Theaters aren’t dead yet, but if they don’t start looking at the trends, they will go the way of the drive-in.
I have a nostalgic love for Drive In Theaters. From 1947 to 1954, five hundred new theaters opened every year. By 1958, there were more than 4000 Drive-Ins in America. That number held pretty stead through 1970 and then began a precipitous downfall over the next two decades. Now there are less than 300 Drive-Ins left. There were many factors that led to the demise of the Drive-In. But three are relevant to whatâs happening to theaters today.
In America, car culture peaked in the 1960s. People were in love with their cars. They were big and comfortable, often with front seats that resembled the living room sofa. Drive-ins offered a level of privacy you didnât get in the theater. People often went to the movie to âmake out.â
Americans had a love affair with their cars. People did everything behind the wheel. Drive-in diners were all the rage, and cruising was an acceptable way of spending an evening. The Drive-In was a chance to show off your investment in all that shiney steel.
But with the oil crisis in the 70s the floating living room of the 60s led to the fuel efficient econobox. Compact Japanese cars started filling up the highways. A Honda CVCC is not exactly the most inviting environment to spend four hours watching a double feature.
Today, different cultural shifts are happening. People spend more time at home than ever. Friend networks are often virtual and geographically dispersed. And attention spans are shorter than theyâve ever been. All of these things create cultural headwinds for movie theaters. Image courtesy of Barn Finds
The 70s also saw a shift from Main Street to suburban living and the mall society, which gave rise to the multiplex theater.
“The decline of the drive-in was directly related to the movement away from Main Street America and towards the mall society, where convenience, times, weather and the idea of ‘all-inclusive’ became the popular way to enjoy a night out, pushing away the classic night out at the drive-in,” said John Stefanopoulos, the manager of the Hudson Valley Four Brother’s Drive-In in an interview with FOX Business. âMore variety, the convenience of timing and shopping all in one and more focus on the movie itself rather than the experience was what the movie-goer demanded, and the mall society provided just that.â
Today, entire entertainment districts woo people with an endless variety of options. Theaters have tried to respond with dine-in options to make the movie more of an occasion, but the food offerings rarely live up to the instagrammable offerings the younger generations crave.
In the 1970s sound design took over Hollywood. Earthquake, in âSensurround,â used subwoofers so audiences could feel the shaking. Dolby stereo was introduced in the late 70s with Francis Ford Coppolaâs Apocalypse Now. The arrival of HBO and VHS brought stereo sound into the homes. Those little metal boxes we hung on the windows just could not keep up with the sound experience in theaters, or even at home.
Special effect driven movies like Star Wars in 1977 made the screen more important. Ambient light washed out drive-in screens, and the distance away from the car diminished the impact of the visual images. This began the long road to more immersive movie experiences.
Today, streaming services, virtual reality, video games, immersive theater, and a host of other interactive and immersive experiences make a night at the movie a pedestrian option.
If you listen to many of todayâs theater owners, you can hear the denial. At the most recent Cinemacon convention in Las Vegas this month, the mantra was back to âwe need longer exclusive exhibition windows for new releases.â Like going back to the pre-pandemic practices are going to make everything OK. Itâs a refusal to acknowledge that there have been seismic shifts in consumer behavior. Maybe we need to show them some statistics, in Sensurround, to shake some sense into them.
The ârelease windowâ, the average number of days before a movie is available outside of theaters, fell from 76 in 2022 to 54 last year. That shift is estimated to have cost US cinemas up to $130 million a year according to researchers for The Numbers Business.
If you take the $130 million and divide it by the 40,000 screens in America, it comes to $3200 per screen. Thatâs $62 per day, about the price of a large popcorn and a couple of sodas. Hardly the death knell that theater owners want to believe. The real culprit is shifting consumer demand.
Those 40,000 U.S. screens are down about 7% since 2019. In conversations with theater owners last year, I was told they think up to 18% of their screens are âexcess capacity.â Thatâs another 7200 screens needing to be shuttered or repurposed. Within a decade, we could see the number of movie screens cut in half from the height of the market. This is what happened to drive-ins, but for some reason nobody wants to believe that history might be repeating itself.
