The year of 2020 was not kind to a large portion of the economy, but it proved especially apocalyptic for the movie theater industry.  With the out of control spread of the COVID-19 pandemic across the world, the theater industry had no choice but to shut it’s doors in order to mitigate any further spread.  Likewise, Hollywood had to reshuffle it’s entire calendar an either push back all their big releases, or go straight to streaming, which further put pressure on the theatrical market that was left with few options for it’s survival.  Nearly a year after the shutdowns began, the theatrical market has yet to settle and begin the long road to recovery.  Some areas of the world are returning to business as normal, but in the largest theatrical market in the world (North America), the pandemic still is causing mayhem, and potentially could even lead to a collapse of the theatrical industry itself.  There has been a lifeline handed out by the government to assist smaller, independent theaters through the stimulus, and it will indeed help ensure that they can survive this storm.  But, the ones left out of the stimulus package were the big theater chains that are publicly traded, and their survival is crucial to the actual survival of the theatrical market, because they are the ones that account for the most box office grosses that Hollywood banks their investments on.  The fact that they are on their own in search for a way to survive the pandemic gives very little doubt in the likelihood of a full recovery for the pandemic ravaged theater industry, and this is very much reflected in the economic woes of it’s largest player in the market; AMC Theaters.  Starting off this new year, no matter what they’ve managed to do thus far, it looked like AMC was almost certainly going to face bankruptcy.  But like many of the movies that they’ve screened for audiences over the years, their story suddenly found itself in a late hour plot twist.

The sudden reversal of fortune came with this week’s chaotic stock trading upheaval.  Fueled by the Reddit community WallStreetBets, several nearly bankrupt stock listings saw their value skyrocket, with a sudden influx of share buying from the Reddit users.  Done mostly as a means of gaming the system to force a significant loss of revenue for hedge funds that have been aggressively short selling stocks in order to ensure that they fail so they could profit over their collapse, the WallStreetBets community disrupted the power dynamic of Wall Street while at the same time giving a temporary boost to stocks that were being pressured to fail by these vulture-like hedge funds.  And one of those stocks just so happened to be AMC Entertainment.  Up until this week, AMC’s stock value had dipped down to nearly $3 a share, which is as close to rock bottom as you could get for a company once valued much higher during the peak of the theater business.  Prior to this week’s unexpected turns in the stock market, AMC was facing almost certain bankruptcy, as their capital was almost going to run out by the end of the month.  In a last ditch effort to save the company, CEO Adam Aron pushed for a large sale of stock to the private equity firm Silver Lake Partners, whose much larger investment in the company gives them further leverage over the future prospects of the company.  It’s a risky effort, but Aron was left with little other options left.  And then, suddenly, thanks to Reddit, the stock saw a giant spike in value within a single day of trading, rising to nearly $20 a share.  After buying all that stock so cheap earlier, Silver Lake Partners now suddenly saw a 300% increase on their investment, and began to sell back their shares at a massive profit.  Of course, none of this Reddit fueled investment is going to last long, but it was enough to give AMC a short term boost that helps to settle some of it’s massive debt and remain solvent for a few more months, and possibly even the rest of the year.

So, the good news for AMC is that because of this sudden and unexpected turn of events, they are no longer in immediate danger of bankruptcy.  However, they are not out of the woods yet, because their long term fortunes are still going to be determined by the recovery of the theatrical industry in general.  The fact remains, normal is still a long ways off, with Hollywood still unsure about the prospects of box office totals ever returning to it’s record breaking highs of the past.  A lot has changed in the past year, with so many compromises having to be made just to keep theaters from going under in the wake of the pandemic.  There was the controversial shortened window deal made between AMC and Universal Pictures last year, which allowed for the studio to start streaming their movies after a short 3 week theatrical run.  It was an unfortunate shift in the power dynamic favoring the studios, but it was also essential for the survival of the theaters that were open, since Universal’s movies were often the only ones driving any significant box office grosses over the last year, like with Dreamworks’ The Croods: A New Age (2020).  And then came the highly controversial decision by Warner Brothers that they were going to do same day releases of their movies in both theaters and on their streaming service HBO Max; a move they decided on without consulting the theaters themselves first.  It’s been moves like these that the theater industry always feared as streaming became a stronger competitor over the last couple years.  And that’s a genie that can’t be put back into a bottle.  The sad reality of 2020 for the theatrical market is that they’ve lost ground to a competitor that they are likely never going to get back.  The only way to move forward now for the theaters is to convince both audiences and the studios that the best option to watch a new movie is on a big screen with a large gathering of people.  And in a pandemic driven shift away from social gatherings in general and more towards getting people to stay home, that proposition is going to be a hard sell.

