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Movie Theaters Storylines for 2023

by 
Ezra Carmel
 on 
April 13, 2023
Movie Theaters Storylines for 2023

Our recent white paper looked at the evolution of the movie theater industry over the past several years. While demand for out-of-home movies has seen a resurgence since theaters began reopening post-lockdowns, visitor preferences and behavior have changed significantly. And in the new normal of movie-going, theaters are reinventing their offerings and the visitor experience. How will consumers respond to these innovations? Drawing on the latest location intelligence data, we uncovered the trends that are driving movie theater traffic in 2023. 

The Plot Twist

Since the post-pandemic reopening, the movie theater industry has made a steady recovery. And one of the driving forces behind the return to theaters is the demand for experiences that can’t be replicated at home. Movie fans are rediscovering familiar pleasures – like sharing the excitement with a crowd – that were missing during the months of COVID restrictions.

Theaters are adapting to changing consumer behavior and giving movie-watchers new reasons to leave home. Concessions have undergone a transformation – going far beyond popcorn and soda. Many cinemas now offer a bar and full-fledged gourmet meals worthy of a night out, and as a result, concession spending per visitor is on the rise. And since concessions have a larger profit margin than ticket sales, the trend is amplifying the impact of renewed foot traffic on theaters’ bottom line. And experts predict the addition of supplementary activities alongside movies – such as arcades and bowling alleys – will soon become the norm. 

Taking these factors into account, it’s perhaps no surprise that since the start of 2021 theater foot traffic has maintained a positive trajectory that is likely to continue in 2023. 

The Value of a Movie

As theater attendance has climbed, the average movie ticket price has gone up as well – from $9.16 in 2019 to $10.53 in 2022. Some of that price increase can be attributed to recent inflation, but even before the pandemic, a consumer shift to premium theater formats like 3D and IMAX – which carry a steeper admission cost – likely played a role. Higher ticket prices can mean increased theater revenues – especially when attendance is up. This was the case in 2022 when both box-office revenue and foot traffic were elevated compared to 2021. 

But although ticket prices are higher on average than they were pre-pandemic, the cost of going to the movies is actually lower than it was in 2019 when adjusting for inflation. This makes movie theaters a relatively economical entertainment option in the current economic climate, and could mean that going to the movies is becoming especially popular among budget-conscious consumers. Indeed, Trade Area Analysis of three of the biggest theater chains – AMC Theatres, Cinemark, and Regal Cinemas – reveals that since 2019, the median household income (HHI) of trade area residents has decreased. This could indicate that in the current inflationary environment, consumers on tighter budgets see movies as an affordable means of entertainment.

Gen Z On the Rise

The declining median HHI of movie theaters’ trade areas can be at least partially explained by an increase in theater attendance from the Gen Z demographic, since these younger visitors generally haven’t reached peak earning years. In 2022, all three theater chains had trade areas with a greater percentage of Gen Z residents than in 2019. 

Theater chains’ recent investment in sound and picture quality likely appeals to Gen Z visitors who’ve grown accustomed to cutting-edge technology at home. And Gen Z’s excitement for movie-going indicates the potential for theaters to have continued success. Chains that earn Gen Z’s loyalty with a quality movie experience can capitalize on the many years of movie-going this young crowd has ahead of it. 

Coming Attractions

The movie industry continues to recover from the pandemic, in part due to many exciting innovations aimed at getting consumers off their couches and into theater seats. 2023 is slated to see the release of more movies as studio production gets back to normal, which means more opportunities for consumers to be exposed to new theater experiences. 

For updates and more data-driven foot traffic insights, visit Placer.ai.

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