Movie Theaters Face Existential Threat, Report Says – Premium Experiences Key to Revival

The future of movie theaters is hanging in the balance, according to a new report from management consulting firm Bain & Co. While the pandemic undeniably accelerated existing challenges, the industry was already grappling with declining attendance and revenue even before 2020, as consumers increasingly turned to streaming services.

The report paints a stark picture: for two decades, theaters have struggled to attract audiences, and that struggle has now become a matter of survival. North American box office revenue, adjusted for inflation, has been steadily falling since 2010, even as spending on video streaming subscriptions soared.

The Rising Cost of the Cinema Trip

It’s not just ticket prices that are keeping people away. While the cost of a movie ticket itself has remained relatively flat, the overall expense of a cinema visit – including concessions – has risen faster than inflation. This has led consumers to perceive going to the movies as an expensive outing.

“Audiences haven’t abandoned theaters; they need a more compelling reason to go,” the Bain report emphasizes. The key, experts say, lies in transforming the moviegoing experience into something that can’t be easily replicated at home.

A ‘Flooded Era’ of Content

The media landscape is now characterized by an overwhelming abundance of content, a phenomenon Bain dubs the “Flooded Era.” New technologies mean anyone can create and distribute content, but standing out from the crowd – and doing so profitably – is increasingly difficult.

In this environment, theaters need to lean into their unique strengths: “immersion, spectacle, and shared experiences.” However, these benefits are at odds with current media consumption trends, which favor short-form, interactive, and digital content.

The Path Forward: Premiumization, Personalization, and Partnerships

Bain’s recommendations center around three key strategies: premiumization, personalization, and partnerships.

Premium Experiences

The report stresses that theaters must reframe themselves as destinations offering a premium experience. This includes investing in upgraded auditoriums, enhanced service, and personalized offerings that go beyond simply showing a film.

Think beyond the standard movie theater seat. Luxury seating, enhanced sound systems, and even in-theater dining are all potential avenues for creating a more compelling experience.

Building Community

The social aspect of moviegoing is also crucial. Theaters can foster a sense of community by hosting events like film clubs, themed screenings, and Q&As with directors. Leveraging social media platforms like Instagram and TikTok to encourage sharing and discussion is also vital.

According to Bain’s 2025 media consumption survey of over 5,000 US consumers, 64% of location-based entertainment attendees share their experiences on social media – a powerful form of earned media that theaters and studios can actively support.

Content Beyond Blockbusters

While franchise films continue to dominate the box office – the top-grossing films of 2024 were overwhelmingly sequels and extensions of existing IP – novelty is key. The success of concert films and live sports screenings demonstrates that audiences are willing to return to theaters for unique and engaging content.

“Owning popular IP remains key,” the report notes, “But great IP and large marketing budgets alone don’t guarantee movie success.”

A Global Perspective

The challenges facing movie theaters aren’t limited to North America. Globally, the industry is grappling with similar issues, as streaming services gain market share and consumer habits evolve. According to data from the National Association of Theatre Owners (NATO), global box office revenue in 2023 was still below pre-pandemic levels, highlighting the widespread nature of this crisis.

The report concludes that cinema executives recognize the need for radical change. The companies that invest in premium, personalized experiences that can’t be replicated at home are the ones most likely to survive and thrive in the years to come.