Indeed, AMC theaters was in hot water long before the pandemic took hold, and it was largely due to their unsustainable desire to become the industry leader.  The company oddly enough started small over a century ago.  The Dubinsky brothers of Kansas City, Missouri began their company with the purchase of the Regent Theater in the downtown district in 1920, where they would stage melodramas for the community.  As the newly emerging artform of motion pictures began to take the world by storm, the Dubinskys, now called Durwoods, shifted to showing movies at the Regent to great success.  Over the years, the Durwood family began to buy more theaters in the greater Kansas City area, and with the Paramount Decision in the 1950’s, the Durwood chain began to grow further with the competition from Hollywood studios being taken out of theater ownership.  By the sixties, the Durwood family chain had spread across all of Missouri, Kansas, and several other Midwestern states.  By this time they rebranded to American Multi-Cinema (AMC) and began their next big contribution to the theatrical industry, which was the mulit-plex model.  Opening the first multiple screen venue in North America, AMC sparked a revolution in the way people went out to the movies.  The multiplex brought movies out of downtown and into the suburbs, with malls and mini malls becoming the new homes for cinema.  And with that steady growth over time, AMC withstood the ups and downs of the industry, as different chains came and went, but could never top AMC’s dominance.  By the turn of the millennium, the theatrical market was defined mostly by the big three: AMC, Tennessee-based Regal, and Texas-based Cinemark.  Nearly 80% of all movie screens in America are run by these three competitors alone.  A boon for the theaters on top, but a negative aspect for diversity within the business as a whole.

And when there is little competition at the top of the market, it creates a lot more havoc once that market becomes destabilized, like what we’ve witnessed over the last year through the pandemic.  A large reason why AMC was in such a dire situation is because a large part of their finances became tied up in mounting debt.  As the company began to go international, thanks to backing from China based mega-corporation Wanda Group, they had to amass a lot of capital in order to expand, remodel or build entirely new theaters in order to grow their market reach.  Now, it’s not unusual for companies to function while holding onto a great amount of debt; Netflix for instance has operated entirely while carrying billions of dollars in debt for almost it’s entire period of existence.  The only thing is, in order to operate while in debt, you’ve got to prove to yur creditors that you remain profitable in the long run.  It’s a good thing when your company sees sustained growth over time, but it can be disastrous when the market suddenly changes, and there is no hope of recovery.  That is the position that AMC suddenly found itself in last year, and it could not have come at a worse time for them.  In addition to their expansion, the company was also investing heavily in a video rental service of it’s own, as well as a membership plan similar to MoviePass.  Both could prove beneficial to the company, but required a large upfront investment in order to lay the groundwork.  Once the pandemic cut off their box office and concessions sales, AMC was left with no other revenue stream to pay for these expensive new services that they were hoping to sustain with the profits from their theaters.  So, even before the pandemic hit, AMC had already put themselves in a rocky position that left them perilously close to collapse.  And it was all driven by a desire to grow their business at a time when the cracks were already starting to show in the dam.  All it took was a sudden pandemic to make the deluge happen.

And AMC’s woes are not just exclusive to their own company; it is industry wide to varying degrees.  Regal, the number two theater chain, made the unprecedented move of just closing their entire chain for the time being in order to save on finances for the rest of 2020.  Cinemark, is also financially struggling, but not at the same level as they hold much lower debt than their competitors.  And the smaller chains and independent theaters were also on the brink of closing before the pandemic stimulus package was passed to provide relief.  And there are many theaters that were sadly too far gone, and closed for good in the last year.  There is no doubt that the theatrical industry is going to look far different in the months and years ahead; diminished and likely to be contracted even more.  They’ve even given up much of their leverage in the business just so that they could survive another day.  Even with the lifelines extended (miraculously in the case of AMC), we’re likely going to see the closure of many theaters still in the coming year.  I don’t really see AMC holding onto as many of their locations that they held pre-pandemic.  In my local area in the San Fernando Valley, AMC has no less than 4 locations within a five mile radius of my apartment, and that’s even with competition from Regal and Cinemark.  Downtown Burbank alone is home to 3 AMC theater properties, with 30 total screens.  Now, Burbank is a busy enough market that they can sustain 3 separate theaters, but in other communities, that would be overkill.  In order to raise further capital, AMC and other big chains may have to look at either selling off their properties, closing them, or maybe even breaking their company up altogether into smaller blocks.

