Complex Made Simple

Is the big screen on its last legs?

Are theaters a worthwhile risk today and are they disappearing in the face of online streaming?

Movie theaters have rented out for music videos, TV and film productions, private screenings and birthday parties The pandemic has spurred a streaming boom as cinemas struggle to stay afloat The UAE is the largest growth market for the streaming platform with users growing 70% year-on-year

Are theaters a worthwhile risk today and are they disappearing in the face of online streaming?

Behavior engaged at the movies is relatively benign. Patrons wear facemasks and don’t chatter much. Theaters could be less risky than places like gyms, where people are breathing heavily and sweating, or restaurants where people talk loudly and expel more of the virus, even with masking requirements. 

Any theater planning to pen again has to have a cleaning protocol, provide contactless food ordering ahead of time, not to mention seating arrangements at 25% capacity or less per theater.

But as many theaters are skittish about reopening or are mandated to remain closed by their governments, there are other options to survive the times.

Creative options globally to movie-going

The Arena Cinelounge in Hollywood has shifted to the drive-in and sells gourmet popcorn online. “We have 12 gourmet blends of Cinelounge popcorn. I have to lean on the popcorn revenue stream to bring in any revenue,” says CEO and founder Christian Meoli.  

The popcorn has “grossed over $100,000 for the company.” 

Running the drive-in was not easy, either. “We’re spending upward of five times what we would normally spend with our indoor business to make this happen,” says Meoli.  

The company also runs a virtual screening room for new releases at arenascreen.com.

The Beverly Hills theater Lumiere Cinema tried to do drive-ins but it didn’t work for them and so the owner started a GoFundMe campaign to help the theater survive, so far raising a little more than $12,000 of its $90,000 goal. 

The Gardena theater, also in California, has also shifted to drive-in screening series in their large parking lot, where they sell concession items and movie posters, and feature Zoom interviews before special film showings, such as one with Jurassic Park cinematographer Dean Cundey. 

They also have rented out the theater for music videos and TV and film productions. 

Cinema theaters can also be rented out for private screenings of up to 20 people, usually friends and family or for birthday parties, maintaining good socially distant procedures. 

VOX Cinemas will be temporarily closed from Friday, February 5, until further notice, the operator had said.

 The move is in compliance “with the government-mandated closure of cinemas in Abu Dhabi and Al Ain”, VOX said in a post on Instagram.

“We will be back soon so please stay tuned for updates on reopening,” it added.

Read: Warner Bros/HBO Max deal: The future of video streaming is here, whether we like it or not

Read: Cinema and contagion: The film industry is among Covid-19’s greatest victims

Streaming boom 

The pandemic has spurred a streaming boom as cinemas struggle to stay afloat. 

Streaming platforms such as Netflix, Amazon Prime Video, Starzplay, Disney+, and more have seen a surge in numbers as traditional avenues of entertainment struggle to return to normalcy.

Are theatrical releases fast turning obsolete in light of the streaming revolution or is it just a glitch in the force caused by the pandemic?

In the first two weeks of January, the average viewing time spent on consuming content on a smartphone, a tablet, or even through the living room TV is still at a solid 80 minutes plus a day in the UAE, according to multiple industry sources. That’s against an average of 25-40 minutes in January in 2020.

OTT or ‘Over The Top’ is all about delivering film or TV series via the web in glorious high-definition if the bandwidth and your subscription package allow it, and suddenly you would think you don’t need to head for the cinemas. 

“As a percentage of mobile [subscribers] the penetration is still 10% in the UAE,” said Maaz Sheikh, CEO of Starzplay. 

“If you benchmark the UAE against Western Europe, home penetration has room to grow to 60-70% and mobile penetration to 30-35%.”

Based on Sheikh’s number crunching, that’s about 1 million OTT subscribers in the UAE currently.

Netflix starts from 29 Dirhams ($8) a month for a basic package, and most of the competition has priced in at around these levels.  

Comparing with the 50 Dirhams ($13.6) for a basic cable TV package and which could go all the way to 200 Dirhams ($55) and more for the premium bundles, it’s easy to see why web streaming/OTT services were able to score so decisively against cable TV. 

According to Starzplay, the UAE is the largest growth market for the streaming platform with users growing 70% year-on-year and the number of hours by users increasing nearly 80%.

Hollywood’s Tenet was a massively anticipated release and grossed $363 million worldwide but it was not enough to break even for Warner Bros. Overall, North American box office takings in 2020 reportedly went down 80% from 2019.

Now, many production companies have resorted to releasing movies on streaming services in the US. 

But that doesn’t mean the movie theater will die. The social experience of popcorn and nachos buying, the big screen, sound surround, and oohs and ahhs from the audience is enough to bring people back.