The Future of Moviegoing

Hi. Back in your inbox again today?? What’s happening. I’ve thought about the below for some time. What’s the future of moviegoing, and how is the industry adapting?

Since the cinema industry’s biggest event, CinemaCon kicks off next week, I wanted this out the door before that.

By the way, I’ll be in Vegas for CinemaCon. If you’re going reach out!

Thanks for your continued support.

– Martin

Key Takeaways

• The theatrical experience is evolving from a routine activity to a premium, occasional indulgence.

• Mid-tier films are economically unsustainable in theaters but essential for audience diversity.

• Success metrics must shift from attendance frequency to value-per-visit and experiential quality.

• Digital natives require new engagement strategies that bridge physical venues with online communities.

• Recovery is a myth – only strategic reconfiguration will create a sustainable cinema industry.

After two decades in the cinema industry, I've recently stepped away to gain perspective. Viewing the industry from the outside gives a refreshed perspective. I love the movie industry, and I want it to find a sustainable, successful path forward.

At the same time, many of the conversations in the industry seem to still orient towards recovery. Every year since the pandemic was supposed to be the comeback year.

It’s time to move beyond that. The future of moviegoing is not about chasing recovery of things once had. It’s about accepting a permanent shift that demands reconfiguration.

The pandemic didn't just interrupt moviegoing habits; it accelerated and cemented changes that were already underway.

As an industry, this presents a choice: We can comfort ourselves with positive survey data from existing moviegoers, ignoring the obvious pattern shifts and the sample-bias of not surveying those that already churned out of their regular moviegoing habit.

Moviegoing has lost its momentum as a default leisure activity.

This can be a tough pill to swallow.

It doesn’t mean that it’s over for the industry. Far from.

But, it means we need to chart the path towards a future independently from the patterns of history.

From some of the industry discourse it feels like many insiders are still indexing on waiting for things to settle back after the temporary behavioral shifts of the industry. When, these shifts aren't temporary, they're permanent.

The Franchise Economy

10 out of 10 of the top grossing movies were sequels and/or had some kind of franchise IP affiliation. This makes sense from a few different perspectives.

Depending on who you ask in the cinema industry this is either a good thing, or it is the root cause of all the problems.

Let's explore:

A tentpole event film can galvanize large audiences to leave home for an "experience". These movies have the benefit of retained brand attention that can be reactivated. It's a much more efficient way to capture the required attention that leads to the attendance levels needed for the economic success. And, let's pause here for a moment to underline that last part; this is a business after all. The economically viable path will prevail.

Cinema, like any other form of content or experience, is competing in the same attention marketplace.

The Economics of Attention

The Barbie movie from a few years back was a big hit, grossing almost $1.5B. It cost $145M to produce. And the budget to capture the attention needed to make it a box office success? $150M. The math still checked out. Big profits.

But, from that we can also extrapolate the challenge of the mid tier of movies. You know, the ones that some of the surveys tells us we need more of. The ones that audiences say they would leave home for – but actually won't. The math for these types of movies with theatrical release as its primary value capture mechanism has broken down.

Consider a movie that costs $20M to produce. It's not based on existing IP. It has no fanbase to activate, no compounded attention to tap into. Assume the marketing budget required is a 1:1 ratio to the production costs. You're now sitting on a $40M cost basis on a movie where a respectable box office outcome may be $50M. But ≈50% of this is going to the theater. At a studio level you net -$15M on the movie.

Studios optimize for the business strategy with the best perceived risk vs. reward. And that's sequels and franchises. Yes, there is franchise fatigue, but new franchises will be created. They'll be sourced from new cultural centers of gravity (from comics to games to internet culture etc.). And they'll be built layer by layer, through other formats first, de-risking the inevitable launch of a tentpole.

In short, mid-tier films have been caught in an economic squeeze: high marketing costs and limited revenue potential lead to thin or negative profits, discouraging studios from making or widely releasing them.

We will swim with the current.

The Premium Experience Paradox

What separates moviegoing with stay at home viewing experiences? The physical and social experience. Rightly, the industry is doubling down on both of these components, but we also have to recognize and accept how this reconfiguration plays out:

• Investing in premium large formats and increased comfort makes it more special, more premium to see a movie in a theater. It also likely increase the ticket prices over time and contributes to reimagning moviegoing as a premium activity.

• Creating more buzz around movies – event-ising them – is attractive to younger audiences. Like the Taylor Swift concert movie screenings. But, there’s also an inherent scarcity embedded in this tactic, if there’s an event every day, then no event is special, etc.

