The Incredible Shrinking Movie Theater

Hollywood keeps fighting the change needed in movie theaters, but it's inevitable
The real reason behind Hollywood’s miserable weekend
Hollywood had a bad Memorial Day weekend. But moviegoing has been in decline for decades.

I appreciate Peter Kafka keeping the box office implosion dramatic arc simple:

But the most obvious explanation is the one Hollywood and the people who love Hollywood are the least likely to say out loud: People aren't going to the movies like they used to. Period.

The statistics are quite clear about this: In 2002, Americans went to the movies 5.2 times a year; by 2019, that number had shrunk to 3.5 times a year.

The pandemic, of course, devastated the box office. But post-COVID, things are still lousy. The analyst and investor Matthew Ball says the average moviegoer went 2.3 times in 2023 — the same year the industry was crowing about the revival of the box office, led by "Barbie" and "Oppenheimer."

And that 2002 number is way down from earlier generations. I'm honestly not sure how much I can trust this as it's from ChatGPT – ain't our new world just grand? – but I'm going to cite it anyway as it's at least directionally accurate:

Surveys from the 1950s suggest that the average American went to the movies about once a week. According to some sources, annual attendance rates averaged around 30 to 35 visits per person per year.

From 30 to 35 times a year down to just over 2. That's a problem for the movie industry. And it has been a problem for decades. Back to Kafka:

Hollywood has been responding to the decline by raising ticket prices — they're estimated to have shot up by 20% between 2019 and 2022 — and pushing moviegoers who do want to go out to much more expensive theaters, like Imax screens. (I paid $44.76 for the two "Furiosa" tickets I bought over the weekend at my local Alamo Drafthouse. No complaints, though — I love that chain.)

They should be going the other way and cutting prices, says the Sony movie boss Tom Rothman. "It's fundamental consumer economics: just lower the prices and you'll sell more," he said in a recent interview that's generating lots of buzz in the industry...

I think price is important (obviously), but experience is arguably just as important. The days of paying ever-increasing prices to sit in a shitty AMC theater are over. Well, over once idiots stop inflating AMC's stock price for nonsense meme reasons, thus continuing to bail water out of the Titanic with a thimble. IMAX is interesting and taking over the high-end because it provides an experience you cannot get at home. The problem there is that only a few movies are truly worthy of that experience (which IMAX knows and controls). Great movie theaters, such as Drafthouse which Kafka cites, offer a unique and great experience with food and pre-game content. But that model still isn't sustaining in our current world, sadly. Hopefully someone can do it better from a business perspective.

But reality probably settles at people going to see 2 to 3 must-see spectacle movies a year (kids content potentially clouds this – but also perhaps not!) in theaters and everything else is watched at home. On your TV and perhaps for a smaller sliver of the population, your Vision Pro if you're alone and crave a theater-like experience.

The movie theater industry needs to come to terms with this eventually. They were almost forced to during COVID times. But Tom Cruise wouldn't give up. And so we're back in this weird state of limbo. Perhaps the streamers keep bailing out theaters to please the talent. But it's all just different flavors of decline just like the overpriced popcorn you're no longer buying at concession stands.

As I wrote on this general topic last year:

I’m confused why Hollywood is so confused by this. It’s almost like the pandemic delayed (or gave them an excuse to postpone) waking up to reality. There’s nuance here, but it’s also not rocket science.

Going forward, movie theaters are going to work (for the most part) for big budget spectacle films and/or some smaller scale films that are able to break through to the cultural zeitgeist. This may be because of a star or filmmaker involved. Or it may be because they’ve created enough buzz to “earn” their way to the big screen. Everything else should and will go to streaming. And that’s not the end of the world, it’s a more mass appeal platform, actually.


...because they don’t actually tout “bodies in seats”, they still rely on box office (revenue), which is beyond misleading to the public and seems to be glossing over what is actually happening in Hollywood. Take the release of Avatar 2, for example. It’s a success, sure, in large part because it’s the aforementioned spectacle film. But it’s also not nearly as successful as Hollywood would like you to believe.


1917 (like Dunkirk before it) is a prime example of a movie you should see in theaters. Black Swan is perhaps the prime example of a movie that did a great job generating buzz ahead of its launch.

Again, this is not rocket science.

Here’s something I would like to see: a movie that starts on streaming and generates enough buzz that Hollywood moves it over to theaters. Now, this will only work if the theaters are actually good theaters, something you’d want to go to on a night out. But I think this could work! We recently watched Elvis on the small screen, but probably would have gone to see it at a theater if there was the right place and time to do so — even with it streaming. See also: Glass Onion. OBVIOUSLY.

Anyway, again, I don’t understand why this is so hard for Hollywood to understand. Other than that their jobs are tied to them not understanding.

The way to save theaters is to make movies that people want to see in theaters, and to make great theaters that people want to see those movies in. It really is that simple. But Hollywood is continually serving up the wrong content for that audience. And theaters are serving up a largely shitty experience for that audience. So…

All of that remains true, but just at an increasingly smaller scale than the movie theater industry is at right now. That's sad and impossible for a lot of people around the industry to understand. But the numbers, at some point for everyone, don't lie.