Yahoo Finance ArcLight Hollywood May Be Closing, But It’s Not Too Late to Save Other Cinemas
Even after a year of indoor theaters being shuttered in Los Angeles, it’s hard to imagine a future without the ArcLight Hollywood, the tony 15-screen megaplex that countless Angelenos considered their go-to spot to watch movies. The ArcLight was the place that many moviegoers, myself included, imagined celebrating their return to cinemas, especially now that vaccines and under-control COVID case numbers make that seem possible.
So, this week’s announcement by ArcLight owner Pacific Theatres that the company would not be reopening any of its Southern California locations — which account for nearly 300 screens in and around the Los Angeles area — signaled more than a tragedy. It was a sobering reminder to studios and distributors that the venues they rely on to reach audiences can’t hold on much longer.
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Built in 2002 adjacent to the Cinerama Dome (a 1963 historic landmark and reminder of a time when studios and exhibitors worked together to develop a gimmick that would draw audiences away from their TV sets at home), the ArcLight on Sunset Blvd. set the standard for what primo moviegoing might be: a kid-free zone that offered adult audiences with comfortable stadium seating, reserved places and a chance to scope artifacts from the productions themselves in the lobby, like costumes from “Phantom Thread” or a scale-model Grand Budapest Hotel.
At the ArcLight, watching a movie was treated as an event, with personalized introductions by cinephile ushers (or talent, in special cases) and an all-around respect for the in-theater experience that included policies against talking, late arrivals and cell phone use. This reverent, upscale approach made the ArcLight an ideal spot for press screenings and movie premieres, award-season Q&As and word-of-mouth promotions. As such, many Angelenos can’t help but associate their memories of key movies with the location where they saw them.
The notion that Los Angeles could lose this iconic filmgoing destination has already prompted an outpouring of support and distress from celebrities and filmmakers on social media. But the news may not be quite as big a shock to the general public, who’ve witnessed so many beloved establishments — from favorite restaurants to mom-and-pop shops — go under during the pandemic. How were cinema chains supposed to survive such a prolonged period of non-operation, even with some measure of government support to ease the burden?
Optimists hope that another company might step in to acquire either the chain or at least the Hollywood location and operate these venues going forward — and that feels like a fair expectation. After all, while many have been focused on the human health crisis, lockdown measures have facilitated a massive redistribution of assets, as online retailers sucked business away from brick-and-mortar stores and financially-sound players saw opportunity to gobble up (or snuff out) the competition.
In the film world, streamers have been the big beneficiary of stay-at-home mandates. Some analysts have floated the idea that Netflix could acquire the ArcLight, the way it did the American Cinematheque (just down the street) and New York’s Paris Theater, although I see this as a long shot. Netflix is not in the theatrical exhibition business, and leasing a few well-placed single-screen movie palaces better serves the company’s agenda. (If the Academy permanently waives the requirement that films screen theatrically in order to qualify for Oscars, I predict that Netflix could shed the few cinemas has taken on.)
Pacific Theatres is hardly alone in its post-pandemic distress. In 2020, AMC appeared to be teetering on the brink of bankruptcy before coming up with $917 million in fresh financing, while the Alamo Drafthouse operation (a nationwide dinner-and-a-movie chain that finally opened its downtown L.A. location in summer 2019) declared Chapter 11 last month.
The message is clear: Cinemas can’t survive without audiences. More importantly, they can’t survive without movies.
It’s encouraging that “Godzilla vs. Kong” could still muster a monster opening (by pandemic standards, at least), but by making the film available to HBO Max subscribers at the same time, Warner Bros. essentially created a kind of direct competition for their most valuable allies: the exhibitors. The theatrical model has always depended on exclusivity to drive people to see movies on the big screen, but for the rest of 2021 (at least), a few key studios have committed to a theatrical work-around, streaming new releases directly to audiences at home.
For obvious reasons, no studio wants to release a high-dollar blockbuster in an ecosystem where it will gross just a fraction of what it might have earned pre-pandemic. That explains why they have delayed so many of their tentpoles, from James Bond’s “No Time to Die” to Steven Spielberg’s “West Side Story.” These movies can’t break even without a minimum threshold of screens playing at a certain capacity. Disney’s “The Lion King” remake played on 4,802 screens, which suggests the sheer volume of cinemas needed to turn these super-expensive productions into hits. (And let’s not forget that the ArcLight, which has also been such a champion to indie and foreign films, lent all 15 of its screens — and the Dome — to “Black Panther” to help set that film’s record opening.)
But this is where Hollywood hits a catch-22: Without thousands of screens, studios can’t make their budgets back. And without a steady calendar of compelling new studio movies, theaters won’t be able to survive, and those screens could disappear.
We’ve already seen how this problem plays out in France and other international markets where, for a short time at least, COVID cases dipped enough for cinemas to reopen. That was a disaster for Christopher Nolan’s “Tenet,” which was never open widely enough to earn what Warner Bros. hoped. Meanwhile, deprived of a full suite of starry Hollywood movies, theaters couldn’t attract audiences en masse and were obliged to close down again until they had something more compelling to offer.
Megaplexes can’t get by on revival screenings of “The Goonies” and other nostalgia classics, and smaller titles (like nearly all of this year’s Oscar nominees) may be respectable, but they lack the mass appeal to fill seats.
At some point, if studios want to remain in the business of theatrical releases, they’re going to need to risk a loss, or else rethink the model. Instead of shortening windows (the period of exclusivity a film spends in theaters, or on PVOD or another premium platform, before being made widely available to at-home consumers), why not make them longer, allowing a film like “Tenet” to play in theaters — and only in theaters — for a full year before moving it to home video and digital platforms?
Even with vaccines making group activities possible again, the in-theater moviegoing experience will have to change. The good news: The film industry has faced big challenges before, and it can survive, so long as it’s willing to adapt. Someone will step in and save the Cinerama Dome, whose historical significance and landmark status makes it too precious to lose . The fate of the other venues is more precarious.
Southern California is littered with empty theaters as it is. Tour downtown L.A., and you can still see the marquees of so many fading movie palaces, including the Orpheum, the Palace and the State. These façades are relics of an era when Americans went to the movies multiple times a week and theaters could attract 3,000 or more patrons per show. A few blocks away, the Alamo Drafthouse has 12 screens, the largest of which seats 63 patrons — a clear sign of how moviegoing habits have changed.
To me, the ArcLight represents the pinnacle of what moviegoing could be at the outset of the 21st century, and I would love to see it come back. That said, cinemas will clearly need to evolve in reaction to the pandemic (and in anticipation of any other surprises the future might hold). But they can’t do that without the support of the studios, who for the moment seem too worried about salvaging their slates to recognize that the exhibitors can’t survive without them.
We don’t go to the ArcLight for the popcorn or the air conditioning. We go for the movies. Maybe Pacific can pull through, or find another party to carry on its legacy. But it’s time to bring back the films, lest we lose more cinemas for good.
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