it’s not a factor that’s likely to go away any time soon. Bloom notes that recent research shows that the virus, which continues to evolve rapidly, will come and go more like colds than flu. “That’s going to make it harder for vulnerable people to watch the smaller $20 million movies,” he said.

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Meanwhile, streaming platforms have their own problems. Paying for Netflix, Amazon Prime, Disney+, Paramount+, Hulu, and HBO Max is too much money and too much content for the average consumer. Some of the platforms are already embracing the idea of ​​adding advertising, live events and other disruptive models. Even if it is not imminent, we will see a market shakeout in this area; not every streaming platform will survive.

Cinemas are now also busy taking on other uses for their conventional cinemas, showing everything from opera concerts to live eSports games. However, Bloom predicts that we will see “continued consolidation” in the film showroom. “Private equity will do what it does for media sectors that are in trouble and are still wasting money,” he says. “They will buy up the smaller chains, roll them up and extract as much as they can. I think it will be interesting to see how many theater exhibitors will continue to offer better chairs, better audio quality and better concessions to make it an experience.”

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