The battle to revive movie theaters is on! With attendance and box office numbers struggling to bounce back post-pandemic, the industry is facing a critical question: How can we entice audiences to return to the big screen? A thought-provoking report from Bain & Co. offers some intriguing strategies.
Bain's experts, Chris Xanthakis, Nicole Magoon, and Daniel Hong, emphasize the need for a paradigm shift. They assert, "The key to success lies in premiumization, personalization, and partnerships." It's not that audiences have abandoned theaters; they simply need a compelling reason to return. But here's where it gets tricky: the report reveals a concerning trend. For two decades, theaters have battled to fill seats, and now, it's an existential crisis. As streaming subscriptions soared from 2010 to 2024, North American box office revenue took a hit. Ticket prices have remained relatively stable, but the overall cost of a visit has increased, making cinema an expensive outing for many.
The pandemic accelerated these challenges, causing release schedules to crumble and consumer habits to shift towards digital platforms. Despite half of U.S. consumers expressing a desire for more in-person events, theatrical exhibition hasn't seen a significant recovery. Major studios have reduced their wide releases, opting to fill the void with films from smaller affiliates.
Bain labels this era the "Flooded Era," where media is ubiquitous and new technologies produce a flood of 'good enough' content. In this landscape, competition is fierce, and profitability is a challenge. So, how can cinemas thrive?
The Bain report emphasizes the unique advantages of the cinema experience: immersion, spectacle, and shared experiences. However, these benefits clash with the evolving media consumption habits of audiences, who increasingly favor short-form, interactive, and digital content. To adapt, the report suggests focusing on premium experiences, community engagement, personalization, and strategic partnerships.
Creating a premium offering is crucial. The report states, "Cinema must be reframed as a premium experience, not just content." Watching a movie in theaters is an event, an experience that surpasses the cost of a concert ticket. Theaters can achieve this through premium auditoriums, exceptional service, and personalization that cannot be replicated at home.
Building a sense of community is another vital aspect. Cinemas can attract audiences by providing social spaces and hosting community events, taking inspiration from independent cinemas' film clubs, themed watch parties, and director Q&As. This community aspect extends to social media, with platforms like Instagram and TikTok, memes, video essays, podcasts, and cosplay playing a significant role. Bain's survey reveals that 64% of U.S. location-based entertainment attendees share their experiences on social media, providing valuable earned media for cinemas and studios.
In this era of content abundance, what draws audiences in? Bain suggests a combination of fresh content, new formats, and established franchises. Owning popular intellectual property (IP) is essential, as seen with the top-grossing U.S. films in 2024. However, great IP and large marketing budgets are not enough. Audiences crave novelty, as evidenced by the success of original movies, live streams, and concert films. To cater to this demand, theaters are expected to form partnerships to deliver creative content and innovative formats.
Concert movies and live sports have demonstrated alternative ways to attract audiences. Cinema executives realize they must reinvent the theater experience, and the successful ones will invest in premium, personalized offerings that cannot be duplicated at home.
And this is the part most people miss: the future of cinemas lies in embracing change, innovation, and collaboration. But will these strategies be enough to fill those empty seats? What do you think? Are there other creative solutions the industry should explore?
