It's only a matter of time before movie theaters are back to normal. That, of course, is according to the industry insiders who have started to see a light at the end of the tunnel. With much of America reopened at least partially now, combined with expectations from the federal government that anyone who wants a vaccination can have it by Independence Day, analysts suggest 2022 will be the year the box office bounces back to pre-COVID numbers.
Over the course of the past few weeks, several Wall Street analysts have been conducting reviews amongst movie-going audiences. According to MKM Partners' Eric Handler, upwards of 57-percent of movie-goers intend on going back to the theater at some point in the immediate future. The numbers, obtained in a new report by Deadline, also suggest just 14-percent of the 1,000 surveyed said they don't plan on going back for quite some time. The remaining 29-percent in the study weren't sure whether or not they would.
One major variable, as the Deadline report says, is the time involved with the vaccination process. While just 46-percent of the people surveyed by Handler said they'd return to cinemas within three months, a staggering 72-percent of respondents said they'd be more comfortable with a six-month timeframe.
Another analyst — Michael Pachter of Wedbush Securities — hypothesizes the fourth quarter box office this year could end up grossing north of $2 billion. The same time period in 2019 ended up making exhibitors $2.9 billion.
“We view our current [fourth-quarter] estimate as conservative, assuming there will be massive pent-up demand for seeing movies with friends or dates out of the home once the public has been largely inoculated,” Pachter writes.
A third analyst Deadline got a hold of — B. Riley's Eric Wold — shares a similar sentiment. While Pachter envisions a 10-percent drop from 2019 Q4 to 2021 Q4, Wold suggests a more optimistic eight-percent drop. Either way, all three suggest the box office will be firing on all cylinders in 2022.
“With the focus of the industry recovery shifted to [the second half of 2021] and 2022, we believe as long as companies have enough liquidity to make it to the fall/winter slate, then balance sheets become a relative non-event vs. moved stocks in the heart of the pandemic last year,” Wold writes. “At this point, we are comfortable that each of the companies in our coverage universe has the appropriate liquidity—especially with the positive moves made by AMC to drive $900 million-plus in additional financing secured since mid-December and the upcoming opportunity to further de-lever the balance sheet.”