The hard truth is that the long term survival of AMC and other movie theaters is dependent on the confidence that Hollywood is going to have to have with them.  And that is all dependent on whether or not audiences do return back to the numbers that were seen pre-pandemic.  I highly doubt that we are going to get back to normal any time in 2021.  The state of the industry may still have to depend on these special measures and hybrid releases in order to generate any box office this year.  There are some pleasing signs of commitment from big studios like Disney, Paramount, and Sony towards still premiering their movies on the big screen.  But, those same studios are still hedging their bets and that has resulted in them further delaying the releases of their movies towards the back end of the year.  Disney for one seems to be favoring the hybrid model for now, as their latest animated feature Raya and the Last Dragon (2021) is still marked for a March release on both Disney+ and in theaters, though the premium access pay wall does at least give theaters a competitive break.  It remains to be seen if this is only temporary or just ends up becoming the new normal.  We’ll know more when Disney decides what to do with their big Marvel tentpole Black Widow (2021), which was originally slated for last summer.  The hard truth is that with a lot of people staying home during this pandemic, they became a lot more comfortable consuming media from the comforts of their own living room.  Movie theaters need to convince the public that they are the ideal place to watch movies again, and that is going to be hard as a lot of people have turned away from theaters for a long time.  A lot of people’s pet peeves about going out to the movies (high ticket prices, disruptive patrons, lack of sanitation) just make the stay at home option all that much more appealing.  But, there is a case for the communal experience being a part of the entertainment, like the experience of watching a audience pleasing Marvel movie that makes the crowd cheer and applause, or the fact that some movies are just too big to be fully appreciated even on the largest of TV screens.  It’s that case that needs to be made by the theatrical industry, and hopefully by seeing the near collapse of the industry over the last year, movie theaters are going to be far more focused on showing why we need the movies now more than ever.

So, what we saw this week on Wall Street was much less a new lease on life for the ailing AMC and more of a stay of execution.  Reddit users’ crusade of taking down predatory hedge fund short sellers by investing in AMC gives the theater chain some much needed breathing room, but what it does now is going to be crucial for it’s long term survival.  They need to convince audiences to come back and believe that the theaters are the best home for the movies once again.  The unfortunate thing is that the pandemic entrenched so many of us with only one option to watch our movies in the last year, and that’s a foothold for streaming that they are likely going to hold onto for quite a long time.  And that’s a dire prospect for movie theaters across the board.  Just in order to survive the year, movie theaters had to cut compromises that they otherwise would never have done before, and while it did keep some of them afloat for a while, it also ceded more ground to streaming in the process.  At the same time, particularly in the case of the big three chains, it is a case of turnaround.  They turned their nose up at Netflix for years, refusing to screen their movies in theaters because of Netflix’s desire for a short theatrical window before premiering on their service.  But, as the pandemic raged, AMC relented and granted such a deal with Universal just so they could survive the year.  One thing that could be a plus is that now Netflix can indeed screen their movies in the big chains, and Netflix has indicated that they still want to.  Like I said before, we have only begun to see the change within the industry happen, and it’s going to change the way we view what it means to be box office hit under this new dynamic.  For AMC, I’m sure that this last year is not at all how they wanted to celebrate their centennial anniversary, but it’s something that was well out of their control.  The crazy thing we learned this week is that even their good fortune was completely out of their control as well.  I hope that AMC’s benefit from these Wall Street shenanigans, as short-lived as they may be, does spur on a renewed commitment to revitalizing the theatrical industry and making it better and more sustainable.  It’s a crazy plot twist, but hopefully it’s one that does open a new, and better chapter for the story of AMC theaters and the cinematic experience in general.

