Movie Theaters: A New Dawn
Movie Theaters: A New Dawn

From the makers of “Print Journalism Smells Delicious” and “But Do You Even Listen to Vinyl, Bro?”

Though Hollywood is still in denial for the most part, box office numbers have been steadily diminishing, and the multiplex kingdom of yore is falling, not with a bang, but a slow, drawn-out whimper. Netflix, Amazon, Google and other PVOD platforms are making video accessible from the comfort of your living room—at much less cost than AMC or Regal.

The process is triggering PTSD for print journalists and the Rob Gordon wannabes of yore. Time and again, digital platforms have pulled the rug out from under their physical counterparts from magazines to retail, and many of those digital platforms are now heralding the coming demise of movie theaters.

But though we may be naïve, burying our hands in the feel of wet popcorn and the holding the boom of surround sound explosions deep in our chests, we don’t think it’s time to roll the credits on movie theaters quite yet … at least not all of them.

Why Are Movie Theaters “Dying”?

The nuance of the reasons cited vary across media, but in essence, these six omens say the end is nigh:

  • Home theater equipment continues to improve at lower costs.
  • Box office numbers are dwindling as production budgets become more bloated.
  • PVOD services such as Netflix, Amazon and Google offer cheaper, more convenient options for viewing videos, and their content is largely data driven to success where the film industry is still operating largely on expert assumption.
  • Those PVOD services are in negotiations with studios to release videos on their platforms simultaneously with theatrical releases, undermining the exclusivity argument for theaters.
  • Long-form, quality, “binge-worthy” content has become the most popular narrative format where movies were once the “high art” of the equation. PVOD platforms are more conducive to this long-form content, though arguably the Marvel and Star Wars franchises are applying a big screen version.
  • Chinese markets that are currently keeping some of the budgets alive are looking to make their film industry local, which means that well of money is drying up.

Moreover, according to Nick Bilton in this article from Vanity Fair:

When I ask people in Hollywood if they fear [industry disruption], their response is generally one of defiance. Film executives are smart and nimble, but many also assert that what they do is so specialized that it can't be compared to the sea changes in other disrupted media. 'We're different,' one producer recently told me. 'No one can do what we do.'

The attitude that things can go on as they have been will certainly sink like the Titanic. The days of Titanic being a major, must-see event in and of itself are through. There are too many experiences competing for our attention, and we just aren’t going to make the effort for stale, overpriced popcorn, dirty seats and a loud kid sitting four rows back. Spoiler alert: like Rose, the industry needs to let go if it’s going to save itself.

So What Makes Movie Theaters Special? Print Newspapers, Toys ‘R’ Us & Record Stores All Went Down When This Happened to Them.

The truth is, print journalism, books, brick-and-mortar retail, and “the music industry” didn’t die, they downsized, they changed, they evolved to complement changing standards and ultimately found ways to stay, albeit in different forms and sometimes only for a niche audience.

But we don’t think movie theaters will downsize quite to that extent. Because while movie studios might be the record stores in this scenario, movie theaters aren’t the CDs. They’re more like the concerts when done right, and at-home video just isn’t “the same” as seeing it on the big screen.

As Sherri Duran says:

The magic of movies has never been about exclusive content. It’s always been about the larger-than-life screen, the killer sound system, the in-the-dark, popcorn-munching, drink-sipping, people-shushing experience.

How Should Movie Theater Brands Evolve?

In short, by focusing on the experience. But our people had further insight into what that means:

Some of us felt movie theaters should focus on social viewing experiences.

The Alamo Drafthouse leans hard into the ‘experience’ thing, with quote-alongs, music video sing-alongs, celebrity Q&A's, prop-enhanced screenings and screenings where you listen to comedians mocking the movie. I've had plenty of experiences here that transcended ‘watching a movie’ and became life-long memories. I would have had fun watching Scott Pilgrim either way, but getting to high-five Edgar Wright before the lights went down made it a lot more special.

I find so many of these commentaries on the state of the film industry are looking for the next technological breakthrough or disruptive business model that will change/save everything. I agree that just showing movies can't be enough in the long run, but I think theater chains can do a lot to stay relevant if they approach every screening not as an individualized experience but as a social event. How do you make going to the movies fun enough for groups of families and groups of friends that it's better than staying in? – Tim Herr

Theater chains aren't new to the experiential model, but frequently these are more along the lines of ‘gimmicks’ (smell-o-vision anyone?) instead of actual improvements to what it means to go to the movies.

