Analyst Says Theaters May Stay Closed Till Mid-2021
The movie industry was hit hard by the coronavirus and the social distancing guidelines which governments and communities have employed to check its spread. Not only are most films produced using large crews that work together in tight, enclosed spaces, they are also typically enjoyed by equally massive crowds which gather in similar environments.
Although some American theater chains have proposed plans to reopen, others remain silent. With more and more states seeing a surge in infections, a second wave of quarantine also appears to be more likely than ever before. All of these elements combine to create the worst possible scenario for cinemas, which one expert now suggests could remain closed until as late as next summer.
Doug Creutz, an analyst working for multinational investment bank Cowen and an influential player in the field of finance, recently changed his rating on the stock for The Walt Disney Company with this exact thought in mind. His lack of faith in the entertainment business sets an example for other investors, promising some financial trouble for the media conglomerate and its various competitors.
As far as Creutz is concerned, the adverse effect which the pandemic has on Disney’s theme parks, ongoing productions and above all theater distribution channels paints a picture that is disheartening to say the least.
“With the spread of COVID-19 having accelerated in the U.S.,” he told THR, “we expect a prolonged impact.” “We now expect domestic theaters to be largely closed until mid-2021, in part because we don’t think studios will be interested in releasing their largest movies into a capacity-constrained footprint.”
Although Disney managed to score itself a fairly big win with its recently-launched streaming platform, whose recent acquisition of the Broadway musical Hamilton has got the internet under its influence, Creutz couldn’t care less. As long as the company cannot produce new content – which was and remains its greatest strength, especially when compared to powerhouses like Netflix – business isn’t looking too good.