Does COVID-19 Spell the Beginning of the End for Cinemark?

With more people staying home as a reaction to the coronavirus pandemic, Cinemark Holdings' (NYSE: CNK) attendance will undoubtedly feel the impact. There have already been smaller audiences in movie theaters over the years due to many factors, including streaming services like Netflix. And with new streaming services cropping up, such as Disney+ from Disney, the threat is only intensifying.

In the early 2000s, yearly movie attendance across the entire industry was in the 1.5 billion to 1.6 billion range. But this has fallen to 1.2 billion to 1.3 billion annually over the last several years.

The industry had a nice trick to keep box office revenue growing: It raised prices. This is not sustainable, though. Basic economics says higher prices lead to lower demand. So with fewer people going to the movies already, this leads to the question of whether they will now get used to staying home to watch movies because of COVID-19 theater closures.

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Source Fool.com