Movie Theater Decline

Movie theaters have been a staple in American entertainment and the world for over a century, showing the latest offerings of Hollywood. But over the past five years, movie theaters have seen a rapid decline in attendance due to the COVID-19 pandemic and the ever-increasing number of streaming services and content. 

            The birth of summer blockbuster films, like Steven Spielberg’s 1975 Jaws, and the more recent release of films during the winter season propelled Hollywood to movie screens in towns, large and small, across America.

            “There has been a lot of hype about the next disruption, yet we never die but remain a strong business in the face of disruption everywhere else in the entertainment landscape,” MPAA chief John Fithian said. 

            The explosive expansion of streaming services is arguably the biggest factor contributing to the drop in movie theater attendance. Viewers may access enormous collections of movies and television shows with only a few clicks on platforms like Netflix, Hulu, Amazon Prime Video, and Disney+. 

In order to eliminate the need to visit a theater to see the newest release, streaming services have also adopted a "day-and-date" release strategy, in which movies are released on the same day on streaming services and in theaters. 

            “It’s hard for movie theaters to compete with these streaming services when you can just stay home on your couch and watch a new movie without having to do anything else,” NHS senior Evan Cowley said. 

            Streaming services have been competition for viewers for the movies, but the overall movie theater experience has changed as well. Concern over movie ticket prices has grown, especially among families.

 Many people consider going to the movies to be a luxury because the average ticket plus refreshments may cost up to $50. Furthermore, the conventional theater experience now seems less desirable compared to the increasing quality and cost of home theater installations. 

Notably, movie theaters are still drawing in large numbers of people through premium formats like “IMAX” despite their considerably higher cost compared to a regular ticket, which still keeps some people from attending. 

“I think the IMAX theatres at the movies just provide such a big screen to see a movie that you don’t necessarily have at home which draws lots of people for those blockbuster movies, “NHS senior Sam Guigio said. 

            Bigger-budget films run a greater chance of failing at the box office if they don't do extremely well, even though they may draw larger audiences in the contemporary movie theater environment because of the high production and marketing expenditures, which require a large number of tickets to be sold in order to break even.

            Given their high production and marketing expenses, big-budget movies need a lot of ticket sales to cover their expenditures and turn a profit. When a high-budget film doesn't do well, it may become a "box office bomb," meaning that the total expenses of production, marketing, and distribution will be greater than the earnings. Big-budget film success frequently depends on effective marketing strategies and the capacity to captivate viewers, especially those looking for an upscale cinematic experience. Films such as Star Wars: The Force Awakens ($447 million) and Avatar ($350-$450 million) broke previous records for production costs. Kevin Reynolds’s 1995 film, Waterworld, was the most expensive film ever made at the time and never recouped its massive production costs.

            For entertainment distributors, the combination of digital platform analytics and conventional box office analysis has produced exciting new options. In addition to ticket sales statistics, social media engagement, streaming popularity, and online search trends now offer a comprehensive picture of audience interest and content performance. 

            With studios producing platform-specific content that makes use of real-time audience response, platforms like Instagram and TikTok have become essential components of film marketing strategy. Movie theaters can now draw in different kinds of people for specific movies which could help movie theatre performance in the future. 

            “I think movie theaters have a unique opportunity to market to more people worldwide through these social media platforms, which can help movie theaters draw in more people to see more movies,” NHS senior Theo Anderson said.