There is a moment in Godzilla vs. Kong when King Kong, weary from battle, needs a jumpstart before he can get back to punching Godzilla in the face. His human allies resolve to explode a vehicle directly on his chest to help resuscitate him.
That’s essentially what Godzilla vs. Kong just did for AMC Entertainment—and perhaps the movie theater industry as a whole.
After a strong global debut earlier this month, the film opened in the US on March 31 and continued its rampage. Godzilla vs. Kong generated $48.5 million in ticket sales during its five-day US opening—more than double analysts’ projections of $23 million. The film smashed the box office despite being released on the HBO Max streaming service the same day it premiered in theaters. It also succeeded even though 40% of US theaters are still closed, and those that are open have capacity restrictions.
The massive opening weekend prompted Wall Street to reassess the viability of AMC, which has fought to avoid bankruptcy during the Covid-19 pandemic. B. Riley analyst Eric Wold upgraded his rating on the company from “neutral” to “buy,” raised his price target from $7 to $13, and said Godzilla vs. Kong could signal a mighty return to cinemas this summer.
AMC’s stock jumped more than 13% on Monday following the film’s release in the US and Wold’s rating upgrade:
“These results are very telling, especially considering that the movie was available for free to HBO Max subscribers at the same time as the theatrical release,” Wold said in his report. He added that the film’s box-office success is a “clear indication that consumers want to return to theaters even with the onslaught of streaming options reaching homes.”
The way forward for theaters
Theater companies and their supporters had been concerned that WarnerMedia’s controversial strategy to release its films on HBO Max at the same time as in theaters would destroy those films’ box-office prospects. Godzilla vs. Kong suggests a movie can still thrive in theaters despite a simultaneous streaming release—at least, as long as consumers are hungry to get out of the house. It remains to be seen if the film’s success can be repeated by other films later this year or in future years after the pandemic has receded.
Wold has been more bullish about the theater industry than some of his peers. In December, he told Quartz that China’s box-office resurgence—even with capacity restrictions—proved that the US market could do the same once the country got a hold on the coronavirus. Other analysts have maintained a “sell” rating on AMC, arguing that even as consumers emerge from the pandemic, streaming still poses a long-term existential threat to the theatrical business model.
In response to that threat, most major theater chains, including AMC, have made agreements with Hollywood studios to shorten the amount of time films play exclusively in theaters before they’re available on digital platforms. Godzilla vs. Kong provides hope that some consumers may always opt for the theatrical experience—even when a movie is available instantly at home too. Some things, like giant apes punching huge atomic lizards, are simply better watched on the big screen.