Movie Theaters Are Betting on Premium Formats to Survive

Home streaming was supposed to make the multiplex obsolete. Instead, theater chains are betting that bigger screens, better seats, and formats you can’t replicate on a television will keep audiences coming back.

Ticket sales for ordinary showtimes have never fully recovered to their pre-streaming highs, and chains have responded by shrinking their standard auditoriums and pouring capital into premium formats instead — large-format screens, immersive sound systems, and reserved recliner seating priced well above a standard ticket.

The strategy is working better than the base business it’s replacing. Premium formats now account for a share of box office revenue far outsized relative to the number of screens they occupy, and studios have adjusted by designing their biggest tentpole releases specifically to reward a large screen and a subwoofer a home setup can’t match.

The mid-budget film is the casualty

The strategy has a clear loser: the modestly budgeted drama or comedy that once filled theaters on an ordinary weekend. Those films increasingly skip theatrical release altogether and head straight to streaming, since they can’t justify the marketing spend needed to pull audiences away from their couches for a non-spectacle experience.

“We’re not competing with streaming on convenience anymore. We’re competing on things a phone and a sofa simply can’t do.”

The result is a theatrical business narrowing around two extremes — enormous, effects-driven spectacle on one end, and niche independent releases on the other — with the reliable middle ground that used to fill the calendar increasingly routed around the multiplex entirely.