Flix Brewhouse CEO Allan Reagan informed CNBC on Wednesday he prepares for the coronavirus pandemic will cause a continual decrease in theater participation.
In an interview on “Squawk on the Street,” Reagan stated the Texas-based business, which runs 10 dine-in movie theaters and brews its own craft beer, is forecasting 2022 to be a “more normal year” for its company, after Covid-19 vaccinations end up being broadly readily available.
“The total attendance, based on the traditional curve, might be down 15% to 25% on a permanent basis. That’s the way we’re gaming this out permanently,” Reagan stated.
Movie theaters and home entertainment locations normally have actually been hard struck by the pandemic, as screens went dark in the spring throughout the preliminary wave of public-health constraints. But even as theater started to run in some areas, they quickly faced the difficulty of minimal brand-new releases to lure individuals to go to.
“We are now like a kind of a grocery shop that have no food to sell,” Cineworld CEO Mooky Greidinger informed CNBC in October to describe why the moms and dad of Regal Cinemas chose to momentarily shutter its areas in the U.K. and U.S.
Domestic ticket sales were down 80% this year to $2.28 billion, according Comscore information. In 2019, for contrast, ticket sales were $11.4 billion, the second-best overall ever.
Flix Brewhouse, which opened its very first area in 2011, stated incomes in 2020 were down by simply over 90% year over year. All its areas are presently closed, Reagan stated.
The business took advantage of the Paycheck Protection Program previously this year. Now, it will lean on the help allocated in the current $900 billion coronavirus relief plan for independent music locations and theaters. “We’re looking at this funding as the means that enables us to go forward so that we’re paying next August’s rent, not last August’s rent,” Reagan stated.
The velocity of digital streaming throughout the pandemic has some individuals questioning what the long-lasting theater landscape appears like, and Reagan acknowledged it will be modified.
“We’re hoping that the industry, which is a little bit over-screened right now, loses some screens due to natural attrition. I don’t think anybody is going to be head over heels building new theaters right now,” stated Reagan. “We also need to broaden our entertainment offerings beyond just the film product.”
However, he competed individuals’s desire to experience in-person home entertainment, whether it be a motion picture or an option, will stay. Flix Brewhouse, with its in-theater food and beer offerings, has a chance to stand apart, Reagan stated.
“We’re actually a brew pub, a gastropub, that shows movies … and we think we’ve got a pretty good shot at surviving,” Reagan stated. “You can get any sporting event that you want in your living room all weekend long, but we still have sports bars. We still have Buffalo Wild Wings and all kinds of sports-bar concepts for the same reason: people want to get out and they want to have somebody take care of them. They want a little bit of entertainment.”