From first dates to family outings, a night at the movies used to be a huge pre-pandemic draw. However, one of society’s biggest rituals is struggling to recover, even as COVID-19 capacity limits are lifted.

Like many other sectors, the longer-term survival of movie theaters is a huge open question, especially among small and independent operators. Many theaters across the country were shuttered for over a year as Hollywood drastically curtailed the number of new releases, or narrowed the theatrical windows before making them available on video.

This weekend, Daniel Craig’s final turn as James Bond in “No Time to Die” will be a big test of the public’s willingness to turn out in the same numbers as before the virus dramatically changed life around the world.

Even though U.S. movie theaters have now fully reopened and people are finally returning to the cinemas, an ever-expanding glut of streaming options make some observers doubt that cinema’s golden era will return soon — if ever.

“People were going to movie theaters less frequently [and] the pandemic has served as an accelerant to those trends,” Paul Hardart, director of entertainment, media and technology program at New York University’s Stern School of Business, told Yahoo Finance in an interview.

The pandemic also changed certain aspects of consumer’s at-home viewing habits, which shows no signs of slowing down. According to a June 2020 study by Statista, 14% of adults surveyed strongly preferred seeing a movie for the first time in a theater, but 36% said that they would much rather stream at home.

Meanwhile, at home options are booming. About 20% of time was spent on streaming last year, according to Nielsen data recently cited by The New York Times, and may hit 33% by the end of the year, the report added.

Another challenge has been inflation: Ticket prices have been on the rise, with the average ticket price in the US jumping from $5.39 in 2000 to $9.16 in 2020, which even before COVID-19 was cited by consumers as a negative.

“We can all expect the ticket price to go up and the type of movies that we go see will start to change,” Hardart said.

‘Absolutely willing’ to come back

However, recent months have given some theaters cause for optimism.

Over Labor Day weekend, Classic Cinemas locations in Illinois and Wisconsin saw more visitors than in 2019 to see the release of Marvel’s (DIS) “Shang-Chi and the Legend of the Ten Rings,” which bowed to a debut of over $70 million.

It was the first time attendance at the family-owned chain surpassed pre-coronavirus numbers since reopening in April, coing after a year-long shutdown.

“The guests are absolutely willing, able, and coming back when there are movies they want to see,” said Chris Johnson, CEO of Classic Cinemas.

As the first Marvel film to be shown exclusively in cinemas since the pandemic began, “Shang-Chi” cleared a huge bar for moviegoers’ willingness to come back to theaters July’s “Black Widow” was a simultaneous Disney+/ theater release, and earned more on streaming than on screens).

During the pandemic, studios like HBO/Warner (T) (DISCA) followed a similar hybrid strategy, hoping it would buy time until mass vaccinations would curb COVID-19’s spread.

However, the Delta variant surge unsettled many moviegoers, and the dual release strategy was a perverse incentive of sorts. When given the option, many consumers just decided to watch from home.

Monthly data from Datex Property Solutions shows that national chains paid 95% of owed rent in August as receipts rebounded. Collections from movie theaters have skyrocketed 81% from 48.9% a year ago, but sales are down by 48% since 2019, Datex found.

However, occupancy costs are up a staggering 96% relative to 2019 — one reason why chains like ArcLight Cinemas and Pacific Theatres have closed many of their Los Angeles locations permanently.

The closures have flooded the LA market with movie theater real estate — “an opportunity major chains such as Regal, AMC and Cinemark will likely capitalize on as the three make up nearly 70% of the regional cinema market,” CBRE Group Inc. said in a recent report.

“We need consistent supply,” Classic Cinemas’ Johnson told Yahoo Finance. “We could build some momentum this year but it’s all reliant on the studio product.”

Like many of its cohorts, Classic Cinemas was decimated by the pandemic. After its long closure, the movie theater installed a new air filtration system, hired extra “cleaning” staff to attract more customers, and paid more for just about everything.

“The challenge is when you're trying to spread that out amongst a small movie going audience, everything gets sort of taken care of when you have the appropriate number of people,” Johnson said.

The chain got Paycheck Protection Program (PPP) and Shuttered Venue Operators Grant (SVOG) money, which helped cover labor and overhead through the pandemic’s worst days.

Still, the box office is limping back to normal as people slowly head back to the movie theaters. The global box office is expected to reel in $20.2 billion in 2021, down 52 percent from the record-breaking 2019, but 68 percent above last year according to a new study from London-based data firm Gower Street Analytics.

“I am absolutely confident that if we're supplied with movies that we're going to be fine,” Johnson added. “Movie theaters will be back.”

'I'm not worried about getting sick'

Yet signs are emerging that movie lovers are more eager to fill seats again.

Sony’s “Venom: Let There Be Carnage” blasted past all expectations with an estimated $90.1M opening on over 4,000 screens —, the best opening weekend previously set by Disney Black Widow at $80.73M.

While cinemas are showing signs of recovery from last year, it's been a wild ride for the film industry. Big players like Disney, HBO and more recently Comcast’s (CMCSA) Peacock platform— opted to make many of its new films available in cinemas and streaming, either for free or for a $30 fee (Disney+).

For its part, Disney seems to be confident that consumers are ready to return to cinemas and the future of blockbuster features are on the big screen. After “Shang-Chi” defied expectations, the company announced the rest of its 2021 schedule will be shown in theaters exclusively.

“Everyone acknowledges the fact that film distribution fails to become profitable without the theatrical presence,” said Cory Jacobson, president and owner of Michigan-based Phoenix Theatres. “If you do not have the theatrical window in place, it's just lost money.”

Amid the anticipated arrival of “No Time to Die,” which earned $22 million in global ticket sales in its first two days of release, the jury is still out on whether movies will be viable again.

Meanwhile, new headwinds could emerge as moviegoers in big cities like New York will now have to show proof of vaccination status and wear a mask in order to attend screenings.

According to NYU’s Hardart, the Delta variant’s prevalence will make movie goers reconsider going to the cinemas and wait to watch it at home.

“I am not worried about wearing a mask for two hours. I'm not worried about getting sick,” Hardart said.

A recent Deloitte study underscores the pandemic-era challenges for movies, with 57% of respondents saying watching TV and movies at home continues to be the overall favorite entertainment options.

Although box-office receipts suggest that movie theaters are heading for a recovery, bigger chains have been the main beneficiaries.

AMC (AMC), which made a number of bold moves to lay the groundwork for its renaissance, is banking on consumers coming back to theaters. Riding the wave of the meme stock trading phenomenon, the company has raised more than $1.8 billion in cash, mostly from stock sales.

“The retail investors provided AMC a lifeline,” Alicia Reese, equity research analyst, told Yahoo Finance in an interview.

“They have the cash to reinvest in the company to expand their footprint with some of the theaters that are coming up for sale because they didn't make it through the pandemic,” Reese added.

The company will also pay down some of its $5 billion in debt, reducing interest costs and paying millions in unpaid rent.

AMC barely escaped bankruptcy this year. But small, local theaters lacking the same resources may not be so lucky, especially as operating costs climb.

“We spent $10,000 on hand sanitizer, which is a lot of hand sanitizer,” said Jacobson, who also got PPP and SVOG assistance.

In December, the Small Business Administration set up a $16.1 billion fund to provide eligible movie theaters, live venues operators and performing arts organizations with grants that could help save their businesses.

“The people that are in it for the long haul seem to be pretty happy and bullish about the future and where they're going with this,” Jacobson said.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

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