Movie theater attendance is down 40% from 2019, according to AMC Theatres. The average person sees 1.8 movies a year, down from 5 in 2020. Premium large format (like IMAX) account for 1/5th of the box office, up 33% since the pandemic.
This is whatâs propping up the box office totals while attendance plummets. People are going less frequently, and are willing to pay for a more immersive experience. Instead of hoping for a return of the business practices of the past, theater owners need to begin innovating to meet consumer demand and maintain relevance.
Taylor Swiftâs Eras concert video earned $261 million at the box office. And while her direct distribution deal with theaters raised industry eyebrows, it was the fan behaviour that caused the real stir.
Swifties behaved as if they were at a live concert. People who arrived thinking they were seeing a movie were shocked and appalled. And since then, itâs happened again, and again. Last yearâs Wicked movie had fans flocking to theaters (something youâd think owners would encourage) but when they showed up in costume, including green face paint to look like Elphaba, they were denied entry due to âsafety concerns.â
The on-screen advisory says âAt AMC Theatres, silence is golden. No talking. No texting. No singing. No wailing. No flirting. And absolutely no name-calling. Enjoy the magic of movies.â They might as well add at the end⊠âAt Home!â
Some cinemas saw the opportunity and created special âsing alongâ screenings to capitalize on the opportunity. Maybe they remember the Rocky Horror Picture Show phenomena, where fans would return to the theater dozens of times for the immersive, interactive nature of that movieâs participatory experience.
Last week it happened again. Jack Blackâs Minecraft movie dropped and fan mayhem went to another level.
As of this writing, Minecraft has topped $700 million globally, and is on the way to break the billion dollar mark. Now, I am not condoning destructive, or even disruptive behavior. I am pointing out that behaviors are shifting. In my mind thatâs called an opportunity. Younger audiences want more than the 100-year-old âshared experienceâ of sitting in a dark room for two hours. They want to be on their phones, taking videos and photos, and sharing them on social media.
I gave a keynote at the Giant Screen Cinema Association conference in 2020 on innovation. One of the practices I introduced to the audience was identifying Sacred Cows. In the QA, someone asked me to expand on that idea. I gave the example of forcing people to turn off their phones and be quiet during the movies. Classic sacred cow. According to Nielsen, 88% of Americans use a second screen when viewing media. I dared them to look at what would be possible if they were not bound by that convention. The debate that followed was lively. I wonder what theyâre thinking today.
Movies arenât dead. Yet. But if theater owners donât start to listen to audiences, they are destined to go the way of the Drive-In. Audiences have evolved faster than the movie industry. 80% of movie goers grew up with video games, which have already eclipsed Hollywood box office in annual revenue. Video games have become an excellent medium for storytelling. Some of the best and most popular movies and TV shows are spinoffs from games.
While the Minecraft movie is unlikely to win an academy award for best screenplay, HBOâs The Last of Us, based on the PlayStation game, won 8 Emmyâs in its first season. And Netflix’s animated League of Legends show, Arcane, previously won four Emmys. Last year, Primeâs Fallout series (best. game. ever) was nominated for 16 Emmy awards.
When the XBOX first came out, one of the launch titles was Oddworld: Munchâs Oddysee. My kids, who were 7, 6 and 4, would beg me to play so they could watch the game and see how the story and its characters would unfold. Thatâs when I realized that video games had become a legitimate storytelling medium. They would rather watch me play a game than anything on television.
One of the other mantras from the CinemaCon crowd is that people love the âshared experienceâ of moviegoing. And for a century that was probably true. Todayâs audiences want more than a shared experience. They donât want to be shushed for talking to the person they came with. People want a social experience.
When we watch a movie at home, we have a pause button. We can stop the action and talk about whatâs happening. We can chat with friends on our phones. We can share thoughts on social media. We can look up facts about what we are watching. In the movie theater of today, try that and you might get kicked out.
This is why immersive theater is exploding in popularity. Itâs also why large-scale free-roam VR experiences are going to be the Next Big Thing. Itâs already happening in China, where more than 100 new projects launched in 2024. And itâs why I am building in this space now.
