Movie theaters were already struggling before COVID-19. The pandemic didn't create their problems—it accelerated them.
The Pre-COVID Reality
The theatrical exhibition business has been under pressure for years. Attendance has been flat or declining since the early 2000s, masked only by rising ticket prices. The average American goes to the movies about four times a year, down from nearly five times in 2002.
Meanwhile, home viewing has become dramatically better. 65-inch 4K TVs cost a few hundred dollars. Streaming services offer endless content. The gap between the theatrical experience and the home experience has narrowed considerably.
What COVID Changed
The pandemic forced studios to experiment with something they'd long resisted: releasing major films directly to streaming or premium video-on-demand.
Universal released Trolls World Tour directly to PVOD and made nearly $100 million in three weeks—reportedly more than the first film made in five months of theatrical release. Suddenly, the unthinkable was thinkable.
Disney released Mulan on Disney+ for $30. Warner Bros. announced its entire 2021 slate would debut simultaneously on HBO Max and in theaters. The theatrical window—traditionally 75-90 days of exclusivity—was collapsing.
The Exhibitor's Dilemma
Theater owners are caught in an impossible position. Their business model depends on exclusivity—the idea that if you want to see the new Marvel movie, you have to come to them. Without exclusivity, their value proposition weakens dramatically.
AMC and other chains have pushed back hard, threatening to boycott films that don't respect the theatrical window. But their leverage is limited. Studios control the content. And increasingly, studios either own their own streaming platforms (Disney+, HBO Max, Peacock) or are discovering they can make money without theaters at all.
What Survives
I don't think theaters disappear entirely. Some types of films—big spectacles, horror movies, cultural events—genuinely benefit from the theatrical experience. Opening weekend for a Marvel movie is an event. Watching a horror film with a crowd is genuinely scarier.
But the industry will likely contract significantly. We'll have fewer theaters, showing fewer films, focused on the event-movie experience. The middle ground—mid-budget dramas, comedies, smaller films—will move entirely to streaming.
The Bigger Picture
What's happening to theaters is part of a larger unbundling of entertainment. We used to go to the movies because that's where movies were. Now content is everywhere, and we increasingly watch whatever we want, whenever we want, wherever we want.
Theaters that survive will need to offer something streaming can't—whether that's a genuinely premium experience (luxury seating, better food, pristine presentation) or the social experience of watching with a crowd. The ones that are just "a big room with a screen" won't make it.
COVID-19 didn't kill movie theaters. But it did accelerate a reckoning that was coming anyway. The theatrical business that emerges from this will be smaller, more focused, and—hopefully—better at delivering experiences worth leaving your couch for.