Movies At a Crossroad
Nobody knows anything… not one person in the entire motion picture field knows for a certainty what's going to work." William Goldman's famous assertion, celebrating the inherent unpredictability of the movie industry, rings truer than ever in today's rapidly evolving entertainment landscape . While acknowledging this enduring uncertainty, a divergence between large corporate chains and independent theaters, coupled with a renewed emphasis on community engagement and flexible distribution models, will shape its survival and evolution. This is not a eulogy for the cinema, but an exploration of its potential rebirth.
The traditional movie exhibition model is undoubtedly facing significant challenges. The rise of streaming services and shifting audience preferences have led many industry observers to predict a bleak future for traditional theaters, suggesting they have less than two decades to adapt or face obsolescence. This necessitates a fundamental re-evaluation of the theatrical experience, moving beyond simply showcasing movies to providing enhanced and immersive experiences.
The global movie theater market is projected to reach $83.16 billion in 2025, with a compound annual growth rate of 5.24% through 2033. This growth, however, masks the internal shifts happening within the industry. Major chains are already exploring premium amenities and cutting-edge technology to attract audiences. AMC Entertainment, for example, is renovating theaters with plush, powered recliner seating and premium large format screens. The concept of increasing "event cinema," featuring concerts, anime screenings, and other specialized content, is gaining traction as a way to draw crowds and diversify revenue streams. Anime Expo Cinema Nights, for instance, screens classic anime movies across more than 500 theaters in North America, demonstrating the potential of niche content .
What's particularly fascinating is that the interests of large cinema circuits, such as AMC, Cinemark, and Regal/Cineworld, are increasingly diverging from those of smaller circuits and independent theaters. This growing divide will likely force Cinema United (formerly the National Association of Theatre Owners), an organization representing cinema owners, to align itself with one camp or the other . The corporate strategies of the major chains, often influenced by their ownership structures and a desire to maintain positive relationships with studios, may not always prioritize the holistic health of the entire exhibition business. This creates an opportunity for independent exhibitors to forge their own path, focusing on community engagement and advocating for fairer distribution practices. As Regal Cinemas closed its Centennial neighborhood 13-screen multiplex in Portland, marking its third closure in three years, nearly two dozen independent theaters in the same area continue to flourish . This is because independent cinemas can book special events more easily, such as all-day showings of movie trilogies or discussions with directors and actors following screenings . The Alamo Drafthouse's ability to secure the director of American Psycho for a two-hour post-screening discussion exemplifies the kind of unique programming that builds dedicated audiences .
One crucial aspect of this independent path is the demand for a reasonable theatrical release window. While studios often favor shorter windows to maximize streaming revenue, independent exhibitors are increasingly recognizing the need for a longer exclusive period to ensure their viability. Some smaller distributors are already considering offering exhibitors a firm 90-to-120-day window, fostering a collaborative ecosystem that benefits both parties. Research supports this approach. Movies with theatrical windows between 26 and 90 days demonstrate the most effective balance between box office performance and streaming success, capturing significantly higher average viewing market share compared to movies with shorter or longer windows .This acknowledges the complementary nature of theatrical and streaming releases, where a successful theatrical run can generate buzz and drive subsequent streaming subscriptions. As equity funds begin to recognize the potential for sequential success in both arenas – one quarter theatrical drives stock prices, the next quarter the promise of a strong streaming release – market sanity may prevail, leading to more balanced and sustainable distribution models.
The data also reveals that theatrical movies tend to achieve higher viewership in their streaming windows compared to movies released directly to streaming platforms . This has significant implications for distribution strategy and suggests that the theatrical experience contributes value beyond immediate ticket sales by building audience awareness and creating cultural events that drive subsequent streaming engagement.
The promise of the streaming wars, initially fueled by Silicon Valley optimism and the COVID-19 pandemic, has not fully materialized. While Netflix has achieved significant subscriber growth, the overall landscape is becoming increasingly competitive, leading to a greater emphasis on return-on-investment. Netflix has shifted its focus from subscriber growth to engagement metrics, recognizing that highly active viewers are less likely to cancel subscriptions .
This shift could temper the trend of exorbitant streaming projects and encourage a more pragmatic approach to content creation and distribution. In fact, premium streaming services reduced their national TV marketing spending by 18% to $216.1 million in the first five months of 2024, reflecting industry recognition that consumers have become overwhelmed by the volume of new content. This pullback may create opportunities for theatrical releases to capture more audience attention and media coverage.
Looking ahead, technology will continue to play a role in the evolution of movie exhibition, but the core appeal of the theatrical experience lies in its ability to foster community and shared experiences. While some technological innovations, such as video game play in theaters, may not gain widespread adoption, the fundamental desire for collective entertainment remains strong.
Drive-in theaters, with their inherent flexibility and potential for community activations, may experience a resurgence. The larger chains may evolve into Family Entertainment Centers, offering a wider range of activities. Texas has emerged as a hotbed of innovation in the Cinema Entertainment Center (CEC) space. Santikos Casa Blanca, for example, incorporates 16 bowling lanes, an arcade, sports bar, and café alongside its movie screens. Meanwhile, independent theaters can leverage their connection to local communities and partner with empathetic distributors. Independent theaters succeed by directly engaging with nearby residents and loyal moviegoers, often using social media to conduct polls and gather input that ensures their movie selections align with local audience preferences .
Ultimately, the future of movie exhibition hinges on recognizing the enduring value of the theatrical experience and adapting to the changing landscape. The antiquated notion that a national campaign is crucial for movie promotion needs to be re-evaluated. The market is fragmented, and focusing on key demographics requires targeted efforts rather than simply shuffling money between sister companies.
Theatrical releases consistently outperform straight-to-streaming movies, highlighting the importance of the big screen in creating cultural moments and driving audience engagement . Data analysis reveals that theatrical movies tend to achieve higher viewership in their streaming windows compared to movies released directly to streaming platforms . This suggests that the theatrical experience contributes value beyond immediate ticket sales by building audience awareness and creating cultural events that drive subsequent streaming engagement. Recent research indicates that 85% of moviegoers plan to attend movies as often or more often than they did in the past year, while 76% of Americans aged 12-74 saw at least one movie in theaters during the year. Among the crucial 10-24 age demographic, attending movies on opening weekend ranked as the preferred activity regardless of time and money constraints.
The movie exhibition industry is at a pivotal moment, facing both challenges and opportunities. While the rise of streaming and shifting audience preferences have created uncertainty, the core appeal of the theatrical experience – community, shared emotion, and the magic of the big screen – remains strong. The key to survival and success lies in embracing the inherent unpredictability of the industry, fostering community engagement, advocating for reasonable distribution models, and adapting to the evolving technological landscape. The divergence between large corporate chains and independent theaters presents unique opportunities for each. Large chains can focus on premium experiences and entertainment centers, while independent theaters can leverage their local connections and offer curated programming.
The future of movie exhibition is not a foregone conclusion. It is a story yet to be written, shaped by the choices we make today. Let us embrace the uncertainty, champion the theatrical experience, and work together to ensure that the magic of the movies continues to captivate audiences for generations to come. Francesca Accinelli Domenico Del Priore Tony Franks Kevin Mitchell John Fithian A. Dale (Bud) Mayo Chuck Goldwater Shawn Dawes Christopher Small Erik Stevens Laura Peralta-Jones John Fithian Jackie Brenneman Patrick Corcoran Vincenzo GUZZO Gianluca Chakra