Movie Theaters Open in Fernandina & Yulee With Pandemic Protocols

One of the last types of businesses to open back up since COVID-19 shut down the economy, two local movie theaters have reopened.

After Long Closure, Cinemas Open

Two local movie theaters in Nassau County, FL opened their doors during the first week of September 2020. While so many different types of businesses have been through hardship due to the virus, movie theaters were closed completely for a long duration, about five months. And they’re trying to make a comeback.

Amelia Island’s B & B Theatres is located in Fernandina Beach at the corner of 14th Street and Lime. The other local area cinema is AMC Classic Yulee 10, at A1A and the Amelia Island Concourse, in the vicinity of the big-box stores on the mainland.

Winning Public Confidence

In the coming months, a critical issue for cinemas is winning the confidence of the public. Will enough people feel safe to go back to the movies? But besides the impact of the pandemic, ground shaking changes are underway in the film distribution and exhibition industry. Thus, the future impact of a combination of factors remains to be seen. (More about new film distribution deals and changes in studio and exhibition law is further below).

These two movie exhibition companies in Nassau County, FL are opposite ends of the spectrum as far as business size. Amelia Island’s cinema is operated by a comparatively smaller theater company, versus the world’s biggest movie chain, AMC. Both have implemented necessary changes to operate in the new normal. They’re in the same boat, trying to stay afloat. And they’re joined by others in the “going out” marketplace across the nation. All the places to go out to eat, drink, or be entertained, with so many live performance venues, restaurants and bars (and their performing talent) trying to survive.

AMC’s Domestic Movie Attendance

Publicly-traded, AMC is required to make financial and performance information available to its shareholders and regulators like the Securities and Exchange Commission.

Domestic movie attendance at AMC’s cinemas reveals the impact of the pandemic on this industry here in the U.S.A.  While AMC, during the fourth quarter of 2019, reported domestic attendance at 62 million, it dropped to 39 million during the first quarter of 2020 with the emergence of the Coronavirus. Then AMC’s domestic movie attendance flatlined at zero during the second quarter of 2020 ended June 30th with movie theaters closed.

New Pandemic Protocols At The Movies

Both local movie theaters in Fernandina and Yulee will operate under new pandemic protocols. There are restrictions on auditorium capacity to allow for social distancing, so this means limiting ticket sales. There no longer will be a “full house” where every seat is taken. Movie goers will be required to wear masks (unless eating or drinking).

According to B & B Theatres, when guests reserve seats purchased online, the surrounding seats become unavailable to ensure at least six feet of space between movie goers (at least two empty seats). Recliner auditorium rows at B & B Theatres are already seven feet apart in auditoriums. Also, movie show times will be “spread out to limit occupancy in common areas and give employees extra time to clean.” B & B Theatres is participating the “Cinema Safe” program (video below).

Multiple Challenges Loom

Besides needing to win the confidence of the public, movie exhibition companies also face additional challenges. Currently, there are fewer new releases in the content pipeline coming out of Hollywood, since the Coronavirus also shut down filming and movie production.

Studios Stall To Release New Films

Plus, in the pandemic environment, some studios are reluctant to release the new movies they do have, opting instead to delay their debut. For some would-be movie goers, there’s less incentive or excitement to go out to the movies. This past week more announcements came about delaying the release dates of anticipated box office draws, such as “Wonder Woman 1984.” The Warner Bros. movie pushed back its release date from October 2, 2020 to Christmas day.

B & B Theatres, 419 Screens (49 Locations)

Founded in 1924, B & B Theatres, a privately-held, family-owned and operated business (the Bills and Bagby families), is based in Missouri. Why did they decide to open a theater on Amelia Island? Like so many local business proprietors and residents, the story sounds familiar. The President and CEO of B & B Theatres had previously visited Amelia Island as a tourist with his wife. They fell in love with this beach town and decided to invest in the community, opening the island theater in March 2017.