I’ve often written on this blog about the first couple phase of a film’s life, namely the creation phase of a movie and also the presentation phase.  But there’s one other phase of a movie’s life that I haven’t explored as much and that the final phase; home entertainment.  Sure, streaming has been discussed much lately and that falls under the umbrella of home entertainment, but what I want to talk about here is the unique culture that has arisen around the market of physical media, and how that has evolved over the years.  Movie aficionados like myself have our preferred ways of consuming entertainment, and it often is reflected in the ways that we also collect movies once they are available to purchase.  Home video started off as a niche market to begin with, but over time grew into one of the largest segments of film distribution within the industry.  Now with the rise of streaming, the home entertainment market has changed once again and it has in many ways diminished physical media as an essential part of the life cycle of movies.  But, that doesn’t mean that physical media has disappeared all together.  Instead, the home video market has shifted more into a specialty mode, with physical media carrying more of a prestige than it once did, and as a result, a higher value as well.  But what makes physical media stand out when compared to what someone might find on Netflix or Amazon for instance?  What makes buying a movie take on more of a value than either renting or streaming it?  In many cases, it not the movie itself that matters, but the way that it is packaged and presented that gives it more value in the physical media market.  Movie collections often become just as beloved a part of someone’s personal belongings than anything else.  In many ways, it’s something that connects us closer to the movies than any other form of media consumption that is offered up by Hollywood.

For me personally, my journey as a film buff has been largely tied to the way that I collect movies.  It goes all the way back to my childhood even.  Instead of asking for video games or sports equipment as gifts from my parents like my siblings would on birthdays and Christmas, I always wanted movies on video tape to add to my growing collection.  I grew up in the 80’s, when VHS cassettes were coming into their own as the primary form of physical media for home entertainment.  And the company that took advantage the most out of this growing market in the 1980’s was Walt Disney Pictures, which naturally I was the target audience for.  I remember receiving Lady and the Tramp (1955) as my first movie on video tape when I was 5 years old, and it left an immediate impact on me.  In the years after, Disney began releasing their back catalog of titles, and even began using their new Home Video label to bring their brand new classic films, like The Little Mermaid (1989), to a home audience.  As I collected more movies, I began to self teach myself about the history of the Disney company, and how every movie had a canonical place within the timeline of the studio.   This was largely due to the fact that every box labeled the movies in the chronological order that they fit within the Disney canon.  By the time I had reached high school, I had every Disney movie on VHS cassette, from Snow White and the Seven Dwarves (1937) all the way up to Hercules (1997), which marked 35 movies in total.  But, what started as a childhood collection for me extended beyond just wanting to have each one of those movies as a part of my collection.  In retrospect, I see those movies as the key to helping me deep dive into the history of film itself, through the lens of one studio.  By knowing everything there is to know about the body of work of a single studio, it allowed me to see the incredible mark that cinema leaves in general, and it sparked my interest to explore beyond just what Disney ended up making and look at the history of film as a whole.

Apart from the entertainment value that I would get from the movies I owned, I also have realized over the years how much the aesthetic of physical media matters as well.  In many cases, a well packaged movie plays just as important a role in selling a movie as anything else.  One of the things that I liked best about the Disney movie collection on VHS was the way that they were packaged.  For the most part throughout the history of VHS cassettes, the majority of movies that were released by the major studios packaged their films in flimsy, cardboard sleeves with artwork printed on the front, back and spines.  Disney, however, opted to package their films inside insulated, plastic clam shells, which to a young collector like me made them feel a little bit more special than the other movies for sale.  And when I had them all on my shelf at home, they often looked to me like books in a library, with each title specially designed to stand out.  Aesthetics mean a lot to collectors no matter what the item may be, and the best producers of home video packages were well aware of how each of their title would look in the consumer’s home.  By the end of the VHS era, box sets had become a niche market that had come into it’s own, with movie fans willing to pay the extra little bit to have a movie on their shelf that not only was important to them, but could even stand out as a work of art on it’s own.  One other thing that I always found interesting in that era, which in turn also helped me to expand my interest in film, was the aura of the double cassette boxes.  These were usually made for movies that were so long, that they had to be split up into two cassettes, which to me made them feel even more special.  In that time, it was movies like The Ten Commmandments (1956), Ben-Hur (1959), Dances With Wolves (1990), Braveheart (1995) and Titanic (1997) that were given this treatment, and the fascination that I had with movies that were too big for one tape became a big part of what pushed me into exploring beyond just what I knew about films from Disney.  If movies weren’t packaged the way they were like they had been in the VHS era, I wonder if I would’ve still gone down the road of film fandom that I ultimately did.

