The COVID-19 pandemic turned the entertainment industry upside down. Media giant Walt Disney (NYSE:DIS) and movie theater operator AMC Entertainment Holdings (NYSE:AMC) were forced to close down their main attractions for several months and things just weren't the same when the theme parks and movie theaters were allowed to open their doors again. One of these fallen entertainment giants is poised to make a full recovery. The other is likely to file for bankruptcy before the health crisis is over.

Yes, you can buy Disney today

Make no mistake: The pandemic is really painful for Disney and its investors. The theme parks are operating under strict social distancing guidelines, sparsely populated, and unprofitable under these conditions. The same goes for Disney's cruise line, resorts, and hotels. ESPN is showing live sports again but every professional league is prone to sudden cancellations when athletes turn out to have COVID-19.

As for the filmed entertainment side of the house, Disney has found the traditional movie theaters to be an ineffective method of content distribution. The House of Mouse pushed back several long-awaited titles into the 2021 season, hoping for a more hospitable business environment as COVID-19 vaccines become widely available.

But that's not Disney's only coronavirus mitigation strategy in the filmed content segment. The company is embracing direct-to-consumer (D2C) distribution through the Hulu and Disney+ video-streaming services. Some movies that were originally slated for the silver screen are skipping theaters altogether and raising the curtain directly on Disney+.

A smiling young couple cuddle up on the couch with a TV remote.

Is this the future of the movie industry? Disney thinks so. Image source: Getty Images.

Going forward, Disney will mix it up with a few titles skipping the theater circuit and others premiering on Hulu or Disney+ on the same day as their theatrical releases. And in the end, everything Disney creates is destined to call those streaming services home in the long run.

"Regardless of where it originates, all of our films and episodic series will inevitably end up as part of our incredibly rich and increasingly robust library of content on our D2C platforms," media and entertainment distribution president Kareem Daniel said in last week's investor day presentation. "By significantly ramping up production for these services, we will not only accelerate the growth of our D2C businesses, but also solidify our deep and very personal relationship with consumers globally."

And that is the secret sauce that will see Disney through the pandemic. The company is also leaning on an incredibly robust balance sheet with access to $18 billion of cash equivalents and another $17.5 billion of untapped revolving credit lines. The company is not afraid to change up its business strategy if that's what it takes to stay relevant and healthy in a different market environment. That means focusing on D2C services right now, and Disney is pulling all the right levers to keep moving forward.

This might not be the best time in history to pick up Disney shares, since the stock made a full recovery from the COVID-19 sell-off long before the actual business did. That being said, it's always better to buy a great company at a fair price than settling for a fair company at a great price. In that light, it's never a bad idea to own Disney stock.

An empty movie theater. On the big screen, you see a closeup shot of a man wearing a surgical mask.

Image source: Getty Images.

Stay away from AMC

Thumper said it best in the Disney classic, Bambi. "If you can't say something nice, don't say nothing at all."

So I'm going to keep the AMC discussion short here. I don't have anything overly nice to say.

AMC is fighting the major Hollywood studios to keep their content flowing through the theater channel. Leading studios like Disney and AT&T's Warner Bros. keep coming up with ways to either skip theaters or dilute the foot traffic with day-and-date releases online. So the theater chain recently raised $100 million of additional debt in order to keep the lights on for a little bit longer, but the company will require another $750 million cash infusion if it wants to survive 2021.

AMC's creditors now recommend that the company should file for bankruptcy, which would let them take full control of the company in an attempt to win back some of their unpaid debts. Credit ratings company Moody's gives AMC a corporate rating of Caa3, which is one of the lowest grades in the speculative ratings swamp. Another stock offering is in the works. AMC and Cinemark were quick to shoot down a rumor that the two troubled cinema chains were planning a merger.

I mean, there is no happy ending at the end of this rainbow. If there is one thing you should take away from what you're reading here, it should be that AMC is a terrible investment these days and you should keep your capital far away from this wealth-destroying monster.

Sorry, Thumper. I had to say it.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.