Two years ago, long before the pandemic’s impact, Bob Bagby, President & CEO of B & B Theatres, offered his thoughts on what the biggest challenge facing the industry was at that time, in an interview with Box Office Pro:

“Our biggest challenge is that our attendance is based on what kind of movies come out of Hollywood. We can build the biggest and best theater in the nation, but without strong product, we have empty theaters. However, if Hollywood gives us good movies and we give our customers a presentation that is so fantastic that they want to leave their couches, then movie theaters will be around for many years to come.”

SOURCE: Bob Bagby, Pres. & CEO, B & B Theatres (Box Office Pro 9/25/2018)

Besides Amelia Island’s B & B location, the company also has a U.S. presence in seven states. Relatively speaking though, compared to AMC Entertainment, B & B Theatres is a much smaller company with 49 locations and 419 screens (as of July 2020).

AMC (11,000 Screens, 1,000 Locations)

AMC is the largest movie exhibition company in the United States, the largest in Europe, and the largest throughout the world with approximately 1,000 theaters and 11,000 screens across the globe. Founded in Kansas City, AMC is publicly-traded company (NYSE:AMC), in business for about 100 years. Back in 2012, a Chinese conglomerate, Dalian Wanda Group, acquired a majority stake in AMC Entertainment. Wanda paid $2.6 billion for the U.S. movie chain, AMC, but since (in 2018), trimmed down its position.

AMC Classic Yulee 10

The message on AMC’s website (Yulee location), announced in late August: “Great news! This theatre is planned to reopen on September 3, 2020 with new AMC Safe & Clean policies, designed with you in mind…Auditoriums are at 40% capacity or less to allow for social distancing. Masks are required before, during and after the movie unless you are enjoying food and drinks.”

World’s Largest Movie Chain

AMC Entertainment Holdings grew to become the biggest in the industry worldwide by acquiring smaller theater chains. This includes their purchase of competitor, Carmike Cinemas, paying $1.1 billion for the cinema chain. Locally, Carmike decided to leave Amelia Island’s Fernandina Beach location in 2014, shuttering the theater. They relocated to Yulee, building a bigger venue, a 10-screen cinema (opened in February 2015, initially called Carmike’s “Coastal Cinema 10”). Since then, the Yulee movie cinema became “AMC Classic Yulee 10.

Potential Chapter 11 Bankruptcy?

AMC had taken on a lot of debt and was struggling before the pandemic. After AMC filed a preliminary earning report with the SEC in early June 2020, numerous financial news stories emerged. In the SEC filing, AMC indicated “substantial doubt exists about our ability to continue as a going concern.” This sparked anticipation that a potential Chapter 11 bankruptcy filing to restructure debt might be in its future. Other news stories had also circulated earlier in 2020 that Amazon was talking to AMC about a possible acquisition.

AMC’s CEO Talks About Movie Biz

More recently, however, on September 10, 2020, AMC’s CEO, Adam Aron, appeared on CNBC’s Squawk Box. During this interview on the financial news network, the CEO offered an optimistic message about the outlook for the movie exhibition industry. “As you look ahead to 2021 we see recovery.”

Aron said he was “so encouraged” that a million people had gone out to the movies at AMC during the recent 3-week period before the interview. AMC had opened 100 of their cinemas during August 2020. But their intention was to have 75% of their cinemas open by the weekend of 9/12/2020.

Can Movie Theaters Survive With Limited Capacity?

According to AMC’s CEO, limited capacity restrictions to implement social distancing at AMC’s movie theaters “is not nearly the problem you would think.” Some may find the CEO’s explanation interesting, below:

“We’re not an airline or Broadway theater that traditionally runs full. We, in the movie theater business, we’re more a church built for Easter Sunday. Last year AMC, which sold more tickets than anyone else on the planet, sold about 350 million tickets in the U.S. and internationally. We only sold about 17%, one-seventh of our seats… the issue for us will be convincing movie goers that our theaters are safe, that our theaters are clean…”

Source: Adam Aron, CEO, AMC Entertainment 9/10/2020

According to Statistica, a survey conducted in June 2019, long before the pandemic, found only 14 % of adults in the U.S. went to a movie theater “one or more times per month.” But 46% went to the movies “infrequently, once a year or less,” and 40% went to the movies “occasionally, less than once a month.”

