Movie Theaters
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,800 movie theater firms in the US provide entertainment venues that exhibit motion pictures or videos. They operate about 41,000 movie screens at over 5,800 cinema sites. Major sources of revenue include ticket sales, concessions, and merchandise resale. Some theaters specialize in a particular genre, such as foreign, art house, and documentary films.
Conversion to Digital
The film industry’s conversion from celluloid to digital projection technology involved considerable costs, and created significant financial obstacles for small, independent theaters.
Dependence on Movie Production Industry
Movie theaters depend on the production houses and distributors to develop appealing motion pictures and support releases with marketing and advertising.
Industry size & Structure
The movie theater industry consists of about 1,800 companies that employ 48,000 workers and generate about $17 billion annually.
- There are about 41,000 movie screens in the US - about 1.3% of these are outdoor screens.
- There are over 5,800 cinema sites in the US.
- The industry is concentrated; the top 50 firms account for about 80% of industry sales.
- Large companies include Regal Entertainment, AMC Entertainment, and Cinemark Holdings.
Industry Forecast
Movie Theaters Industry Growth
Coronavirus Update
Apr 29, 2022 - End Is In Sight For Same-day Release Model
- The same-day release model for theaters and streaming may be losing momentum as people return to movie theaters in increasing numbers, according to John Fithian, President and CEO of the National Association of Theatre Owners. Industry experts say that same-day releases were a necessary part of the box office recovery from the coronavirus pandemic, but content piracy associated with streaming cut deeply into movie studio profits. "When analyzing title after title it becomes very clear that spikes in piracy are most drastic when a movie is first available to watch in the home: It doesn't matter if its available via premium video on demand or subscription video on demand," said Fithian. "Robust theatrical windows protect against piracy."
- Recovery in the movie theater industry may accelerate as COVID-19 restrictions are lifted. Hawaii, the last US state with a mask mandate in place, allowed the mandate to expire on March 25. The US Centers for Disease Control and Prevention's latest guidance recommends that people continue to wear masks indoors in communities with high levels of Covid-19. The agency last week said that more than 90% of US residents are now in a location with low or medium Covid-19 community levels.
- Movie theaters remain a key point of concern about the spread of COVID-19, according to many health experts. "The number of people watching a movie with you is going to be the main concern when inside a movie theater," said Kenneth Perry, MD, and a Fellow of the American College of Emergency Physicians. "If a movie theater has appropriate separation between parties, the risk is still probably low, but for new releases where the theater is filled, the risk continues to be too high."
- About 80% of the 2020 movie slate was pushed to 2021 while the remainder were sold to streaming services, according to the Kansas City Business Journal.
- Movie theaters have reopened around the US but competition for debut films from streaming services and continuing theater capacity limits make the prospect of filling theaters unlikely in the foreseeable future, according to Moody's debt analyst Neil Begley. Begley expects the industry to see more shake-ups as studios consider withholding premium content until more certainty emerges.
- Pandemic-driven changes in consumer preferences and disagreements between studios and theaters have resulted in lower film availability overall, according to The New York Times. Some traditional studios have started to prioritize streaming, causing resistance from multiplex operators accustomed to having first access to content. Releases have slowed as a result. “It’s going to take some time for things to settle out,” said David A. Gross, who runs Franchise Entertainment Research, a movie consultancy. Disney CEO Bob Chapek has said that even after the pandemic, the company will release movies in new ways, with some offered to theaters on an exclusive basis, some being offered on a hybrid theater/streaming model, and others made available exclusively (and for no additional fee) on the Disney+ streaming service, which now has nearly 100 million subscribers worldwide.
- The $900 billion stimulus package passed in late December 2020 includes roughly $15 billion in aid for struggling movie theaters, live venues, and other cultural institutions. The funding is provided through the "Save Our Stages" legislation that was included in the stimulus package. “More help is on the way,” Senate Majority Leader Mitch McConnell said as he announced the deal on the Senate floor. Many details that will determine how the money will be allocated were not worked out as of early January 2021, but large theater chains and those that are publicly held or foreign-owned were explicitly excluded from the program.
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