Millennials and Gen-Z are all about the ‘Experience.’ If movie theaters don't want to be added as another entry on a listicle about ‘industries millennials killed’ in future, then they need to shift their focus to improving [the theater experience]. – Alexandra Bohannon

I think people will always want a reason to get out of the house. To go on dates, to meet with people, to be entertained without having to pick the popcorn kernels out of their couches. Movie theater chains like AMC need to take a page out of books like the Alamo Drafthouse – a chain that is expanding as people are saying theaters are on the way out.

What Alamo gets that many movie theaters don't is that people DO love movies. Even if they are just casually into it, if a theater goes a little out of the way to make it an EXPERIENCE, the crowds will come. For example, I have seen The Rock a hundred times. But I paid for tickets, beer and food to go see it in the theater again when Alamo Drafthouse screened it with live pyrotechnics. – Ryan Winkler Herr

Others felt there was room for improvement in the physical spaces.

How about fixing some of the other obvious parts of the experience. In today's world standing in line for popcorn is annoying. How about mobile ordering? How about changing the business model so that small towns don't have to put up with a 3-week engagement? – Debby Johnson

Movie theaters are here to stay. I would argue that they will continue to evolve as meeting places for more than just the big blockbusters (lounge-style seating, table dining, art house, etc.), but continue nonetheless. – Tiffany Eitzmann

Maybe it is offering local beers and food or it's a midnight showing of Rocky Horror Picture Show on Halloween, complete with props or it's hosing a community film festival showcasing the work of student filmmakers. These theaters can also be multi-purpose spaces, allowing for events and concerts that other theaters can't host, making them a cornerstone of their community and a reflection of its culture. – Meg McElhaney

There was also a lot of talk about the evolving the content itself.

It's concerning for the future of movie theaters that all the discussion around how to ‘fix’ their predicament centers around the wrapping rather than the package. The dirty secret is that movies just aren't that compelling anymore.

Television, meanwhile, is following the same pattern we've seen in other 21st century media: higher quality, smaller audience. Forget for a moment whether the experience of a theater is mind-blowing or mind-numbing—if we're talking about Homeland versus Fast and Furious 19, the theater is irrelevant. The product just isn't competitive anymore. It's feeling more and more like extended dramatic storytelling is just quite simply the better product for today's entertainment marketplace. – Henry Martin

In 2017, a theater in London held a marathon of all seven seasons of Game of Thrones. Streaming services and television are filled with original content that never hit theaters. To Henry’s point, television is no longer the lower art form. Could the world of streaming and movie theaters combine to create an immersive television experience for consumers? – Carly Jimeson

Why, oh, why has it taken the industry so long to realize that an all-Asian style cast just might work. "Crazy, Rich Asians" led the North American box office for 3 straight weeks making this one of the strongest Labor Day weekends in years. (And it's still in the top 5).

Content is not the only answer to cinemas' woes, but it's part of it. – Debby Johnson

And the movie pass model was also suggested.

A venue like the Alamo Drafthouse that makes a large chunk of money on alcohol and food sales is primed for a model like this. If you can get more butts in seats at a discounted rate, you can make it back on food and alcohol sales. – Ryan Winkler Herr

The absence of restriction on the number of movies you can see combined with the array of films Alamo Drafthouse offers is great encouragement for moviegoers to see movies they wouldn't normally be exposed to. – Bryce Ewy

What can other brands and industries take away from this discussion?

In essence, we are moving toward a world where almost anything can be accessed from your living room. By getting rid of the physical processes and costs, the price points there are lower. But you cannot hang onto the idea that in a world of increasing automation, AI, and big data that any human “expertise” is going to retain the same value.

The only thing worth leaving home for is experiences.

There isn’t much hope for yesterday’s failed product formats – if you’re still buying CDs, who are you – but there is hope for gyms, for retail spaces, and for movie theaters. Spaces, as long as they do more than sell a product, will remain wanted and relevant, even if people are visiting less often.

At least until Henry’s Virtual Worlds prediction comes true.

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