Adam Aron, CEO oftroubled movie theater chain AMC, said that costs for the precautions necessary for reopening their theaters during the current COVID-19 pandemic will be ‘passed onto the consumers’. Aron’s announcement will ultimately mean a rise in the price of theater tickets and food and drinks sold at the concession stand.
As theaters prepare to reopen, extra safety precautions such as frequent sterilization between showings and limited audience capacity means that operating costs will rise while income from audiences will be lower than usual. It’s currently unclear if other chains will follow AMC in charging customers more.
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Prior to the pandemic, AMC was already $4.75 billion in debt at the end of 2019 which swelled to $4.9 billion in April. However, recentlyAMC managed to renegotiate its debt with its holders in order to avoid bankruptcywhich along with not paying its landlords and deferring payments until after the pandemic will allow it to operate through 2021.
During the pandemic AMC also decided to stop showing any Universal films such asFast and Furious 9andJurassic World 3after Universal’s straight to VOD release ofTrolls: World Tourproved successful. But AMC and Universal recently made a deal that the theatrical window for new releases would be cut to just around 17 days instead of the regular 90, so VOD and streaming releases could follow a lot sooner than usual and AMC will take a 20% cut of home media sales. Movie studios are still experimenting with new release models however such the upcomingBill & Ted Face The Musicwhich will be released both in theaters and VOD on the same day.
In any case, the COVID-19 pandemic has been a tough time for all cinema chains due to lack of custom. With many big releases this year either delayed or going straight to VOD, the situation for movie theaters won’t improve overnight but if other chains follow AMC’s lead then it could mean ticket, food and drink prices rising further. Financially, raising ticket prices makes sense. The extra money it takes to keep a theater safe has to come from somewhere, but one has to wonder if it’s wise to give moviegoers yet another reason to stay home.