Things did change in the turn of the millennium, when VHS gave way to a new form of home entertainment; DVD.  Instead of cassette film, DVD’s encoded movies onto compact discs, thereby opening the world of cinema up to the digital age.  The same technology had been used for years prior on the laser discs, but DVDs were more economical to make and own and fit much easier on a bookshelf.  The picture quality also put VHS to shame, which of course led to a significant downturn for VHS production.  But what may have been the most significant contribution of the DVD era was the implementation of bonus features as part of the package.  Another carryover of the laser disc format, bonus features reached a new level of popularity with the rise of DVD.  Ranging from making of material to alternate audio tracks and even alternate cuts of the movie, DVD bonus features really raised the overall value of the movie that a person was purchasing.  And often the success level of a movie on DVD could be determined by the amount of bonus features that it offered as a part of the set.  This also led to the first instances of people buying a movie in a new format that they already owned in another.  I certainly am guilty of that many times over now.  I have probably purchased the movie The Lion King (1994) five times now across four different formats; VHS, DVD, Blu-ray (twice), and now 4K.  And why is that?  For me, whenever a new special edition of a movie is released on home video, I weigh my choice of purchasing on whether it offers anything more that the other editions did not have.  A lot of films don’t do this, and usually I’ll find that I make one lifetime purchase with said films when they become available.  But there are certain offers on new re-issues that I can’t pass up and I’ll pay that money again, even though I have owned the movie before.  Disney, the clever marketers that they are, have their so-called “Disney Vault” release plan, where their movies stay in circulation for a short time, then go back into the “vault” and out of distribution, thereby driving more demand for the film, which they’ll then re-release again in a big new, specialty package.  Sure it’s market manipulation, but it works, and it’s gotten me every time.

But there is one thing that I as a consumer really found myself valuing with the introduction of bonus features on the DVD format, and that was the in depth making of material that were found on certain special editions.  Not only did they spark my interest as a film history buff, but they even inspired me to want to work in the world of filmmaking itself.  Perhaps no other film release on the DVD format left a bigger impact on me as an aspiring filmmaker than the Extended Editions of the Lord of the Rings trilogy.  Filmmaker Peter Jackson did the extraordinary thing of having cameras roll behind the scenes the entire time while he was putting together his epic film trilogy.  He invited behind the scenes documentarian Michael Pellerin to document every level of production, from the script phase to the final picture lock, and the whole complete wealth of material ends up eclipsing the movies themselves in length.  In keeping with the Tolkein theme, the collection of documentaries that Pellerin and his team compiled together are known as the Appendices on the special edition, and many film collectors will tell you that the entire package feels like having a film school master class in a box.  Peter Jackson would continue to pull back the curtain and reveal all the tricks of the trade in his follow up movies King Kong (2005) and The Hobbit trilogy in what he described as Production Diaries, and it could be said that an entire generation of filmmakers were inspired solely because of the documentaries on these DVD sets.  Even aesthetically they were pleasing to the eye, emulating volumes of books much like the ones the movies were based on.  Peter Jackson and Michael Pellerin certainly didn’t invent the DVD bonus feature, but they raised the bar high for the decade that followed, and as a result, the DVD era saw a flourishing of in depth making of material as a necessary element in home entertainment.

