Sounds crazy? Amazon bought Whole Foods, given Amazon Prime, this makes more sense.
Given the challenges and uncertain timeline facing theater chains AMC Theatres, Regal, Cinemark, Cineworld Cinemas Ltd, Cineplex, you have to wonder what the future looks for them.
I understand that WarnerMedia’s decision to concurrently make available its 2021 slate on HBO Max won’t help.
While many prefer to watch movies at home, there will always be people who will want the experience of going out. The challenge is in a world where a company is focused on merely being a going concern, it may work; but in a debt-fuelled, revenue-maximization context, those firms will be really challenged as stand-alone entities because their debt was based on a certain level of revenue which is now unlikely. AMC needs to raise a boatload of cash, and then for what? A future where consumers will be further conditioned to stream programming? Will a massively-indebted theater chain really make sense?
Industries evolve, and indeed, same way Apple invested in real estate and that paid off handsomely, some of these pieces of real estate will evolve into other experiences where indeed, it may be less about paying $X to watch a movie (and 2X for popcorn – ha!) and more about buying Microsoft products, book travel experiences from Fosun’s Club Med, or, dare I say, pick up your Amazon shipment?
After all Amazon’s Prime Video is to further grease the underlying eCommerce biz! Indeed Amazon’s been rumored to buy AMC Theatres. But it’s a long shot for them all as they have very little margin to navigate. Debt’s always been the killer of businesses, Covid was just the location/time/weapon of choice.
Microsoft used Covid to shut down its stores, which never came close to matching the magic of Apple’s retail formula. But as it ups the stakes in the console wars, continues to operate in consumer segments, owning a foothold which happens to debut global movie (and gaming) franchises isn’t as crazy as owning stand-alone Microsoft stores sounds.