The rise of Streaming TV has radically disrupted the traditional ways of delivering and consuming entertainment, creating new challenges and opportunities for the industry.
As more viewers flock to the convenience, control, and variety of online platforms, movie theaters face an uncertain future that will be shaped by their ability to adapt and innovate.
The supply and demand cycle of movies is affected by production delays, rising costs, and shifting tastes. It is clear that, at the very least, a smaller number of movies will be available for theaters in the long term.
This trend will heavily impact the theatrical releases of mid-budget movies, mostly genre films that are not based on existing franchises or intellectual property with production costs ranging from $5 million to $75 million.
How Hollywood Became A Franchise Factory
In recent years, creativity has been squeezed out of movie theaters as original stories that are not adaptations, sequels, prequels, remakes, or spin-offs of other works have become increasingly rare.
Mid-budget movies offer more creative freedom, diversity, and risk-taking than big-budget blockbusters which rely on familiar brands and formulas to appeal to mass audiences.
As they face fierce competition from streaming services, TV shows, low-budget and horror films, the value proposition of movie theaters is in jeopardy.
The Shrinking Gap Between Theatrical And Streaming Releases
Meanwhile, the release strategies of studios are narrowing the window between when films are released in theaters and when they are available on streaming services, prompting many viewers to skip the theater and endure an increasingly shorter waiting period.
In some cases, viewers don’t have to wait at all because the films are available on streaming at the same time they are released in theaters, giving them more flexibility and convenience to watch the movies when and where they want.
It can be credibly argued that the new release formulas undermine not only movie theaters but also the cinematic experience and value of the film industry itself.
Struggling with less exclusive content to fill their seats, movie theaters need to pivot, evolve, and embrace innovation or they will continue to be marginalized.
Luxury Cinemas Are Luring Moviegoers Back To The Big Screen
Toward that end, new, premium movie theaters are now enticing viewers to return to their venues by offering online reserved seating, high-backed leather executive chairs with armrests and footrests, the latest in digital sound, 3D technology, and super-wide screens.
These tactics are helping them attract and retain customers who are looking for a destination viewing experience, that transcends the limited supply of exclusive original films.
By tapping into the emotions of the viewers themselves with an exclusive VIP offering, movie theaters can differentiate themselves from other entertainment options and justify higher ticket prices while enhancing the overall movie-going experience and attracting more patrons.
The appeal here isn’t content-dependent because it’s about the place where movies are consumed. For the same reason we choose to go to a high-end restaurant when we can cook at home, If they can provide a superior experience compared to home theaters, more viewers will trade their couches for a cinematic adventure on the town.
Adding adult beverages and restaurant-level food will help movie theaters increase revenue from concessions and justify higher ticket prices while enhancing the overall movie-going experience and attracting more patrons.
The Best Way To Predict The Future Is To Invent It
It will also behoove movie theaters to create more community engagement and niche appeal, such as hosting festivals, events, screenings, and discussions for specific groups or genres that celebrate the social aspects of the experience.
Appealing to younger generations, such as millennials and Gen Z, who are more likely to go to theaters for social reasons, will be crucial to recruiting the next generation of moviegoers.
At the same time, it can appeal to older generations, such as baby boomers and Gen X, who are more inclined to visit theaters for nostalgic reasons that evoke the movie experience of their childhood.
Finally, accommodating families with children, who are more likely to go to theaters to get out of the house will be crucial to ensuring the industry’s future in the streaming age. And since animated and family-friendly blockbusters are still available, they are a huge draw for movie nights with the kids.
Even so, with studios delaying or selling some of their films to streamers due to the uncertainty of the box office performance, the future of movie theaters is not doomed but it is also not guaranteed.
Therefore, movie theaters will need to adapt quickly to the changing preferences and behaviors of their audiences, as well as compete with the convenience and content variety of streaming platforms.
While there is still a demand for the cinematic experience, it may not be enough to sustain the traditional business model of movie theaters.
They will need to accelerate innovation and continue to invent new ways to offer more value to their customers that cannot be replicated at home.
SWOT Report is now Business Intelligence Weekly. The creator and journalist behind the digital publication, Andrew Ellenberg, is President & Managing Partner of Rise Integrated, an innovative studio that creates, produces, and distributes original multimedia content across digital touchpoints. To submit story ideas or ask about custom multimedia publishing, call 816-506-1257, email [email protected], or read more of his work in Forbes. To learn about his company check out this profile story.