Are Movie Theaters Completely Screwed?

Photo: Mike Blake/REUTERS

Few businesses have been more adversely affected by the pandemic than movie theaters. And with an increasingly wide array of streaming options available to consumers, even theaters that have innovated aggressively are finding themselves in trouble. On the latest episode of the Pivot podcast, Kara Swisher and Scott Galloway discuss the path forward for an imperiled industry.

Kara Swisher: Let’s talk about the troubles for the entertainment industry and where we go from here. My favorite movie chain experience is ruined — the Alamo Drafthouse has filed for Chapter 11 bankruptcy. This is a chain that’s been struggling through the pandemic, and obviously so, because it’s a real experiential thing where you go and eat in the theater and they have food, and then you watch movies and beautiful seats, et cetera, et cetera. They’ll continue to operate, but have been acquired by Altamont Capital Partners, which frightens me in some way. They are, I assume, a hedge fund.

Meanwhile, the Golden Globes’ viewership sunk to record lows. Globe ratings plummeted more than 60 percent from the 18.3 million viewers last year to an audience of 6.9 million. I think the ratings will probably jump back next year. But what do you think about the Alamo thing? I still think movie theaters are screwed, as I’ve said before. What do you think?


Twice weekly, Scott Galloway and Kara Swisher host Pivot, a New York Magazine podcast about business, technology, and politics.

Scott Galloway: Well, first of all, Altamont Capital Partners — doesn’t that sound like you go to meet with Altamont and then all of a sudden, the elevator turns dark and you plummet to some unknown floor and they grab you and harvest your organs?

Swisher: Sharks.

Galloway: Yeah, seriously.

Swisher: Like in a Bond movie, sharks.

Galloway: That sounds so sinister. “Welcome to Altamont, where the future is yours.”

Swisher: Let me just say, allegedly they have elevators where the floors fall out. You know what? They’re a very nice company. They do not have elevators where the floors fall out. That was a joke. That was satire. They do not harvest organs. I’m just trying to protect us legally. That was satire — satire.

Galloway: I’m sure they’re lovely people. Let me guess, a bunch of white dudes. Going out on a limb here. There’s me and my identity politics. I know nothing about them. I’m making stereotypes I shouldn’t.

Swisher: They do not have sharks at the bottom of elevators. Go ahead.

Galloway: This is the biggest jump over the biggest shark I have ever seen in media.

Swisher: Meaning?

Galloway: Golden Globe viewership was off 62 percent this year. You know how much you loved it? That would make you one of seven people who loved the Golden Globes.

Swisher: I liked some of the moments. I liked Jodie Foster making out with her wife, stuff like that. But go ahead.

Galloway: Everyone is panicked that the Super Bowl was down 8 percent in viewership. The Golden Globes were down and everybody said, “Oh, broadcast TV, ad-supported television, will always have live events and sports.” Well, guess what? That wall has been breached. The Golden Globes off 62 percent.

Swisher: Yeah, that’s a lot.

Galloway: The other point of distribution for the media industrial complex, the film industrial complex, is the movie theaters. Remember we had Mark Cuban on, who was like, “Oh, no. Movie theaters are great. They just need to evolve.” Well, Alamo Drafthouse — bankrupt. IPIC, which I love — bankrupt. And here’s the thing, Kara, here’s the thing — I’m going to tie this to today’s news.

Swisher: Okay.

Galloway: All right. Paramount+ is launching today.

Swisher: Yes. I saw that. Yeah.

Galloway: Okay. So, you’ve got Jean-Luc Picard.

Swisher: Right.

Galloway: You’ve got Trevor Noah. You’ve got Lionel Messi — they have the Premier League games. And you’ve got SpongeBob SquarePants. All for 6 bucks a month. So, the cost to go to Alamo for one night — that’s at least 70 or 75 bucks. Or you can have Lionel Messi and Starship commander Jean-Luc Picard for a year.

Swisher: I don’t think it’s a big business. But it’s a small business in a non-pandemic environment. My idea was that all movie theaters are going to contract to small businesses.

Galloway: That business will go through a Chapter 11. It’s essentially a retail play. And retail was invented for Chapter 11 because you get to go through and cherry-pick the Alamos that are actually working. And they get an excuse to cut costs, get out of bad leases. It will come back. But my guess is, and I hate to say this, I think Alamo and every other theater — they could be a Chapter 22. Meaning, they could come out and go back in.

Swisher: There is no such thing as Chapter 22.

Galloway: Well, that’s a finance term for insiders.

Swisher: Yes. I got that.

Galloway: When you go Chapter 11 twice. Jay-Z knows what that means!

Swisher: I can add. I can add.

Galloway: Anyways, we have an IPIC here in Delray. And I love it.

Swisher: Explain what IPIC is, for those who don’t know.

Galloway: Well, IPIC is basically you go to a movie theater and they let you watch in a La-Z-Boy and they bring you Zacapa and cokes. It’s heaven. I’ll tell you what it is — it’s heaven. I started taking the kids to see kids’ movies there. I hate kids’ movies more than anything. And then I realized I probably shouldn’t be drinking on outings with my children.

Swisher: Well, we all knew that.

