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Summer blockbusters give cinemas a much-needed boost

“A Quiet Place II” and “Fast & Furious 9” have drawn people back to theatres, but venues are still at risk

WHEN COVID-19 struck and economies locked down, journalists and industry observers predicted that the end of cinemas was nigh. AMC, which runs 1,000 cinemas worldwide, lost $4.6bn in 2020; in order to stave off imminent bankruptcy, the entertainment company raised almost $1bn earlier this year through loans and equity sales. Cineworld, the next-biggest operator, with almost 700 outposts, lost $3bn. Thanks to cost-cutting and loans, they received $750m in funding in November but by March had to agree to a new convertible bond of $213m. Executives at AMC said that survival was dependent on film-lovers coming back to cinemas, ideally reaching 65% of pre-covid attendance in the third quarter of this year and 90% in the fourth.

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The vaccine rollout and easing of restrictions in many countries has allowed the projectors to start running again. In May 2020 just 211 cinemas were open in North America, roughly 3% of the pre-pandemic total, but today 80% of American and Canadian cinemas are selling tickets. Hollywood’s “popcorn season” (the industry’s term for the lighter fare released in the summer months) has also drawn people from the sofa back to the big screen. “A Quiet Place II”, a follow-up to a hit horror film of 2018, was released in May and has made $250m at the global box office from a budget of $61m.

Audiences are particularly animated by the latest instalment in the popular “Fast & Furious” franchise: “F9” has become the first proper blockbuster since the pandemic began. The film has grossed more than $400m worldwide (from a budget of $225m), and made $136m in its opening weekend in China in May. Indeed, the Chinese market is now the world’s biggest, having been open for business since July last year. During the lunar new-year holiday in February, cinemas made an estimated $1.5bn in ticket sales—71% of takings at the American box office in all of 2020. This year’s ticket receipts in China are higher than the intake for the same period in 2019, a record year.

Though the box-office performance in the West in recent weeks has been promising, and substantially higher than the same period in 2020, the ambitious targets set by cinema operators have not yet been reached (see chart). But industry analysts are confident that demand will continue to pick up, with films including Marvel’s “Black Widow”, “Top Gun: Maverick” and “No Time to Die”, the much-delayed James Bond film, slated for release in the coming months. Michael Pachter, research analyst at Wedbush Securities, an investment firm, predicts that the second half of the year in North America “will be pretty close to normal—typically $5.5bn, and I’d say $4bn minimum”. Much like an action hero after a big fight, cinemas are down but they are not out.

Read more: Cannes kicks off a brighter blockbuster season

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