Throughout the COVID-19 pandemic, consumers turned to streaming services as movie theaters, sports stadiums, concert halls, and other live event venues shut down. The gradual reopenings of brick and mortar businesses has boosted movie theater attendance and sales as the summer blockbuster season gets underway. Additionally, some companies such as AMC Theatres have seen increasing average transaction values as well as a growing share of sales taking place online.
Most movie theaters temporarily shut down as shelter-in-place orders went into effect in March 2020. As movie theaters remained closed, sales dropped from late March 2020 until mid August 2020.
AMC Theatres and Cinemark Theatres—two of the largest theater competitors—began opening some of their locations in late summer 2020, with phased reopenings in large metro areas like New York and Los Angeles continuing into spring 2021. Regal Cinemas also started reopening some of its locations in August 2020, but then closed theaters nationwide again in October. Regal reopened again in early April 2021.
After a slow recovery starting in August 2020, movie theater sales are picking up significantly this summer. All three theater chains experienced a sharp increase in sales in June 2021, with combined sales growing 71 percent compared to the month before. Regal Cinemas saw the most growth in this period, with 128 percent. However, combined sales among these major competitors are still half of what they were in January 2020.
Average transaction values increased during the pandemic
At AMC and Cinemark Theatres, average transaction values have been on the rise. In March 2020, the average transaction value was $22 at AMC and $17 at Cinemark. Early in the pandemic, from April through June 2020, average transaction values dipped for both companies, but spiked in late 2020. As of June 2021, the average transaction value jumped to $26 for AMC and $21 for Cinemark.
One possible reason for the increased transaction values is that both of these theaters charge additional fees for tickets that are ordered online rather than purchased at the theater. Another factor could be that both companies have introduced private theater rentals, a pricier option which allows customers to book an entire theater for their group to watch a film.
Online channel comprises higher share of sales at AMC
Another notable change is the shift to online sales for some theater chains like AMC. In 2020, a monthly average of 51 percent of sales at AMC took place online, compared to 39 percent in 2019. As of June 2021, an average of 50 percent of monthly sales, year-to-date, are from online.
While the shift to online sales might be attributed in part to COVID-19, several of AMC’s online offerings pre-date the pandemic. In addition to movie tickets and concessions being sold online as a contactless payment option, AMC has offered online movie rentals on demand since 2019, which may partially account for its increasing share of online sales over time.
In late 2018, AMC Theaters also implemented a subscription-based loyalty program called Stubs A-List. Similar to the now-defunct Moviepass, Stubs A-List charges a monthly membership fee in exchange for giving customers access to multiple movie viewings—in this case, three AMC movies per week.
Movie theaters face competition from streaming services
While movie theater sales are recovering, the rise of streaming services may alter how studios choose to distribute their new releases in the future. As a result of the pandemic, Disney shifted some of its planned 2020 theatrical releases such as Mulan and Soul to its Disney+ streaming platform. Even as movie theaters are reopening, some movies like Cruella and Black Widow that were originally slated for release to theaters have been simultaneously released to Disney+ through Premier Access.
Aside from Disney, other movie studios have deepened their relationships with streaming platforms over the past year. Notably, all Warner Bros. movies in 2021 will premiere on HBO Max as well as in theaters. Amazon, which has its own streaming service Prime Video, also recently purchased MGM to further expand its film and TV catalog.
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