The rise and fall of movie theaters — and how the coronavirus pandemic might change them

amc movie theater nyc covid19

The movie theater industry has been around for over 100 years,
but unprecedented times have created a perfect storm for the demise
of movie theaters.

“We should be a month into summer blockbusters, and we don’t
even know if they’re going to show up this summer,” Jeff Bock,
senior box-office analyst at Exhibitor Relations, told Business
Insider.

Steadily
declining ticket sales
and now-shuttered movie theaters and
palaces nationwide have put the fates of summer blockbusters into
question.

Here is a look at the rise and fall of movie theaters — and a
solution that could potentially save the industry.

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Early movie theaters, or electric theaters, were housed in tents.

Early “movies” were nothing special compared to the blockbuster
films of today — they were short, black-and-white, silent films
that showed everyday occurrences like workers leaving a factory
after the workday or a train entering a station.

However, they delighted, amazed, and even shocked audiences of
the late 1800s.

The first permanently built movie theater was Tally’s Electric
Theater.

Built by and named after Thomas Lincoln Tally, the theater was
the first building to be built specifically for
the exhibition of films
, rather than a combination of films and
live performances.

The theater opened its door on April 2, 1902, in Los Angeles,
California, according to the
Times Union
. The theater was an instant success, and after
tickets for its night showings between 7:30 p.m. and 10:30 p.m.
began to consistently sell out, Tally decided to add matinee shows
as well.

In 1905, Pittsburgh movie theater owners Harry Davis and John
Harris introduced 5-cent Nickelodeon movies.

The movies were
first shown in Davis’ and Harris’ own theater, the Nickelodeon
.
However, the concept of “Nickelodeon” theaters, which got their
name from the 50-cent charge for patrons, would soon become popular
nationwide. The theaters showed both short films and live
vaudeville performances.

According to
History.com
, by 1907, around 2 million Americans had visited a
Nickelodeon theater. The storefront theaters remained the most
popular outlet for film-viewing until many of them were replaced by
larger theaters built in the 1910s.

Most movie theaters in the early 1900s only had one screen so only
one film could be shown at once.

Not only were movie theaters unable to play more than one movie
at once, they also lacked sound up until the 1920s. Instead, films
would either be silent or
live music would be played inside the theater
to accompany the
images on the screen.


Films with sound were added in 1927
, which opened the
movie-going experience up to a much wider audience. Cinema visitors
no longer had to be literate to enjoy a film.

According to
Smithsonian Magazine
, by 1930 movie theater attendance had
reached more than 90 million visitors per week. 

Post-nickelodeon movie theaters were designed to be glamorous.

Before the 1920s,
movie theaters were seen as a low-class pastime
. However, movie
theater owners wanted to change this reputation in order to attract
a more upscale clientele.

Many theaters, called “movie palaces,” would feature stunning
interiors with carved ceilings, luxurious seats, and expensive
carpets. Visitors would dress in their best clothes to attend the
cinema, often pictured wearing top hats, coats, and other glamorous
attire.

Despite being the most iconic movie-watching snack of today,
popcorn was actually once banned in movie theaters.

It’s hard to imagine movie theaters without popcorn. However,
there was a time when the snack was explicitly banned. While
popcorn was a popular treat at entertainment sites like circuses
and fairs in the late 1800s, movie theaters didn’t allow the food
to be sold.

“Movie theaters wanted nothing to do with popcorn because they
were trying to duplicate what was done in real theaters. They had
beautiful carpets and rugs and didn’t want popcorn being ground
into it,” Andrew Smith, author of “Popped Culture:
A Social History of Popcorn
,” told Smithsonian Magazine. 

Instead, popcorn vendors would park their carts outside and sell
them to people entering the theater. However,
during the Great Depression
, once-prestigious movie theaters
began selling the snack in an effort to appeal to wider
audiences.

The movie theater industry got a revamp with the introduction of
the drive-in in the early 1930s.

On Tuesday, June 6, 1933, Richard Hollingshead opened the

first “park-in” movie theater
in Camden, New Jersey.

According to
History.com
, Hollingshead came up with the idea after listening
to his mother complain about not being able to sit comfortably in
movie theater seats.

He then began experimenting with different projectors in order
to open the first open-air theater, where viewers could drive into
the lot and watch films from the comfort of their own
automobiles.

Drive-in movie theaters continued to be popular well into the 1950s
and became a hallmark of American culture.

