By Michael O’Leary
President & CEO, National Association of Theatre Owners
As we enter the final weeks of the summer season, this is a moment to take stock of where the theatrical exhibition business stands and how we have performed against the expectations that were set in January. While predictions are always that the sky is falling for theatrical, the truth is that our industry continues to demonstrate adaptability and resilience–amidst wholesale reinvention and change in the entertainment industry–that should give both movie fans and investors optimism for the future.
First, we entered 2024 knowing that the 2023 labor impasse would be a temporary setback, and we responded by finding new ways to bring consumers through the doors during a difficult time. The impact of the strike was real, but it was also simply the latest hurdle for our industry to overcome. Our industry has not had a “normal” marketplace for a meaningful period in nearly five years. But the success we are seeing this summer–setting box office records for the biggest animated film of all time (Inside Out 2) and the biggest domestic R-rated movie of all time (Deadpool & Wolverine)–is a strong signal that audience loyalty endures when theatres deliver a viewing experience that can’t be found anywhere else. The release of fewer new movies was a temporary setback, not a new reality.
Second, we saw continued evidence this year that studios of all sizes are committed to the theatrical experience. Why? Because they understand that the return on investment for a single movie—both culturally and economically—cannot be realized without a robust theatrical release. This is truer than ever in our fractured media environment.
Third, young audiences–one of the most desired demographics with the most competing demands on their entertainment time–continue to enthusiastically seek out the big screen. 18-24 year olds made up 31% of Deadpool & Wolverine‘s record-setting $211 million debut, which made them the largest age group to embrace the superhero flick. For Inside Out 2, 51% of the audience was between 18-34, and the largest age group was 13-17 years old with 31%. Last year, young audiences embraced the Barbenheimer phenomenon: 18-24 year olds were the biggest part of Barbie‘s opening weekend with a 27% share, while 18-24 year olds also led all demos with 33% of Oppenheimer‘s debut. The suggestion that young people are not going to the theatre is incorrect. Like audiences of all ages, young people respond when there is something compelling to see. Through dynamic social media campaigns, movie theatres have been able to build a relationship with their customers–particularly young customers–online that creates loyalty and enthusiasm. These campaigns produce a cultural impact that no other out-of-home entertainment option can come close to matching.
Finally, it’s important to recognize that the structure of our industry is constantly changing. While there are fewer movie screens in the United States than there were a few years ago, that doesn’t tell the whole story. Many closed theatres are purchased, upgraded, and successfully re-opened. The total number has always ebbed and flowed, and that is true today as well. But the reality is that theatres are economic anchors in communities around the world, generating more spending in the restaurants and stores around them. There is so much great innovation taking place across the country to provide consumers of all ages the experiences they want. Ultimately, the marketplace will set the number of screens as it always has, but the enthusiasm for moviegoing remains strong.
As an industry, theatrical has demonstrated a resilience and consistency that make us well equipped to continue to evolve and thrive as the entire entertainment industry continues to grapple with change and reinvention.