Both tactics moves further towards the premium side of the spectrum:

It’s not a bad thing. It’s responding to the signal of the audience. But, as an industry we have to recalibrate our expectations. Doubling down on the two tactics above will not make audiences increase their attendance frequency. It probably reduces it longer term. Because it’s a pricier, premium experience.

The industry must reckon with this reality. If it says "yes" to the above, what is it saying "no" to?

The Metrics Mismatch

Increased investment will push ticket prices higher over time. A continued move towards emphasising the "premium" of moviegoing over time positions it as something different than the previous (default leisure activity). It's now a premium experience you sometimes indulge in. Not something you do twice a week.

This shift creates a fundamental contradiction in the industry's strategy. If moviegoing is increasingly a premium experience, audiences will naturally be more selective – they'll primarily turn out for the events, the spectacles, the must-see cultural moments. Continuing to eventise the experience is a force that increases franchise dependency and decreases frequency. The economics work for those few blockbuster weekends, but at the cost of consistent attendance throughout the year.

Here's where the industry's metrics are misaligned with its strategy: it doesn't make sense to still measure annual frequency as a baseline for success or growth if the very strategy being deployed incentivizes lower frequency and higher spend per visit. The industry can't simultaneously push toward premium experiences and higher ticket prices while expecting attendance patterns of the past. We need new metrics for a new reality.

The Data Tells the Story

The data is clear: five years after COVID lockdowns, theater attendance in North America remains well below pre-pandemic levels. Early 2025 box office revenues are still about one-third lower than the equivalent period in 2020 before cinemas shut down.

This shift isn't temporary. It's a fundamental reconfiguration of consumer behavior, particularly among younger demographics who have grown up in digital environments where content is expected to be on-demand, personalized, and accessible.

Generational Gaps

What else has changed since 2020? The “younger audiences” we so passionately want to attract have aged up, and become an even larger share of the “realistically adressable market” for moviegoing. So, the impact of their behaviours and preferences is more amplified in 2025.

For instance: this audience segment live increasingly digital lives. Their social connections are often formed and maintained online. Virtual friendships and digital communities hold as much value for them as physical ones did for previous generations. This fundamentally changes the social value proposition of cinema.

When socializing via Roblox or gaming platforms is the norm, the traditional "night out at the movies with friends" holds less unique appeal.

This shift also reveals a critical disconnect in how the industry reaches these audiences. Traditional marketing channels and customer journeys are increasingly obsolete. The attention of younger demographics exists in digital spaces – on TikTok, in gaming environments, and across social platforms.

Cinema marketing must integrate with these new realities rather than relying on old patterns. Trailers on YouTube aren't enough; the industry needs to become part of the conversation where digital natives actually spend their time and make their entertainment decisions.

Every year, this gap will grow wider, and the effects of continuing to deploy legacy marketing tactics will decrease.

Moving Beyond Recovery

The industry can't repeat the same recovery narrative in 2025. 2026. 2027. And so on. The path forward isn't about waiting for things to return to normal. It's about embracing a new normal – one where theaters transform into premium event destinations rather than routine entertainment venues.

If every strong quarter or holiday season is touted as a "turning point" while fundamental trends (like audience fragmentation and reduced midweek attendance) don't improve, the industry risks kicking the can down the road instead of adapting. This cycle of false dawns masks the deeper structural changes that require real innovation, not just optimistic interpretations of temporary spikes.

What we're witnessing isn't unique to cinema. It mirrors transformations in other media industries – from music's pivot from CD sales to streaming and live events, to television's evolution from scheduled programming to on-demand libraries. In each case, the core product still exists, but the delivery mechanism and economic model have fundamentally changed.

Reconfiguring for the Future

The cinema industry will survive, but only through adaptation, not mere recovery. That means doubling down on what makes the theatrical experience unique – the communal spectacle that can't be replicated at home – while finding new revenue streams beyond traditional ticket sales.

It also means understanding that for digital natives, engagement must bridge physical and virtual worlds. Theaters might explore interactive elements that connect to social platforms, create shareable moments, or integrate digital communities into the physical experience. The challenge isn't just getting younger audiences into theaters; it's making theaters relevant to their hybridized social lives where the boundaries between online and offline continuously blur.

The future of cinema isn't about recovering what was lost. It's about reconfiguring for what comes next.

As always, reach out to me if you have feedback or are working on something cool you want to discuss. (X, Farcaster, LinkedIn)