Amelia Island’s B & B Theatres opened in Fernandina Beach in March 2017, after renovating the movie theater formerly occupied by Carmike Cinemas. When Carmike vacated, the Amelia Island theater at Lime & 14th Street in Fernandina Beach sat empty for more than two years, until B & B brought it back to life. The Missouri-based company extensively remodeled the Amelia Island cinema, adding reclining chairs and numerous upgrades and technology. The Fernandina Beach community was pleased to once again have the opportunity to go out to the movies on Amelia Island.

Looking at Amelia Island’s B & B Theatre website in July 2020, a message (screenshot below), asked supporters to “tell Congress to save your cinema.”

b-and-b-theatres-website-screen-shot-july-2020-save-our-cinema
B & B Theatres’ Website (July 2020 Screenshot)

The “Save Your Cinema” initiative was announced in mid-July by the National Assoc. of Theatre Owners, stating:

The COVID-19 pandemic has put movie theaters across the country at risk of going dark for good. From small independent screens to nationwide exhibitors, our local theaters employ over 150,000 people and have formed a cornerstone of the American experience for generations. Without swift action from Congress our favorite theaters could close forever, depriving audiences of the magic of movies for years to come.

“Save Your Cinema” urged supporters to tell legislators to enact the “Restart Act.” According to the National Law Review, “The RESTART Act’s primary appeal is that it is a long-term loan program available to businesses with revenue losses of at least 25% and a forgiveness component if certain requirements are met.” (See Congress.gov for more about the “Restart Act.“)

Discretionary Spending

Even before the pandemic, however, the movie going audience was already getting chipped away. Surveys of U.S. adults found the top reason deterring people from going out to the movies was ticket prices. To a lesser extend was other content options like Netflix, Amazon Prime video, Hulu and others.

During the 20-year period from 1999 to 2019, the average price of a U.S. movie ticket went from $5.06 to $9.16, according to NATO (National Assoc. of Theatre Owners).

Now with economic fallout from the pandemic, some are living on tighter budgets. Besides loss of attendance from the Coronavirus, two additional ground shaking changes happening recently will also impact the movie exhibition industry.

Landmark Change In Movie Exhibition Window

Universal Pictures made a new deal with AMC in July (after an initial spat between the studio and cinema companies). With the new deal, consumers will not have to wait as long to see a new film release at home. The new agreement allows films to be released to video on demand (VOD) streaming after just three weeks. This is a far shorter time frame from the previous standard time lag of 90 days that had given movie theaters exclusive exhibition rights for three months. The Universal deal also gives AMC a percentage of VOD revenues.

In a press release about AMC Entertainment’s second quarter 2020 earnings, the company stated:

 “We would be remiss not to mention the landmark agreement just signed with Universal Studios which generates revenue for AMC when consumers watch films in our theatres or when they do so on their couches at home, and we have already commenced discussions with all of our studio partners to determine their interest in our pursuing similar agreements with them.” (August 6, 2020)

New Movies Released Directly To Digital

In these times of COVID-19, some movie studios are opting to release their brand new films directly to digital. Disney decided to do so with their new movie Mulan, releasing it on their own Disney streaming service on Sept. 4, 2020.

Old Anti-trust Law Terminated

After more than 70 years, anti-trust licensing rules known as the “Paramount Consent Decrees” were ended in early August 2020 by a federal judge (with sunset clause). Back in 1948, a U.S. Supreme court decision (United States vs. Paramount Pictures), had ruled that film studios could not legally own their own movie theaters, along with other licensing regulations. The new federal decision states: “The Antitrust Division of the U.S. Dept. of Justice moves to terminate the Decrees effective immediately, except for a two-year sunset period on the Decrees’ provisions banning block booking and circuit dealing.” (Learn more, see the 17-page decision, U.S. vs. Paramount).

In the aftermath of the pandemic and uncertainty surrounding these other ground shaking shifts in the mix, the reshaping of the industry seems certain in coming years.

Related Content

Amelia Island’s New Movie Theatre (past article March, 2017)

By The Editor

"PERSPECTIVE" column features observations of island life, news & opinion.