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Future of movie theaters is high-amenity locations, EPR Properties CEO saysfrom SNL Real Estate Daily Future of movie theaters is high-amenity locations, EPR Properties CEO saysByline: Tom Yeatts There will be fewer movie theaters in the post-pandemic period, and those that survive and thrive, in most cases, will be high-amenity locations, EPR Properties President and CEO Gregory Silvers said Nov. 17. "We've always felt the high-amenity theaters were better positioned, just because the consumer has spoken with their feet," Silvers said during a company presentation at Nareit's annual REITWorld conference, held virtually this year because of the coronavirus pandemic. Silvers defined amenity-rich theaters as ones with leather or other luxury seating, higher quality food and beverage options, IMAX and other large-format proprietary screening technology or some combination of "creature comforts" and augmented technology. In 2019, theater properties accounted for half of EPR's total portfolio, according to S&P Global Market Intelligence data. Nearly 60% of the theater assets might be deemed highly amenitized, with at least luxury recliner seating, Silvers said during the presentation. Amenities may turn out to be less essential for theaters in high-density urban markets, like New York City, where maintaining regular foot traffic does not hinge on such offerings, he said. Video on demand vs cinemas Silvers said the next few months will be "challenging" for the business, given the delay of new movie content coming to theaters. But 2020 will not turn out to have been, as some have predicted, the turning point where premium video on demand took over the so-called exhibition industry, he said. "I think right now we can put that [theory] to bed," he said. "Through various models we've seen that premium video on demand just doesn't work. It doesn't drive the revenues, and the studios have learned this." Silvers posited a continuation and expansion of the trend whereby movies are exhibited for an abbreviated period on the big screen before moving to a streaming platform where they are viewed, not on demand, but as part of a video library. The executive allowed that the standard exhibition window may shorten, potentially to a few weekends, up to about 60 days. The window will also become more "dynamic" to meet actual demand for a given title. In a film's post-big screen life, consumers have shown a preference for the service subscription model over the pay-per-view experience, Silvers said. "What the consumer has spoken loudly is that they're willing to go to the theater and pay for a title and have that experience," he said. "And they are willing to buy streaming as a subscription service where they buy the all-you-can-eat buffet." |
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