AMC, Regal, Marcus invest billions in upgrades after strong summer box office

The cinema industry is on the scene. A strong summer box office paves the way for billions of dollars in planned investment in upgrades to movie theaters across the country.

Cinemas have faced a difficult decade so far. First, the industry was hit by the pandemic in 2020 which forbade the public to gather in cinemas for months. Then the twin Hollywood strikes in 2023 slowed movie production, stalling any momentum theaters had in getting people back into seats, especially in the early part of the year.

With those disruptions largely in the past and a strong slate of movies set to expand over the next two years, eight of North America’s largest theater chains now plan to invest more than $2.2 billion to to improve their cinemas, according to the National Association. of theater owners.

“It’s been a terrible three years between those things, the pandemic and the labor strikes, but they seem to be behind us,” said David A. Gross, who runs the film consultancy Franchise Entertainment Research. “They (cinema chains) now feel that the business will support their investment in putting money back into the cinemas and improving them.”

🔥 A hot summer box office

Several box office records were broken this summer. Marvel’s (early) Deadpool and Wolverine has earned over $1.3 billion at the global box office, making it the the highest-grossing R-rated film of all time. And Pixar’s Inside Out 2 broke the record for highest grossing animated film with $1.7 billion in ticket sales.

Other films that performed well this summer include Alien: Romulus ($331 million), Twisters ($369 million), Bad Boys: Ride or Die ($403.8 million) and Despicable Me 4 ($940.9 million), acc Box Office Mojo.

And it’s not just blockbusters that have thrived this year.

Independent film production and distribution company A24 had its best opening weekend in April with civil war – which became the second highest-grossing film, earning $122 million.

NEON’s horror film Long legs it became the biggest domestic hit with $77 million.

“The audiences, at the box-office level, in the last two and a half months there, are very close to pre-pandemic box-office levels,” Gross said.

🎞️ Soon, this autumn and beyond

The upcoming fall movies promise to be just as strong, and theater companies are optimistic that the summer momentum will continue.

Among the highly anticipated movies still coming out this year are Joker: Folie à Deux with Joaquin Phoenix and Lady Gaga, Gladiator 2, Riverand Mufasa: The Lion King.

The roster for 2025 and 2026 also looks strong. NATO estimates that the annual domestic box office could reach $10 billion by 2025 and $11 billion in 2026.

The group predicts that Avatar: Fire and Ash, Jurassic World Rebirth, and Captain America: Brave New World will be the highest grossing films next year.

It has also already identified nine films that could earn at least $300 million at the domestic box office in 2026, including Super Mario Bros. 2, Avengers: Doomsday, The Mandalorian & Groguand Toy Story 5.

“The line-up looks steady and strong again and looks good in 2025, and that’s what theater owners are looking at and saying, ‘now we can spend some money,’” Gross said.

🍿 More premium experiences

With a seemingly favorable slate of films set for the next two years, cinema companies are now in a position to bank on more premium experiences.

The eight companies that reported planned investments to NATO operate more than 1,600 locations in all 50 states and Canada, spanning more than 21,000 screens and accounting for 67 percent of the box office. These include national and regional AMC chains (AMC)Regal Cinemas, Cinemark USA (CNC)Cineplex, Marcus Theaters (MCS)B&B Theaters, Harkins Theaters and Santikos Entertainment.

NATO said these improvements could include cutting-edge laser projection technology, immersive sound systems, improved seating and an improved selection of food and beverage offerings, including alcoholic beverages.

“Today’s consumers rightly demand the best possible experience when they visit our theaters. Operating a theater today is a capital intensive operation,” said Bob Bagby, Chairman of the NATO Executive Board and CEO of B&B Theatres. “This investment of resources is the next step in our industry’s ongoing commitment to ensure that going to the theater remains a unique and special experience for generations to come.”

In recent years, the industry has turned more and more towards premium offers to try to draw the audience back and make up for the lower attendance.

NATO President and CEO Michael O’Leary wrote in a column in August that the industry has responded to recent setbacks by “finding new ways to get consumers through the doors.”

This strategy seems to be paying off for now. Ticket sales for larger premium formats such as IMAX (IMAX) accounted for more than 14% of all ticket sales as of the end of June 2024, according to Wall Street Journal. In 2019, sales for these formats in the same period accounted for only 10% of sales.

In addition, some theaters have already benefited from increasing their concession offerings to include cocktails and items such as buckets of specialty popcorn. In July, AMC reported that Deadpool and Wolverine helped her achieve her the highest single-weekend food and beverage gross of 2019.