Galloway: So, I stopped doing that. But now, when I go to movies, I only go to IPIC. I think it’s amazing. You hit this button and they bring you sliders, they bring you alcohol. I imagine it’s probably the same as Alamo. I don’t know what Alamo is. Is Alamo the same thing?

Swisher: Kind of, yeah. They have liquor.

Galloway: It’s a differentiated premium experience. IPIC went bankrupt before COVID. They couldn’t figure it out before COVID. And everyone loves it, but here’s the thing it’s just — again, it goes back to dispersion. And that is the content creators and consumers are pairing up to say, you know what? We don’t need CAA. You know what? We don’t need movie theaters to stop that great content from getting to your amazing living room that, by the way, has innovated like crazy. I have this thing called a Wallpaper TV. It’s incredible. Anyway, this dispersion is skipping over friction, distinct of who it hurts. And whether CAA or the guy directing Batman all want to hold on to the media —

Swisher: They do. Their high dudgeon gave me a headache after my Jason Kilar interview, I got to say. Gave me a headache.

Galloway: So look, this is more evidence of dispersion. I think movie theaters are going to be… I mean, they might as well call them Sears at this point. I think you’re going to see a real implosion. It’ll be interesting to see if and how Alamo comes back.

But okay, the Golden Globes live, 62 percent down. The advertising industrial complex, and movie theaters, and the film industrial complex is literally collapsing on themselves.

Swisher: Yes. So what happens? I have to say, interestingly, Kara Swisher is going to buy another big-screen TV. I have real old TVs.

Galloway: Well, that’s news.

Swisher: My son has a nice one, but they don’t cost that much and I really like watching at home. It sounds crazy, but …

Galloway: They’re less expensive than nice wallpaper.

Swisher: I was wondering what I will go back to post-vaccine, post-pandemic, and I think I will go to movies, certain movies, ones that I want to see on a big screen.

Galloway: Less and less, Kara.

Swisher: Oh, totally.

Galloway: Less and less.

Swisher: It was already happening. But which movies will I want to see on a big screen? Probably Top Gun or something like that.

Galloway: You know what it is? I don’t think you’re going to go to movies for the movie, I think you’re going to go to movies for the people, and that is your kids will get excited about something. It’s a chance to get your kids out of the house.

Swisher: No, my kids do not like movie theaters.

Galloway: When your daughter gets a little bit older, you’ll take her to see cute movies for the experience.

Swisher: Maybe.

Galloway: How we see movies — we go out with groups of friends and we go see Queen all together and we wear white T-shirts, white tank tops, because we’re that kind of crazy fun people. And then we go back and have a key party because we’re bored and live in the suburbs.

Swisher: You don’t go to key parties.

Galloway: There’s a ’70s reference.

Swisher: I know. There’s a great movie with Sigourney Weaver, what’s it called?

Galloway: Alien?

Swisher: The Ice Storm. Oh, it’s really good. It’s about a key party. Bad things happen after a key party.

Galloway: Hm. I’ve actually never been to a key party. I have never been invited to a key party, which makes a lot of sense.

Swisher: Why would they invite you to a key party?

Galloway: Well, that’s the point.

Swisher: It’s really good, The Ice Storm.

Galloway: Ms. Platinum Loyalty Cardholder at Alamo Drafthouse.

Swisher: Yeah.

Galloway: We go to movies for people and for experience, no longer for the films and the Golden Globes. Anyway, bottom line is there’s so much value leaking away from the traditional film enterprise, from agencies. I think you’re going to see a major agency to go through a restructuring, moving to the streaming platforms, because think about it: My God, I thought, Paramount Plus, when I heard it — I was immediately snarky. “Oh God, another streaming platform we don’t need.” There’s all these articles saying we have subscription fatigue. No, we don’t. For 6 bucks a month, it’s an amazing deal.

Swisher: Yeah, you’re right.

Galloway: It’s an amazing deal.

Swisher: It’s an amazing deal. But then you have a lot of them, that’s the issue. Ultimately, it adds up monthly.

Galloway: There needs to be an operating system on top of it. I think you’ll still pay as much.

Swisher: Consolidation.

Galloway: There’s some really interesting research. When asked what people think they pay for subscriptions, they report on average 84 bucks a month. Do you know how much on average we pay in subscriptions each month?

Swisher: I don’t know, what?

Galloway: $230. Which means we think we’re getting a great value.

Swisher: Yeah, we do. And it all started with Amazon Prime. I feel good about it still to this day.

Galloway: 100 percent.

Swisher: And I don’t know what I pay.

Galloway: 100 percent.

Swisher: All right, this is fascinating. We’ll see what happens. I think Alamo Drafthouse will come out of this. It’ll be smaller. Like what I was saying about AMC — look, it’s a small business. That’s what it is, it’s a small business and it’s a smaller business going forward unless they can come up with some fantastic innovation. I don’t know what it would be. Maybe 3-D.

Galloway: Taking your kidney.

Swisher: No.

Galloway: I think that’s the only thing that saves Alamo. “Would you like sliders? Please flip on your stomach. You’ll feel a pinprick in your shoulder.”

Pivot is produced by Rebecca Sananes. 

This transcript has been edited for length and clarity.

Are Movie Theaters Completely Screwed?