Have Movie Theaters Gotten Their Mojo Back?

Toby Emmerich
Photo by Matt Winkelmeyer/Getty
Matthew Belloni
April 24, 2022

There’s an interesting debate going on at Warner Bros. right now. They’ve got Batgirl, a $70 million-ish film that just finished shooting, and the plan under former WarnerMedia C.E.O. Jason Kilar was to release it directly on HBO Max. Kilar’s singular mission, as anyone who walked the lot with him knows, was to build up the streaming service to compete with Netflix, the north star of the entertainment industry, even if it meant shrinking—sorry, evolving—the century-old theatrical business. So debuting on HBO Max a mid-budget DC movie, one based on a known but untested character who already stars in a TV show, made perfect sense.

But maybe, Toby Emmerich and his Warners team are thinking, now is the time to invest a bit more money into Batgirl, perhaps up the visual effects and the music budget and the planned marketing spend, and give the movie a theatrical run first? After all, it’s a new day under Warner Bros. Discovery C.E.O. David Zaslav. The Batman, admittedly the company’s marquee superhero property, is putting up huge numbers on Max, I’m told, even after generating $750 million in theaters over 45 days (or, perhaps, because it generated those numbers). And, more importantly, the Great Netflix Correction of ‘22 is causing Warners and all of Hollywood to rethink the “all-in” strategy for streaming.

No, these studios aren’t suddenly flipping the streaming switch to off, nor should they. Streaming remains the potential growth engine, and the future of the industry. But for certain titles, the streaming-vs-theatrical debate has taken a turn. Like maybe Pixar’s Turning Red should have generated a few hundred million bucks for Disney, and then become a huge hit on Disney+, just like Encanto did. Or maybe Sony should take a few more swings in theaters rather than dumping anything that isn’t pre-branded on a streamer. If Netflix can no longer reliably grow by spending about $20 billion a year on content, maybe no film studio should be throwing the kitchen sink at their service without first generating a little more cash in theaters. We know Zaslav thinks that way. He said, “we plan on being careful and judicious” in streaming. Gunnar Wiedenfels, Zaslav’s C.F.O. and hatchet man, went further, vowing a “conservative approach.”

After all, if a streaming-only company like Netflix can slide from a $300 billion market cap to less than $100 billion in six months, what does that mean for the other companies that have bet their future on the notion that there is a billion-person market for digital consumers? One film producer told me this week that two of his projects initially conceived as streaming-only were now being debated as theatrical. Paramount, fresh from four strong box office openings in a row, with Top Gun: Maverick coming next month, has signaled to the community in recent weeks that it is re-committing to theatrical. Universal is sticking to a day-and-date strategy for Blumhouse’s Firestarter reboot next month, and it will continue to experiment with non-tentpole titles, but at this point those moves seem like the outliers.


So, are movie theaters back, baby? No. And yes. And also kinda no. Box office will still be way down this year compared to 2019, and the long-term prospects of the exhibition business are still potentially calamitous. We’re talking here about a small subset of the movies that used to have a chance in theaters, and may still. The rest will increasingly go to streamers, if they get made at all. But the Sunday numbers seem to be getting better each week, while the questions around the economics of streaming grow louder and louder. It’s not quite a reversal of fortune, but it’s definitely a vibe shift.

A new study that I was slipped (it will be released publicly tomorrow) confirms this sentiment. David Herrin’s film research firm, The Quorum, along with the research, strategy and creative agency Fanthropology, and Linda Ong’s consultancy Cultique, polled the general public and found their willingness to return to theaters is rising significantly. Specifically, “casual” moviegoers increased from 18 percent of moviegoers in October to 31 percent in the new study. That’s a 73 percent jump, making casual filmgoers the biggest category of moviegoers overall. Moviegoing “hopefuls”—meaning those sitting on the sidelines who have yet to return to theaters—shrank from 33 percent to 18 percent, a 45 percent drop. 

This is the same team that got a lot of attention in November, amid the Omicron surge, for a survey that found that 8 percent of moviegoers were likely “lost forever.” That may still be the case, and all the critiques of theaters are still there—rising ticket and food prices, outdated theaters, obnoxious audiences, generational shifts toward gaming and streaming. “But there’s a swath of people who are no longer sitting on the sidelines,” Herrin told me today.

A couple other insights here:

  • Improving sentiments: Overall, 70 percent of respondents say they would be upset if theaters disappeared, that’s up significantly from October. 

  • Rewards programs work: Incentives lead to higher attendance and more money spent, but only 37 percent of people use them. So there’s lots of room for growth here, if theaters are willing to get creative.

  • Inflation matters: About half (52 percent) of respondents say inflation is causing them to go to theaters less often. Not great.   

  • Still, people want premium: Theaters are in a tough spot because they must appeal to both premium and budget consumers. But 47 percent of respondents say they want a premium experience (like reclining seats, better food, IMAX, or no commercials), 40 percent want a regular experience, and just 13 percent want a “budget” experience. That leaves a lot of potential upside. “They need to treat film-going the same as going to a sporting event or a concert,” Herrin told me. That means merch, or maybe organized tailgating before an event movie like Spider-Man, or gourmet concessions tied to the Marvel titles.

That last point is a good one. My buddy Adam Aron, the C.E.O. of meme stock AMC Theaters, got some nice press this week for announcing a big upgrade to theaters, which will be outfitted with laser projection. Good for AMC; still, most moviegoers don’t really notice that stuff. They want the experience to improve, which creates the value proposition for leaving the home and going to the theater. The stuff that Herrin is talking about is what ultimately distinguishes the experience.

I’m going to the Cinemacon conference for theater owners in Las Vegas this week, and I’m betting there will be very little talk about this experience. It’s usually all about which plane Tom Cruise jumps out of or how many Marvel or Jurassic World movies are coming this summer. Yet experience seems to be a dominant factor in how people perceive movies. Another study this week showed that 68 percent of people think movies in theaters are “better.” In survey after survey, Herrin told me, Netflix titles always score lowest in terms of the “awareness” and “interest” in seeing a follow-up movie. It’s not because the Netflix movies are that much worse (although many would argue they are). It’s about how we experience these movies. And the passive, forgettable experience of the digital content farm is a huge problem for Netflix, which, above all else, is spending billions to create properties that people care about. It’s also a big advantage for movie theaters, and for the studios that may want to think twice about whether they put their movies there or not.

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