According to
History.com
, drive-ins spiked in popularity after World War II
with the introduction of newer technologies.

Throughout the 1950s, drive-in theaters were popular date spots,
as couples could get maximum privacy, and they became a hallmark of
American culture. By the mid-1960s, there were some 5,000 theaters
across the country.

The first multiplex — a movie theater with more than one screen
— opened in a Missouri shopping mall in the early 1960s.

AMC’s
Parkway Twin theater
in Kansas City, Missouri, the first
multiplex theater, opened in 1963 in the Ward Parkway shopping
center. It had two screens and sat 700 people.

When the theater first opened, it would show the same movie on
both screens. However, Stanley H. Durwood, the man who owned and
operated the theater, eventually began showing
two different movies at once
in order to attract a larger
audience.

Soon, single-screen theaters nationwide were being
converted into multiplexes
. This caused many single-screen
theaters that were not renovated to go out of business.

The first permanent Imax 3D theater was built in Toronto in 1971.

“Tiger Child” was created for Expo 1970 in Osaka, Japan, and was
the first movie shown in an Imax theater.

The first permanent Imax installation, called the Cinesphere,
was built at the
Ontario Place theater
 in
Toronto, Canada
. The first film it showed was “North of
Superior.”

The first megaplex built in the United States was the AMC Grand 24
theater in Dallas, Texas.

The 5,000-seat theater opened in 1995 and featured a whopping 24
different screens, many of which opened with the movie “Die Hard
With a Vengeance.”

The movie theater was
bought and renovated in 2011 into AmStar Cinemas 14
, with part
of the original building converted into restaurant space.

Throughout the ’90s, going to the movies remained a popular
activity.

People flocked to movie theaters located in nearby malls and
shopping centers to catch Hollywood blockbusters and witness the
“Disney Renaissance.”

In 1997, James Cameron’s “Titanic” starring Kate Winslet and
Leonardo DiCaprio hit theaters. At the time, it was the
highest-grossing and most expensive movie ever made
, with a
budget of $200 million.

However, movie theater attendance is falling.

According to
Bloomberg
, admissions to movie theaters in the US and Canada
fell 5.8% in 2017, the lowest attendance since 1992. Attendance
rose again in 2018, according to the
New York Times
. However, the following year, both ticket sales
and revenue declined.

Rising ticket prices have allowed movie theaters and studios to
continue churning out billions of dollars, especially with
record-breaking Marvel releases. However, it’s clear that interest
in going to movie theaters has continued to decline.

Over the last few years, the rise of in-home streaming services
like Netflix, Hulu, Amazon Prime Video, and more have changed how
people view movies.

Many blame streaming services like Netflix, Hulu, Amazon Prime
Video, and other platforms for the decline in movie theater
attendance. However, the issue is less about where people can view
the movies and more about what movies are coming out and how much
people want to see them.

According to a
previous article by Business Insider
, in the summer of 2016,
blockbuster sales were flat with the previous year’s sales of $4.49
billion. Attendance was expected to amount to 513 million, a 3.5%
fall from 2015. 

According to the same article, PostTrak found that from 2014 to
2015, the number of people who would go to movie theatres and
decide what to watch on-site had decreased from 32% to 28%, as
cited in the
New York Times
.

Major streaming services have come out with smash hits of their
own.

Netflix’s “Marriage Story” and “The Irishman” both received
Oscar nominations. In a nostalgic nod to film history, Netflix even
rented out the historic single-screen Paris theater in New York
City to show “Marriage Story.”

However, while streaming is now dominating the film industry
more than ever, movie theater giants continue to claim that
streaming availability hasn’t impacted attendance. 

“Everyone has a kitchen, but everyone still goes out to eat,”
Charles Rivkin, CEO of the Motion Picture Association of America,

said in his keynote speech at CinemaCon 2019
, quoting Sterling
Bagby, the late co-founder of B&B Theatres.

The coronavirus pandemic has caused many movie theaters to close,
and it’s unclear how many will reopen, when, or what the future of
movie-going holds.

Some films slated for theater release were made available on
streaming platforms. However, a majority of films have simply
postponed their theatrical release dates, which is
a more lucrative option for film studios.

“We haven’t seen a movie go to streaming that was expected to be
a blockbuster,” Shawn Robbins, chief analyst at BoxOffice.com, told

CNBC
.

