Report: Movie Theater Attendance at 64% of Pre-Pandemic Levels; Will Dynamic Pricing Send Audiences Back to Streaming?
Movie theater attendance across the United States is on the rise according to a new report from global insights firm Interpret, which shows that cinemas on average are seeing around 64% of the attendance they had before the COVID-19 pandemic struck across the globe.
Interpret’s numbers dive even deeper into audiences’ willingness to head to theaters to see new movies. The data shows that 34% of respondents to Interpret’s survey said they went to a theater to see at least one movie in 2022. That beats the 25% of users who said they watched a new movie from home via streaming and represents an inversion of last year’s results. In 2022, more viewers reported streaming new movies from home than going to the cinema to watch them.
That’s a definite gain for movie studios, who are starting to see consumers change their attitudes in regard to where they prefer seeing new movies. A survey from 2021 showed most movie-watchers preferred streaming new releases from home over going to theaters, so Interpret’s survey indicates a definite shift in willingness to go out to the movies.
That shift shouldn’t be a big surprise, considering how the pandemic has receded in the intervening years. But theater chains aren’t satisfied with the revenue gap they still see, and some are taking matters into their own hands to boost their gross at the box office.
AMC, for instance, recently announced it would introduce dynamic pricing in select markets. Under the new system, better seats toward the middle of the theater will be priced higher than those on the edges of rows, or closer to the screen. AMC’s dynamic pricing model is coming to New York City, Chicago, and Kansas City first, but will be rolled out across the United States by the end of 2023.
The move is a significant gamble for AMC. As the first major movie theater chain to offer dynamic pricing (although live sports and concert venues have used the system for decades), AMC risks angering consumers and driving them to competing chains that don’t force visitors to pay more to sit in the best seats. With attendance levels at theaters still significantly lower than they were before the pandemic, it’s not as if customers will be hurting for choice if they want to defect from AMC.
The move could also drive a higher demand for films to be sent directly to streaming. That’s the last thing movie studios want, as the revenue from theatrically released films far outweighs the amount companies bring in when releasing movies as streaming exclusives.
Enhanced revenues are a big reason Disney recently announced it was developing sequels from the “Toy Story” and “Frozen” franchises that will be theatrical exclusives. They’re also the reason Warner Bros. Discovery reversed its policy of day-and-date releases on HBO Max, though the shift was not enough to convince former pay-1 partner Legendary Entertainment to stick with WBD. Legendary recently announced a new distribution deal with Sony, citing WBD’s former day-and-date release strategy as a reason.
Consumers who have dealt with dynamic pricing before may be hesitant to accept it at the movies. If a seat in the center of the theater costs 15%-20% more than an aisle seat, customers could decide that in combination with concession prices, the cost of theater-going isn’t worth the return, especially since movies usually come to streaming two or three months after their initial release.
Studios would probably resist demands to increase day-and-date releases again, however. In fact, the most likely scenario in the short term is that movie producers would lengthen theatrical release windows, in order to convince users that if they want to see blockbuster movies, they have to go to the theater. Theatrical success like “Top Gun: Maverick,” which stayed in theaters for over 200 days and raked in over $1 billion at the global box office, could be taken as a sign that audiences will respond positively to longer theatrical releases.
AMC’s dynamic pricing is still in its testing phase, and it may not ever see a nationwide launch. But if it does, it could become a turning point for cinemas and streamers alike.