While there has been a steady stream of new movies and television to enjoy during this pandemic, the pleasure of seeing a blockbuster on the big screen is a gaping absence for many of us. Even as studios continue production on upcoming films, they have been shifting and delaying most of their schedule for coming up on a full year. It may not seem like the end is in sight as variants of COVID-19 continue to pop up, but some industry insiders see hope on the horizon.
According to Eric Wold, a veteran analyst with B. Riley Securities, the box office will roar again in 2023. Wold's words of encouragement arrive just before results from the final quarter of 2020 are due. As one would expect, the findings are likely to be grim, though that doesn't mean that theaters are down for the count. When looking at the numbers, Wold predicts that the box office will drop by 40% in 2021 and another 7% in 2022 before rising 7% to a new benchmark in 2023.
Per Deadline, Wold also raised his 12-month price targets on four stocks in the sector: AMC Entertainment, to $5.50 from $3.50; Imax to $28 from $26; Marcus Corp. to $25 from $19; and National CineMedia to $6 from $4.50. He has “buy” ratings on all U.S. players except for AMC, which he rates “neutral.”
Wold's forecast comes just one day after AMC announced that they've raised more than $700 million in financing. With that money intact, AMC will be able to "keep the lights on" as it were. For now, much of what Wold has divined depends on the audience's desire to return to theaters. “We remain optimistic that moviegoers will return to theaters when permitted to catch the best film slate in years,” he wrote in his report. He also stated that he sees a bright future ahead for AMC, regardless of the company's significant dept and liquidity concerns. “We understand that the pandemic provided an opportunity for AMC management to evaluate every dollar going out the door and reevaluate all aspects of the business,” he wrote. “With that in mind, we expect the combination of more efficient labor utilization, optimization of operating hours/showtimes in the midweek period, and an enhanced push around the company’s AMC Stubs A-List subscription program to drive stronger theater-level EBITDA margins coming out of the pandemic and heading into the stronger film slates of 2021-2023 as moviegoers return to the theaters.”
While this all sounds very promising, there remains a concern as to how much damage streaming services can do to the theater-going experience. A number of tentpole titles have recently been sold to a variety of streaming platforms, and, should the distribution method work in a studio's favor, what's to stop them from porting films to VOD services even after the pandemic is truly over? Truthfully, I don't have an answer to that question. How could I? It's totally a wait-and-see situation, with the outcome hanging on any number of unknowns. At the end of the day, I think people are looking forward to discovering what theaters look like post-pandemic, and you can be sure that we'll be there to find out.