The Future of Movie Theaters Will Be More Expensive

The prices of almost every platform and entertainment streaming provider have increased in recent years. Times are rough, but the specter that is inflation isn’t done wreaking havoc on the viewing public. The shocking part is that some people want it that way, willing to pay more for extra legroom and bottle service, much like first-class tickets versus economy class. Welcome to the era of luxury movie theater experiences.

The movieplex you’ve come to know and love is on the edge of extinction. Hope you saved some cash from your last paycheck because if you thought nine dollars for a small soda was highway robbery, you haven’t seen anything yet. The prevailing corporate strategy for saving movie theaters is based less on the movie than the concessions. How did we get to the point that showing movies has become a terrible investment? Unpacking the financial roller-coaster that is the modern entertainment industry takes time. However, it suffices to say that Christopher Nolan’s lasting legacy might be the oversized, obligatory recliner in every single movie theater. The revolution starts with IMAX and its unofficial brand ambassadors.

The answer to slumping profits is not more blockbusters (more seats filled) but more expensive tickets (fewer seats filled), as the artistic side of the equation is less important than the social one. A few years removed from the days of merely surviving, theaters plan for days when they can thrive by charging for whatever outrageous service they can, adapting to our jaded expectations, morphing the mundane film-going environment into a kind of Michelin-grade Dave & Busters. For those without the financial means for 100-buck-a-plate dinners, complete with imported wagyu beef and wine, you can still settle for the local multiplex with screaming babies and perpetually sticky floors … for now.

Movie Theaters Are Struggling to Stay Afloat

You’ve heard this before, but it bears repeating: movie theaters have been in severe decline for the last four years. The downward trend in profitability is not complicated; when streaming started, COVID lockdowns worsened, and inflation has only intensified. At the height of the COVID period in mid-2020, 30% of theaters were estimated to have been shuttered. They never recovered. When provided the opportunity to watch from home, consumers took the option to stay on the couch and haven’t looked back.

There is no longer any money to be made by simply showing movies. Yes, Top Gun: Maverick, Barbie, and Oppenheimer made huge waves in 2023. They were anomalies. In 2024, chains are struggling to keep their heads above water, with several staring down bankruptcy as the average person is no longer inclined to trudge to a theater for a basic movie-watching excursion, and the traditional movie chain is no longer viable. It could be worse. At least you didn’t invest in Regal Cinemas. According to CNN, most of those poor suckers lost every dime they put in. The solution is drastic but obvious. Give the people what they want: quality, not quantity.

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The Christoper Nolanization of Movie Watching

Out are modest-sized theaters, and in are 125-foot wide screens showing 70mm prints, decked out with titanic audio systems that are loud enough to register on seismic instruments. The face of the stagnant business model is aware. Regal Cinemas and AMC’s websites are evidence that the world of movies is transforming in front of our eyes, promising recliners, drink holders, servers, and adequate sight lines just like you’d get at home, guaranteeing to immerse you in every explosion and CGI-drenched set piece. Those websites are less specific when it comes to listing their prices.

Thank Christopher Nolan. Whether he realized it or not, he has altered the industry in ways far beyond the mere art of directing. Nolan has gone on record as being enamored with the innovations in movie tech, yet he still sticks with old-school film stock, usually the extra-wide IMAX film. When his blockbuster Oppenheimer came out last summer, he told the Associated Press that there was never an option when making any of his recent films, whether Tenet or Oppenheimer.

Anything short would be doing the film and audience a disservice, he intimated. No one is a bigger fan of Nolan than IMAX theaters, and the love is mutual. Right now, IMAX is basically the only part of the theater business that is working. To be more exact, it is booming beyond their wildest dreams. “About 20 percent of screens — increasingly, experiences like IMAX that make it special and worthwhile — generate 80 percent of the business,” says Richard Gelfond, the CEO of IMAX, told The New York Times in 2022. “Except in unique cases, nobody needs a 20-plex anymore.” One problem. The majority of theaters in the world are not in any way equipped to show these films, needing expensive upgrades, larger facilities, and a lot of money for investment. Money that is evaporating as theaters wither in the changing times. Needless to say, that will change.

What Will Happen to Smaller Theaters?

If you thought that shelling out $50 bucks for two people and a few snacks at a theater was extreme, you are in the minority. Those with good memories might recall a spate of films that were supposed to be released in 2020. Wonder Woman 1984, No Time to Die, and the aforementioned Top Gun: Maverick were all delayed until they could get a proper showing in front of large theater crowds. Execs weren’t being fickle; this is because theaters bring in way more cash than from streaming. For reasons too complicated to explain, streaming is a terrible source of making money for blockbusters. There is no summer event flick without massive sales and wide distribution internationally.

You only need to ask the movie theater operators and chains for the unvarnished truth. There are way too many theaters, and a good chunk lose money on redundant screens. David Ownby, the ex-Chief Financial Officer of Regal Entertainment, didn’t hold back in 2021, confiding to CNBC that the market was oversaturated. Not only was the entire industry due for a shakeup and violent cut in the number of theaters, but he highlighted the necessary revolutionary alteration in what the theaters themselves would look like in five years:

The recent trends in customer preferences only reinforce Ownby’s take from three years ago. People don’t mind spending more on a substantially more comfy, decadent night out for a “premium screen.” Great news for movie industry insiders and cinema employees, but terrible for anybody who just wants to watch a movie.

There will be other casualties. Along with the large movie chains that show four or five different films, packing in viewers elbow to elbow, local movie theaters—attached to so-called obsolete “zombie malls”—are also on the chopping block. With the shift toward movies as a social event, the days of your quaint neighborhood theater with its tennis-court-sized screen and stale Jujubes could be a thing of the past.