Movie theaters are expected to be closed nationwide until at
least mid-June as a result of the coronavirus pandemic, which has
left movie theater giants like AMC, Regal, and Cinemark to figure
out what they should do with their biggest summer releases.

If theaters in the US follow similar guidelines to ones abroad, the
movie-going experience could look vastly different.

According to
USA Today
, three high-profile films are still on the calendar
for this summer: Christopher Nolan’s thriller “Tenet” coming out
July 17, Disney’s live-action “Mulan” premiering July 24, and
“Wonder Woman 1984,” which comes out August 14.

However, summer releases will heavily depend on whether major
cities like Los Angeles or New York City will allow it considering
social distancing and public health restrictions.

“You can either wait for New York or LA to open, which
constitute upwards of 25% of a movie’s gross, on average
domestically, or you can go the village roadshow route and hope the
film performs in states where local governments allow theaters to
be open,” Jeff Bock, senior box-office analyst at Exhibitor
Relations, told Business Insider.

“It’s a lot of money to commit to upfront not knowing if
audiences are going to show, or if there’s enough consumer
confidence to get people out of their boxes at home and into the
theatrical boxes.”

Bock also explains that adult-leaning movies like “Tenet” may go
to theaters as viewers would be “old enough to make their own
decisions,” but that it’s still a major risk for the studios to
launch any big films with only theatrical releases given the
current climate.

Entertainment studios may pivot partially — or even entirely —
to the video-on-demand model for its 2020 or 2021 releases.

“We haven’t seen a week where that hasn’t been a big shift in
the release calendar,” Bock said.

However, tensions between AMC Entertainment and Universal, one
of the biggest film studios in the world, reached a boiling point
when Universal suggested it would change its business model —
even after the pandemic — to include both theatrical releases and
video-on-demand releases after its successful release of “Trolls
World Tour.”

“This radical change by Universal to the business model that
currently exists between our two companies represents nothing but
downside for us and is categorically unacceptable to AMC
Entertainment,” AMC CEO and president, Adam Aron,
wrote in a letter to the studio
. In the letter, Aron also
announced his venues would ban Universal’s movies.

The studio responded: “Our desire has always been to efficiently
deliver entertainment to as wide an audience as possible. We
absolutely believe in the theatrical experience and have made no
statement to the contrary.”

“Everybody’s hurting, but there is money for the taking,” Bock
said. “Hopefully, they can figure something out that appeases both
studios and theaters.”

However, as the coronavirus pandemic stretches into the summer
months, it’s possible that many movie theaters nationwide will not
survive.

“We should be a month into summer blockbusters, and we don’t
even know if they’re going to show up this summer,” Bock told
Business Insider.

According to
Variety
, AMC Entertainment’s stock price fell 58% in the first
half of March, while Cineworld, which owns Regal Cinemas and is
planning to buy Canada’s Cineplex, fell nearly 76%. Cinemark’s
market value also dropped by 68%.

“This could be a ‘three steps forward, two steps back’ situation
with releases coming out and then studios reassessing as they go,”
Bock said. “The question is, is Hollywood going to risk huge
blockbusters in doing so, or will they try smaller films that they
can have a plan B for?”

“It’s hard to be 100% sure that it’s going to be successful
given the state of movie theaters, the state of the industry, and
the state of America,” he continued.

However, drive-in movie theaters are seeing a surprising resurgence
in popularity.

Today, some 500 drive-in movie theaters are still operational,
according to
History.com
.

Due to movie theater closures nationwide as a result of the
coronavirus, drive-in movies are becoming increasingly popular as
an entertainment option in the age of social distancing.

However, if drive-ins are to cooperate and work with the biggest
studios in the industry, Bock explains it will have to be the
“right movie.”

“‘Wonder Woman 1984’ could be an interesting play. They could
release it in the more than 300 drive-ins across the country,” Bock
explained. “It is possible that if ‘Wonder Woman’ plays all summer
long in these packed drive-ins, and some movie theaters will open,
and then if that doesn’t work Warner Brothers could switch to
video-on-demand.”

“It could make a huge amount of money — there are people that
would go out and see it, and there are people that would pay $30 to
see it at home,” Bock said. “If ‘Wonder Woman’ pops up in July, it
could play until December … there’s nothing more American than
‘Wonder Woman.’ Her saving theaters, or just being out there this
summer, will give a lot of people hope.”

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The rise and fall of movie theaters — and how the
coronavirus pandemic might change them