The Oscars are one month away, and while the award show is usually a time to celebrate fil, the movie industry and particularly movie theaters continue to face serious headwinds. 

While prognosticating about the "death of movie theaters" is a long and storied tradition going back to the dawn of television, COVID has only ratcheted up the doomsaying. 

Indeed, for a minute there, it was looking like it was closing credits for the movie theater business. In 2020, as lockdown measures essentially froze the industry in place, box office sales plummeted 80 percent, according to data from media analytics company Comscore. 

Then in 2021, ticket sales jumped 113 percent from their early pandemic lows, and while this was still less than half the gross annual income that theaters made in 2019, it seemed to suggest that the business still had a fighting chance. The only problem was theaters needed new releases to fill seats, and unfortunately for them, the supply of movies is entirely out of their control. 

Considering that film production also screeched to halt in 2020, that supply is still nowhere near pre-pandemic levels. There were 436 new releases in 2021, which is actually lower than in 2020 and down from 911 in 2019, according to Box Office Mojo.  

"We talk about supply chain issues in terms of hard goods, but theaters need movies," said Paul Dergarabedian, senior media analyst at Comscore. "The business is built on momentum, and you need a steady supply of films on an orderly release pattern."

Put another way, it's like if McDonald's couldn't get enough beef patties, and even when it did get beef patties, they were of varying popularity week-to-week, month-to-month.  

Complicating matters for movie theaters is the fact that they are large physical spaces with fixed costs that can go up whether the latest releases are pulling in a crowd or not. 

"If you're a movie theater chain, and you're leasing, the monthly or yearly fixed costs are insane, particularly if you've been in the same location for 20 years and your rent has gone up 2-3 percent per year," said Dergarabedian. "Those costs are fixed, whether the industry is doing $11 billion per year or $5 billion per year." 

With fewer releases on the calendar, movie theaters, like studios, are increasingly banking on a handful of mega-blockbusters to deliver the bulk of their ticket sales. 

Sometimes such a flick does come along. Just look at Spider-Man: No way Home. It's now the third-highest-grossing film of all time, surpassing James Cameron's Avatar from 2009. It was the highest-grossing film of 2021, and it's still on top nearly three months into the new year. 

This dynamic has benefited companies such as IMAX, which more than even regular theaters relies on the kind of big-screen popcorn fare that is currently dominating the industry. The company on Thursday reported $278 million in ticket sales, which is a 15 percent increase from the fourth quarter of 2019 and a 146 percent jump on what it pulled in at the end of 2020. 

"Blockbuster hits have always been important for movie studios and cinema chains, but the global health crisis amplified the importance of these game-changing winners," wrote Anders Bylund for Nasdaq. "What goes for IMAX also applies to the more traditional movie venues."

But again, movie theaters can't just conjure up the next Spider-Man. They also can't control how and where major studios release their movies. WarnerMedia's 2022 films, for instance, will all have exclusive theatrical runs, while Disney plans to continue releasing films simultaneously in theaters and on its streaming platform. Look no further than the list of Oscar nominations for evidence that streaming releases are gaining ground, with Netflix contributing the most films. 

The future might not be all tentpoles, however. In an earnings call on Friday, Cinemark CEO Sean Gamble suggested that small and mid-sized movies could make a comeback as shorter theatrical windows bring down marketing costs, which in the past made those movies riskier. The company also notably posted its first profitable quarter since the start of the pandemic. 

With IMAX and Cinemark both crushing Wall Street estimates, movie theaters had a good week. Both companies also hinted at the possibility of alternative programming helping them break their dependence on the studio release schedule (and their respective streaming initiatives). IMAX is ramping up presentations of music, sports, and theater productions, while Cinemark is renting out its theaters for private video game parties.  

"For theater owners, this has definitely been a very tough time, but it's improving," said  Dergarabedian

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