Will they or won't they? That's the big question investors in movie theater chain AMC Entertainment Holdings (AMC 8.22%) are asking themselves. Most of the company's U.S. locales were reopened last week, and as of this Friday, 99% of them should be up and running. But will film fans actually trust the steps AMC has taken to curb the spread of the coronavirus and risk spending time in a crowded indoor theater? The company's very survival may be at stake.

There's no black-and-white answer. Some consumers were never afraid of COVID-19, while others may never see a movie on the big screen again. Most people are somewhere in between those two extremes, though, and at least a little less fearful than they were a year ago.

A popcorn bucket falls to the floor of a movie theater as a woman sitting in the theater seat reacts.

Image source: Getty Images.

Perhaps the more meaningful question to ask is whether enough people will step foot in a movie theater this year to undo AMC Entertainment's incredible 2020 misfortune. The theater chain lost nearly $4.6 billion last year on 77% less revenue than it generated in 2019. COVID-19 is of course the culprit.

While the stock's 145% run-up from February's low jibes with the optimistic rhetoric surrounding the stock now, this is still a troubled company facing a tough future. This optimism may be misplaced.

No middleman needed anymore

Don't misunderstand me: This year will almost certainly be a better one. The analyst community is modeling 100% revenue growth this year, matched by a loss of only $3.52 per share versus last year's loss of $39.15. Next year's loss is expected to be an even more modest $0.88 per share. Profitability is preferable, but progress is rewardable.

It's an outlook, however, that ignores a huge paradigm shift in the way movies are being marketed to consumers. Simply put, studios are increasingly OK with bypassing theaters.

Case in point: AT&T's (T 1.10%) WarnerMedia debuted Wonder Woman 1984 in theaters in December at the same time it became available for a limited time as a streaming title for the company's HBO Max subscribers. The company didn't offer specific viewer metrics, but given its follow-up decision to offer the same dual-viewability for all of its flicks this year, clearly the company did well enough with the direct-to-consumer approach compared to box office takes.

In a similar vein, Walt Disney (DIS 0.16%) found enough success with Mulan as a pay-per-view title last year -- selling it to subscribers of an already-successful Disney+ streaming service -- to prompt a top-down reorganization that prioritizes streaming over all other media channels. Comcast's (CMCSA 1.57%) film arm Universal found surprising success with Trolls World Tour as a direct-to-consumer movie, despite its originally being planned as a springtime theatrical release, prompting NBCUniversal CEO Jeff Shell to tell the Wall Street Journal shortly thereafter that, "As soon as theaters reopen, we expect to release movies on both formats" -- meaning in theaters as well as streaming pay-per-views.

Consumers are getting comfy at home too

So studios are ready for the shift, but what about consumers?

Take it all with a grain of salt, since consumers can (and do) say one thing then do another. Still, consumer opinions help paint a picture of what's on their minds. And a sizable swath of them are permanently leery of entering crowded theaters, especially when the same entertainment is available in the safety of their own homes.

A crowd of talking people.

Image source: Getty Images.

Data from a Deloitte survey published in December puts things in perspective. Once the pandemic is in the rearview mirror, 35% of U.S. consumers indicate they're likely to see newly released films in actual movie theaters. Not bad. But 42% of U.S. consumers say their post-pandemic enjoyment of new feature films will probably happen at home.

And that survey was taken while the dust was still settling on consumers' optimization of at-home entertainment settings. NPD Group reports sales of televisions were up 19% over the course of last year, largely driven by the 82% growth in sales of 70-inch (and bigger) TV sets. These buyers are still figuring out how to get the most out of their investments, but more streaming is sure to be a part of the mix.

By themselves, these wouldn't be terrifying numbers for a reasonably healthy industry. But the theater business wasn't particularly healthy headed into the coronavirus pandemic. BoxOfficeMojo's data says movie ticket sales have been relatively stagnant since 2015, while annual per-theater revenue has been trending lower since the early 1990s. Total sales of individual tickets peaked in the early 2000s, according to data from theater industry database The Numbers.

Translation: The only thing that's really kept the theater industry growing in recent years has been higher prices and more scale, which is now proving unnecessary.

AMC Entertainment is entering its post-pandemic recovery already on the defensive.

Keep your hopes tempered

None of this has deterred investors from following AMC. Some films are just best seen on a big screen. While down sharply on Monday, there's a reason shares started rallying again in mid-February, racing to new 52-week highs earlier this month.

That's a gain likely rooted more in hope and reopened theaters than in plausible numbers of patrons, though. As reality sets in this year, it will become clearer that AMC Entertainment can never be what it used to be, no matter how much of a rebound it has from 2020's lull. Adjust your investment expectations accordingly.