Hollywood Rediscovers the Profitable Magic of Movie Theaters

April 18, 2023

The onset of the Covid-19 pandemic in 2020 changed the movie exhibition industry forever, as theaters around the country closed their doors and streaming services racked up millions of new subscribers. At the time, some experts predicted that platforms like Netflix and Disney+ would take over the attention of moviegoers entirely as theaters gradually faded into obscurity. In the years that followed, though, the enthusiasm surrounding streaming has started to taper off as these services continue to mount up debt while failing to bring in steady profits. 

Meanwhile, Hollywood has recently enjoyed a string of hits at theaters like Avatar: The Way of Water and The Super Mario Brothers Movie, bringing in much needed ticket sales for financially strained studios. Overall, the domestic box office haul for the year stands at $2.3 billion so far, up 36.8 percent from the same period last year and a whopping 589.5 percent improvement over 2021. Along with being buoyed by blockbusters and franchise hits, Hollywood has rediscovered the importance of theatrical release windows that provide more opportunities for profit than streaming. According to analyst Eric Handler, studios are starting “to recognize that having an exclusive theatrical window is the best way to maximize profits instead of releasing everything simultaneously on demand. There’s a lot of marketing value in having your movie in cinemas.”

Even Amazon is beginning to see the value of the box office. The Prime Video provider recently released the movie Air on more than 3,000 screens, the biggest theatrical debut from a streaming service ever. The film has also benefited from a $40 million marketing campaign, leading to decent sales at theaters that could quickly translate into valuable word-of-mouth marketing. Wall Street investors have also been bullish on the resurgence of movie theaters, which can reach wider audiences than even the most popular streaming platforms. “There are only so many people who will subscribe to your streaming service, so if you want to attract eyeballs to your movies, theatrical becomes a much more efficient option,” said analyst Eric Wold.


  1. What are some advantages and disadvantages of releasing movies in theaters rather than directly on streaming services? 
  2. Do you think movie theaters will continue to attract audiences in the future, or could streaming services win out in the long run? 

Source: Brent Lang and Rebecca Rubin, “Desperate for Profits and Souring on Streaming, Hollywood Falls Back in Love With Movie Theaters,” Variety, Aprill 11, 2023.