The Fall of the Local Theater Industry

-Gerritt Beatty

So we heard the Avatar Fire & Ash movie was pretty good and decided to go see it. It has been a while since we went to the theater and based on current numbers from theater owners, we are not alone. Attendance nationwide is still down from the high of 1.5 billion in 2003. Yes Streaming and Covid have taken their toll on this industry. However, I would argue that there are other factors.

The theaters have been upgrading the theaters with reclining seats and easier ways to buy tickets online. The truth is that while these investments have attributed to some growth over the years, the real reason for lack of attendance boils down to one thing, the Experience.

Going out to a movie is all about the experience. That is what theaters should be providing. A good or positive experience left in the mind of the consumer will compel them to return time and time again or not. Theater owners still don't understand this for some reason. Fix this and the numbers will soar back to previous Covid highs. Let me share my experience with our recent trip to AMC in Thousand Oaks.

First of all, we had a choice between AMC TO Mall and Regal Janss theaters. Both were showing the Avatar movie. Both had reclining seats, However, the last time we were at Janss, the seats looked awful. Definitely did not pay the money upfront for quality reclining seats. The seats looked like the couch from a fraternity house. This alone determined our choice to go to AMC.

Booked the tickets online with AMC. Easy enough process showing what seats were still available. However, $70 for tickets to a movie for three people is a little ludicrous. This is after a senior discount! One good reason to be over 60. I don't know how large families justify investing that kind of money to go to see a movie that will be streaming in the very near future. Did you catch the word I used there? Investing. Everything we do in life is an investment of time and money. Investments must yield results to garner more investment in that concern or activity. If the investment does not yield adequate return, other activities or concerns will be investigated.

Is going to the theater to see Avatar going to yield more return than staying home, making your own snacks and watching on the big screen TV? This is the conundrum that the theater owners must address. Based on my experience with AMC, they have not made a strong enough case to opt for the theater.

Yes it is all about cost and content. With regards to content, 2025 saw the largest number of movies released to date. In 2025, studious released 194 movies for a total ticket haul of $8,642,180,776. At 764,000 tickets sold, it works out to be an average of $11.31 per ticket, the highest number achieved since records were kept in 1995. That's $44.5 million per movie. Not bad for the studios but they have not all released great movies so the quality of the movie is important to draw potential investors to the venue. This is probably the biggest challenge to the theaters. However, if the movie going experience is over the top, then the consumer will continue to return despite the reviews of the movie. That is why there are more than one screen and movie playing at the theater.

Let's talk about where the theater owners really make their money...

I get that costs have gone up but cutting costs at the concession stand affects the experience. I got in a HUGE line for the concession stand after we had found our seats.

Fortunately, I was a Stubs member so could move to the "Priority" line which was shorter. I am not a fan of this as you are telling your customers that they are not as valuable of a consumer as this other small percentage of consumers who have paid a small fee for the theaters ability to track their phone data. I know there were people in the other line who spent more money than me.

I bought three drinks and a popcorn. How much? Over $34!!! Highway robbery!! On top of this, I had to go to a drink machine and fill up the drinks myself. Not a terrible proposition but for a theater where just one screening room holds 191 people and only two drink machines exist, it is not a pleasurable experience. On top of that, you are clawing your way to get lids for the drinks. The staff only provides cups with a straw and butter less popcorn. You have to fill the drink and get your own butter. So why does it take so loooong to go through the concession line? How about more stations on busy days to accommodate the increase in movie goers for a movie like Avatar? Unbelievable....

To cut costs, I can see theater owners putting in machines for candy, popcorn and drinks and get rid of the concession area altogether. There will only be two machines of course and extremely long lines to use them. Stubs members can swipe their phone for access to another room where there are more machines though...

The experience of going to a movie is a package deal. From ordering the tickets, parking in the parking lot, getting through the ticket line, finding your seats, going to the concession stand, using the facilities and of course watching the movie. This entire experience has to be a good one or people will opt for staying home and watching the movie on the big screen TV. Amazon Prime has made this process pretty simple and of all the streaming services, it is probably the one I will not cancel.

The Avatar movie was looong but the cinematography was over the top. The story was good but at 3 hours 12 minutes running time, it probably could have afforded a few more scenes hit the cutting room floor. Due to the 3D aspect of the movie, going to the theater was the right choice instead of watching on the big screen TV at home. However, in the future, I think I am going to sneak in more snacks and drinks. People already do this theater owners... so you are missing out on a huge opportunity. The concession experience is a bit of a joke and not worth the time or money.

So in the area where you make the most money, you provide the worst experience. I do not have a business degree from Harvard but even I know this is not a very good business practice. Due to this, I think the lazy theater owners have instead relied on the studios to provide exceptional content to draw more people into the theaters. The stats are these. Only twenty of the 194 movies released in 2025 received a score over 70 on Yahoo Entertainment's list. That is a percentage of 10.3%. What if only 10% of the cars produced were any good. GM, Ford and Chrysler would be out of business.

As a theater owner, I do not think I would want to rely on the studio for my EBIT numbers. Movie going is a bundled commodity and if all of the components do not yield results, we will have empty theaters all over the country. In 2019, there were approximately 5,500 movie theater locations in the US, down from nearly 7,000 in 2005. This steady decline has recently accelerated; CNBC reported that as of February 2023, “since 2019, the number of total screens in the U.S. have decreased by around 3,000.. Not a good sign theater owners. You are just not getting it. Wanna stay in this business? Improve the experience and see your numbers grow. If there is $8.6 billion available in this market, I may open my own chain that provides the ultimate experience and wipe out this competition that continues to fail their customers.

Experience.. return on Investment of Time and Money and quality of content are the keys to success in this business. Embrace those instead of what you have been doing. Those efforts have not yielded any decent results. Ex. The Calabasas Commons theater closed December 28.

Wanna join them?