But, for many home video collectors, quality can sometimes be valued over quantity when it comes to all the bells and whistles.  One label in particular has made it their mission statement to deliver movies as a prestige product above everything else, and it’s one that I’ve talked about so much on this site that I devote an entire series to them; the Criterion Collection.  Criterion not only puts a great amount of work into presenting the movie itself in the highest possible quality, but it makes the package you buy it in just as much of a prize in itself.  The Criterion Collection caters to the film collector specifically, with the aesthetic of the box art given it’s own special consideration, knowing full well that the person who is buying a title in their collection likely owns a few more of their titles as well, so they’ve got to make it feel worthy of the label.  Each Criterion title maintains that aesthetic integrity from the box art all the way to the disc menu, and that’s part of the appeal of the Collection to most film aficionados.  There is a prestige to their presentation that you don’t find from most other publishers.  This includes a booklet found beside the discs that includes scholarly essays that gives the consumer a richer view of the movie that they have just purchased.  The bonus features from Criterion, many of them made in house, also illustrate the “quality over quantity” idea behind prestige entertainment.  Special Editions straight from the studio often package as many EPK materials as they can onto the disc and believe that it fulfills the criteria of a “special edition.”  But Criterion opts to in depth analysis into a film’s making and it’s themes on a larger sense.  Often, the total number of features may be less than the studio label, but the quality will be much more enriching.  When a movie receives the Criterion treatment, it’s seen as a badge of honor, and that is what has helped to make Criterion a valuable brand in the home distribution market.  And that special level of prestige is likewise what makes it less embarrassing for film nerds like me having to rebuy a movie that we already own.

But, like a lot of other aspects about the film industry, home video collecting is changing in the wake of the rise of streaming.  Indeed, home video sales have plummeted over the last decade since the heydays in the 2000’s.  And that’s in large part due to streaming taking over so much of what was the backbone of the home entertainment business.  Home video rental houses, like Blockbuster, are pretty much extinct now, and movies are readily accessible to buy, rent, and stream digitally from the comfort of home.  In the aftermath of the end of the rental market, and the declining sales of disc based media, we are starting to see how little of a market movie collecting really is.  When people were buying up movies by the dozens from their local video store, it was because there was no other option available for movie ownership.  Now that streaming has made it easier to access movies from the safety of home, more and more people are drifting to the option that is far more convenient and adds less clutter to their book shelves.  What’s left are the die hard movie collectors that want to have that physical movie to hold in their hands, and it’s a market that is likely going to grow smaller in the years to come.  As a result, the physical media market is changing to appeal to the niche market once again.  Movie studios are keeping their inventories lower on new releases due to the smaller demand, and in the process, the movies themselves are becoming a more elusive commodity.  Labels like Criterion are still thriving, because they’ve always operated this way, but the major studio labels are having to rethink what they should invest in when it comes to physical media.  Extra special editions, like those that include not just the movies , but special collectibles as well are becoming more prevalent, but also at the same time, more rare and expensive.  The Lord of the Rings trilogy even put out an $800 special edition set that included the Hobbit movies, all packaged in special leather bound boxes and stacked on a special, hand carved wooden shelf.  It’s a high price for a movie set that most people already have, but for what it is offering, it becomes less about the movies themselves and more about the exclusiveness of the package itself.  It may seem outlandish, but it could also mean the future of physical media in the long run.

It’s hard to know at this moment what physical media in home entertainment will look like a decade from now, but there is no doubt that the market is changing.  We may not see the likes of the incredible Lord of the Rings Extended Editions box sets again, but I also believe that very few people are ever going to through their original copies away either.  There’s just something to be said about a complete, aesthetically pleasing special edition package of a beloved movie that holds a special place in the hearts of film lovers.  It may be the end of a movie’s life cycle, but it’s also the phase that connects a movie to it’s fan more than any other.  When you hold the movie in your hands, it means a whole lot more to you; it’s yours to watch forever.  The Criterion Collection understands this, and they cater to what their audience wants by making each film feel special.  They have even remarkably convinced streamers of this as well, as Criterion has become the physical media home for films from Netflix, like Roma (2018), Marriage Story (2019) and The Irishman (2019).  If Netflix can be convinced to put their high profile, exclusive movies on physical media, then there is still hope.  I for one am an undeterred film collector, still buying some of the same movies over and over again.  I’m particularly a completionist with Disney movies, having own each canonical film on VHS, DVD, and Blu-ray, with 4K well on the way next.  And yes, they are all organized in chronological order, just like I did with my VHS tapes back when I was a child, because that’s who I am.  Even still, if a movie catches my eye in the sadly shrinking video sections at Target and Best Buy, I will make it a part of my collection that is now numbering in the hundreds.  I consume digital media as well without complaint, but a part of me will always desire a hard copy above all else.  It may be long past it’s glory days of filled to the brim special editions, but physical media has found a devoted fanbase that continues to support it, and it’s one that I hope continues to hold these movies up to a high standard, with quality standing above all else.