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The movie theater industry is staging a comeback. A strong summer box office is paving the way for billions of dollars in planned investments for upgrades at theaters across the country.
Cinemas have faced a tough decade so far. First, the industry was hit by the pandemic in 2020 that prohibited audiences from gathering at cinemas for months. Then, the dual Hollywood strikes in 2023 slowed down film production, stalling any momentum theaters had in getting people back in seats, especially in the earlier part of the year.
With these disruptions now mostly in the past and a strong upcoming film slate extending over the next couple of years, eight of the largest movie theater chains in North America are now planning to invest over $2.2 billion to enhance their theaters, according to the National Association of Theater Owners.
“This has been an awful three last three years, between those things, the pandemic and the labor strikes, but they seem to be behind us,” said David A. Gross, who runs the movie consultancy Franchise Entertainment Research. “They [the movie theater chains] now feel like, the business will support their investment of putting money back into the theaters and improving them.”
🔥 A hot summer box office
Several box office records were shattered this summer. Marvel’s (DIS) Deadpool & Wolverine has earned over $1.3 billion in the global box office — making it the highest-grossing R-rated film of all time. And Pixar’s Inside Out 2 broke the record for highest-grossing animated film with $1.7 billion in ticket sales.
Other films that performed well this summer include Alien: Romulus ($331 million), Twisters ($369 million), Bad Boys: Ride or Die ($403.8 million), and Despicable Me 4 ($940.9 million), according to Box Office Mojo.
And it wasn’t just blockbusters that thrived this year.
The independent film production and distribution company A24 had its best-ever opening weekend in April with Civil War — which became its second-highest-grossing film, earning $122 million.
NEON’s horror film Longlegs became its biggest domestic hit with $77 million.
“Audiences are turning out, box office levels, in the last two and a half months there, they’re getting very close to pre-pandemic box office levels,” said Gross.
🎞️ Coming soon this fall and beyond
The upcoming fall movie slate promises to be just as strong, and theater companies are optimistic that the momentum from summer will continue.
Highly anticipated films that are still coming out this year include Joker: Folie à Deux starring Joaquin Phoenix and Lady Gaga, Gladiator 2, Wicked, and Mufasa: The Lion King.
The slate for 2025 and 2026 looks strong too. NATO projects the annual domestic box office could reach $10 billion by 2025 and $11 billion in 2026.
The group predicts that Avatar: Fire and Ash, Jurassic World Rebirth, and Captain America: Brave New World will be the top-grossing films next year.
It has also already identified nine movies that could potentially earn at least $300 million in the domestic box office in 2026, including The Super Mario Bros. 2, Avengers: Doomsday, The Mandalorian & Grogu, and Toy Story 5.
“The lineup looks steady and strong again, and it looks good into 2025, and that’s what the theater owners are looking at and saying ‘we can now spend some money,’” said Gross.
🍿 More premium experiences
With a seemingly favorable upcoming movie slate set for the next couple of years, movie theater companies are now in a spot to bet on more premium experiences.
The eight companies that reported to NATO about their planned investments operate over 1,600 locations across all 50 states and Canada, encompassing more than 21,000 screens and accounting for 67% of the box office. They include the national and regional chains AMC (AMC), Regal Cinemas, Cinemark USA (CNK), Cineplex, Marcus Theatres (MCS), B&B Theatres, Harkins Theatres, and Santikos Entertainment.
NATO said these enhancements could feature cutting-edge laser projection technology, immersive sound systems, upgraded seating, and an improved selection of food and beverage offerings — including alcoholic drinks.
“Today’s consumers rightly demand the best possible experience when they visit our theatres. Operating a theatre today is a capital-intensive operation,” said NATO Executive Board Chair and CEO of B&B Theatres, Bob Bagby, in a statement. “This investment of resources is the next step in our industry’s ongoing commitment to ensuring that going to the theatre remains a unique and special experience for generations to come.”
In recent years, the industry has increasingly turned to premium offerings to try to lure audiences back and offset lower attendance.
NATO President and CEO Michael O’Leary wrote in a column in August that the industry has responded to recent setbacks “by finding new ways to bring consumers through the doors.”
That strategy seems to be paying off for now. Ticket sales for larger premium formats like IMAX (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, some movie theaters have already been benefiting from elevating their concession offerings to include cocktails and items like specialty popcorn buckets. In July, AMC reported that Deadpool & Wolverine helped it achieve its highest food and beverage revenue in a single weekend since 2019.
