With movie-lovers stuck at home, streaming services like Netflix Inc. are experiencing record demand with “Tiger King,” a documentary about a big-cat trainer who goes by the name of Joe Exotic, attracting 34.1 million U.S. viewers in the first 10 days after its release. Netflix shares have surged 32% this year through Wednesday, boosting the fortune of co-founder Reed Hastings by almost $1 billion to $5.2 billion. The stock climbed again Thursday to a record high, adding 3.5% at 1:15 p.m. in New York.
China was poised to eclipse the U.S. as the world’s largest movie market in 2020, until the coronavirus eruption wiped out almost all ticket sales since the Lunar New Year holiday in late January.
Wanda Group’s overseas movie business now faces similar stresses. Three analysts downgraded AMC to a sell in April, according to data tracked by Bloomberg.
“AMC is in a worse position than Cinemark because its debt load is so high,” said Michael Pachter of Wedbush Securities. “Other chains like Marcus own their real estate, so they don’t have to pay rent and can ride out the pandemic.”
Even after the crisis passes, the industry faces an uncertain future. While some analysts predict U.S. theaters will have soft reopenings in the third quarter, China’s experience suggests that might be optimistic.
Sporting events, exhibitions and the opening of entertainment facilities including cinemas are still banned, China’s Center for Disease Control and Prevention said Wednesday. And it isn’t clear how many theater-goers will return once the restrictions lift.
“There is not only uncertainty as to when theaters will be allowed to reopen,” said Eric Wold, an analyst at B. Riley FBR, “but also what the film slate will look like and how consumers will react.”
--With assistance from Kelly Gilblom, Shirley Zhao and Alex Sazonov.
This article was provided by Bloomberg News.