Streaming May Usher Final Scene for Movie Theaters

It might be time to roll the credits

Key Takeaways

  • Industry experts predict the collapse of movie theaters.
  • Global time spent viewing streaming content increased an average 56 percent in April, May, and June.
  • 74 percent of Ernst & Young (EY) survey respondents say they use streaming services.
People watching a movie in their home theater
rubberball / Getty Images

Ben Smith, media columnist for the New York Times, penned a piece this week entitled, “The Week Old Hollywood Finally, Actually Died.” 

Well, Hollywood hasn’t died yet, but a five-month spell of Americans trapped in their living rooms has put the movie theater industry on life support. The pandemic is turning the entertainment business upside down and changing the dynamics of how audiences view content.

“I think the trend [for] streaming will continue because the theaters are never going to recover,” said UCLA’s Howard Suber in a phone interview. “In the future, there will be much less of an ability to go to theaters.”

Expert Doubts

The shuttering of movie houses has been a boon for streaming services like Netflix, Amazon Prime Video, Hulu, and Disney+. According to Conviva, a streaming media intelligence and analytics firm, streaming services collectively saw a 63 percent increase in time spent viewing from the second quarter of 2019 to the second quarter of 2020.

Suber said that he believes the theater industry is playing out a death scene. He believes advancements in home digital screens and sound systems have closed the gap for home entertainment versus movie theater quality.

Using remote with feet in front of flat screen
Steven Puetzer / Getty Images

“It used to be that the image and sound at the theater were so much better than any home—that’s simply not true anymore,” he said. The quality of viewing a 60-inch screen in your living room is now comparable to watching on an 80-foot screen at the theater.

Bill Demas, CEO of Conviva, is equally skeptical about the survival of movie theaters. He told Lifewire in a phone interview that he thinks restrictions related to the pandemic will be with us for at least another year, and that audiences are developing new viewing habits.

“There’s going to be much more remote work. I don’t see a world where everyone returns back to working five days a week. Streaming is now starting earlier in the day,” he said. 

Consequently, Demas doesn’t think audiences will go back to theaters at the rate they did before the pandemic.

“We are seeing direct releases to ... streaming right now. Given that theaters likely can’t broadly open again for another year, I think new habits are going to be formed,” he said. “I don’t necessarily think movie theaters are going to go away, but I think the option of seeing first-run releases out of your home will be something that is here to stay.”

Midsection of friends sharing popcorn while sitting in theater
Klaus Vedfelt / Getty Images

The Numbers Don’t Add Up 

The cold, hard statistics are not promising for theaters:

  • A recent study found consumers are spending 33 hours per week on internet-based activities in the home, while 48 percent have increased internet-connected use during the pandemic.
  • 74 percent say they now use streaming services to complement their TV watching, and 56 percent say they get more value from streaming services than from broadcast or cable television.

John Harrison, sector leader for the company that commissioned the survey, Ernst & Young, said the pandemic is accelerating and amplifying structural changes in the industry that were already in motion.

“Ultimately, the consumer is in control and the industry’s players will need to pivot to deliver on these new expectations,” Harrison told Lifewire in an email.

As the pandemic stretches on and audiences continue to shelter-in-place, the death watch on the movie theater industry continues. The question remains: will the pandemic roll the final credits for the theater industry? Will we ever go back to the way things were? Chances are, if experts are correct, we probably won’t.