The Christopher Nolan movie ‘Tenet’ is due for release in theaters amid a pandemic.
Photo: Warner Bros/Everett CollectionCan movie theaters survive the pandemic? A Texas-based chain and a British-born director might help answer that question.
Cinemark Holdings, CNK 5.50% based in Plano, Texas, operates 4,649 screens in the U.S. and another 1,496 screens internationally, making it the third-largest theater chain in the world behind AMC Entertainment and Cineworld. It is also considered to be the most financially healthy of the three, with Robert Fishman of MoffettNathanson noting the company “historically has been the most disciplined and conservatively run theater operator.”
Cinemark itself maintained in its first-quarter earnings call Wednesday that it has the financial wherewithal to survive even if theaters remain shut down for the rest of the year—though it isn’t expecting to test that assertion. The company outlined a plan to begin a phased reopening of its theaters on June 19, starting with classic movies for $5 a ticket. Chief Executive Mark Zoradi strongly hinted on the call that even the popcorn will be cheap.
Given that nearly every classic movie is now available to stream, that won’t be enough to revive the industry after months of shutdown. Enter Christopher Nolan, the director and creative force of some of the biggest blockbusters of the past few decades, including the latest Batman trilogy and “Inception.” He also is a big fan of the movie-screen format, calling it a “vital part of American social life” in a Washington Post editorial published in late March—just after theaters across the country were closed due to the coronavirus outbreak.
Mr. Nolan hopes his latest film—a psychological thriller called “Tenet”—will be enough to start bringing moviegoers back. “I know Chris really would like to be coming out with the film that opens theaters,” IMAX CEO Richard Gelfond said on his company’s earnings call late April. “Tenet” is due for release on July 17—a date Mr. Nolan and his studio Warner Bros. have stuck by even as other major blockbusters have been moved out of the summer window.
That makes “Tenet” a key part of the recovery plans for theater operators. The movie was mentioned 18 times on Cinemark’s call. The company and the industry also expect more state and local governments to relax restrictions by mid-July. According to tracking by the National Association of Theatre Owners, 28 states had approved at least limited reopening of theaters by the end of May, with 14 others targeting dates in June. Mr. Zoradi said he expects the “vast majority” of states and counties to be allowing theaters to operate at 50% capacity by the time “Tenet” is released.
Whether people show up is a whole other question. Michael Pachter of Wedbush notes that because 30% of the moviegoing audience is made up of people 50 and older, “a significant portion of moviegoers are not going to be bold enough to return to theaters.” There is also the risk that studios may continue to shift fare directly to streaming channels—bypassing theaters altogether.
But in a survey last month by market-research firm EDO, 75% of respondents said they would return to theaters if enhanced safety measures were implemented. Mr. Zoradi described many of the measures the company plans to take, including health monitoring of employees, staggering showtimes to minimize crowds and implementing “seat-buffering technology” to maintain space between parties. He maintained that Cinemark can “operate profitably in an environment with reduced capacity.”
It may not keep the popcorn cheap for long, though.
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