A view of the Regal Loews Cinemas cinema in Times Square in New York City.
Noam Galai | Getty Images
Theaters had to close eight months ago due to the coronavirus pandemic. Now that the number of cases is rising again, theaters in New York, a major cinema hub, could stay closed even longer, and some may never open again.
New data released by Comscore to CNBC on Thursday shows the importance of the area to the film industry.
There are nearly 300 movie theaters in New York State, but the main geographic metric that analysts focus on is the New York Designated Market Area [DMA]. This is an area of New York City that includes part of Connecticut and New Jersey and excludes movie theaters north of Albany and west of Cooperstown. Within this DMA there are 234 cinemas, which according to Comscore account for 7.4% of the total domestic box office.
This is the second highest driver of ticket sales in the US, just behind the DMA in Los Angeles, which accounts for 8.9%.
"New York State is an important market for the exhibition industry, not just in the US but around the world," wrote the National Association of Theater Owners earlier this month in a letter to Governor Andrew Cuomo deciding to move theaters outside New York Open York City with limited capacity.
The designated market area of New York.
Perhaps most importantly, this region includes the 45 locations in New York City, which, according to Comscore, account for nearly 40% of all DMS ticket sales. Only one theater is currently open in New York City, a drive-in location that is exempt from coronavirus indoor theater restrictions.
According to Comscore data, this drive-in accounted for 6% of ticket sales in New York last weekend and is likely to close soon when the weather turns colder.
Average daily Covid-19 cases in the U.S. hit a new all-time high on Wednesday, marking the fourth straight day the nation beat its record from the previous day. The 7-day average of daily new US cases was 74,183, up 24% from a week ago. This comes from a CNBC analysis of data from Johns Hopkins University.
"As the pandemic continues, movie theaters are literally at the mercy of state and local protocols that in many cases prohibit them from opening at all, much less at reduced capacity," said Paul Dergarabedian, senior media analyst at Comscore.
While all of New York State accounts for only 6% of total domestic ticket sales, it is a massive marketing hub for movies. Movies that do well in the city create buzz and help sell tickets in other parts of the country.
"The 5 boroughs, which have been temporarily withdrawn from circulation … are a powerhouse when it comes to generating box office revenue. They have a large number of avid film fans who are always on the lookout for new and noteworthy films in theaters are, "said Dergarabedian.
Because of this, the studios announced earlier this month to movie theater owners that they wouldn't be releasing big blockbusters unless New York theaters reopened.
"With New York cinemas closed for almost seven months and no indication of when they would be allowed to reopen, studios that supply new films were reluctant to release their latest films until almost no new major films were released worldwide 2021 and beyond, "wrote NATO earlier this month.
"Without new films in our theaters, many members of the global exhibition community will be forced to close their doors again," said NATO. "Many of these companies will not survive."