AMC, the world’s largest movie theatre chain, has reported that it lost $4.6 billion in 2020. The losses came as a result of the ongoing COVID-19 pandemic, which has devastated numerous business sectors throughout the world, hitting cinemas especially hard. Even now, as a vaccine appears to be helping, theaters are still struggling to remain afloat.
From the early days of global lockdowns last year, the situation was not looking good. Obviously, the biggest concern was how Covid would impact global populations, but in time, as scientists and doctors began to understand more about the disease, it became clear that the pandemic wasn’t going to disappear anytime soon. For businesses that relied on large public crowds, like restaurants, nightclubs and movie theaters, this was a very precarious turn of events. It didn’t take long at all for the impact of Covid and lockdown to truly be felt among theater owners, and while large multinational chains like AMC grappled with the sudden challenge to their business model, many independent theaters found that it was no longer possible for them to exist in the current, incredibly unexpected climate.
However, simply because theaters like AMC had far more financial clout behind them, didn’t guarantee they were immune to Covid’s clutches. As a new year continues to deal with Covid’s impact, information regarding the disease’s effect on 2020’s theatrical business model is unsurprisingly grim. According to Variety, AMC lost $4.6 billion last year. Compared to pre-pandemic tallies in 2019, AMC’s revenues fell 77.3% in 2020, with 2019’s totals hitting a now unfathomable $5.5 billion.
Fortunately, with the Covid vaccine gradually finding its way to people of all ages, movie theaters are slowly able to ease restrictions. Still, at the current rate that things are moving, it will be quite some time before the likes of AMC can financially find themselves back where they once were. Then again, there’s no shortage of those who believe that businesses around the world will never return to the comfortable state they found themselves in prior to Covid. Paramount is just one of several major studios that has already drastically cut the window for the jump from theatrical release to streaming, and this new emphasis on streaming over the theatrical model has the potential to completely replace cinemas. Of course, this fear is nothing new, but the arrival of Covid proved to many how very real it is.
It remains to be seen if theater chains can continue to thrive in what has become a very difficult environment. Simply getting audiences back into theaters isn’t the only challenge here, and AMC is well aware of how threatening the looming success of subscription streaming services is. Few businesses could ever hope to lose $4.6 billion in a year and still be fighting for life, so in that respect, AMC has a slight advantage. At the same time, however, without a clear indication that audiences will maintain their support for cinemas over streaming providers, the future of the traditional release model faces some dark days.
Source: Variety