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It’s been a rough decade for the movie theater business. First, it was hit by the pandemic in 2020 that prohibited audiences from gathering at cinemas for months. Then dual Hollywood strikes in 2023 dragged down any momentum theaters had at getting people back in seats.
Now, to offset lower attendance, movie theaters are turning to a premiumization strategy with higher ticket prices and elevated concession offerings.
Ticket sales in 2024 reached $4.8 billion as of August 1, down from year-to-date numbers seen in previous years, the Wall Street Journal reported citing data from Comscore. For comparison, at this point in 2023 box office sales were closer to $6 billion.
The decline is due in part to shifting consumer preferences since the pandemic. According to a Wall Street Journal survey, 65% of Americans prefer to watch a movie at home, compared with 35% that said they prefer to watch in a theater.
Movie theaters are also dealing with less frequent wide releases — movies shown on at least 2,000 screens — and a shorter gap between when a movie is released in theaters and is available for at-home rental.
With all these factors stacked against it, the movie theater business in now betting on pricier tickets and concession stand sales.
Ticket sales for larger premium formats like IMAX accounted for over 14% of all box office ticket sales as of the end of June 2024, according to the Wall Street Journal. In 2019, sales for these formats during the same period only accounted for 10% of sales.
Additionally, movies theaters are are elevating their concession offerings to include cocktails and items like specialty popcorn buckets.
The latest summer blockbuster shows how this strategy could be the way forward for movie theaters. Marvel’s “Deadpool & Wolverine” shattered box office records last month, leaving movie theater companies celebrating.
“It is certainly good news for those who care about AMC that with ‘Deadpool & Wolverine’ we enjoyed the highest ever attendance and highest ever admissions revenue for the opening weekend of a rated-R movie in AMC’s company history,” Adam Aron, the chairman and CEO of AMC, the largest movie theater company in the U.S., said in a press release.
Aron added that the company achieved its highest food and beverage revenue in a single weekend since 2019. “Deadpool & Wolverine” merch, including multiple popcorn buckets, also sold out.
Premium format screenings, like IMAX, accounted for 18% of the movie’s gross box office.
IMAX said its screenings of the film generated $36.5 million globally, making it its biggest July opening ever and its biggest debut weekend for an R-rated film.
Wolverine and Deadpool also broke records at Cinemark for biggest summer weekend debut, largest opening for premium formats and motion seat screenings, and highest concessions revenue since the pandemic.