Those of us above a certain age remember going to the arcade or the pizza shop, dropping a quarter or two in the machine and staring at a blip on a low-definition screen.
Video arcades still exist, and there’s always a place for retro games. But advances in processing, graphics and broadband connectivity conspired to push a significant portion of gaming activity into the home. Besides, who has a pocket full of quarters?
This week, Regal Cinemas shut down 500 U.S. theaters, including one in St. Joseph, as the coronavirus continues to hammer the movie industry. The announcement raises questions about whether movie theaters will share the same fate as the video arcade.
The problem is twofold: customers aren’t comfortable crowding into a dark theater and film studios are delaying the blockbuster releases that would get those movie fans in the door. If you believe in happy endings, maybe this is a temporary phenomenon. A coronavirus vaccine is unveiled, the new James Bond movie is released and we all head to the megaplex and buy a $10 bag of popcorn.
That’s the best-case scenario. But what if the virus permanently changes consumer behaviors and speeds up a transformation similar to what the video game industry experienced? In this subplot, Netflix is to the movie theater what the Xbox was for the arcade.
The answer to this question is critical, not just for the movie industry but for any type of business that relies on retail spending and foot traffic, like shopping malls and brick-and-mortar stores. Retail bankruptcies, store closings and liquidations reached a record level for the first half of 2020, according to a report from the professional-services firm BDO USA.
Malls and retailers have struggled for years, but the pandemic added fuel to the fire that Amazon started. Bankruptcies, often for restructuring rather than liquidation, include some of the most recognized national names, like Neiman Marcus Group and J.C. Penney.
The future of movies and retail is of more than academic importance. They offer a tax base, especially for local governments that rely on sales tax, and provide a community gathering place. We could live without a $10 bag of popcorn, but something is lost if people grow accustomed to only shopping on their phones or streaming the latest release from the couch. That’s not to mention the empty retail stores that seem to litter the Belt Highway.
Regal Cinemas did what the company had to do in a challenging environment. Time will tell whether the coronavirus represents a blip on the screen, sort of like that blinking light on the 1980s-era game, when it comes to the future of the movie theater.