Blockbusters On Giant Screens Point To Comeback For Beleaguered Cinema Industry

Christopher Nolan’s cinematic version of The Odyssey is set to open in July, but the quest to find a ticket to see the movie on an Imax 70 screen began in the summer of 2025. Tickets have long since sold out for these large-screen showings and are now being offered for hundreds of dollars on resale sites.

The anticipation for the blockbuster, as well as a slate of other big-budget releases this year, is underscoring a transformation of movie theaters nationwide — and a comeback for the downtrodden industry.

Cinema industry analysts have been looking for signs of life since a wave of theater closings that began with the pandemic lockdown. The number of U.S. movie screens dropped roughly 12% between 2020 and 2024 to 38,000, according to S&P Global Market Intelligence. 

However, the number of cinemas in the U.S. grew by 40 last year, representing 2% year-over-year growth, according to IBISWorld.

“It's the [premium large format] screens, the luxury outlets and the newer models of theaters that blend movie watching and dining experiences that have been doing relatively well recently,” said Fergus Navaratnam-Blair, vice president of trends and futures for National Research Group. “Whereas it’s the more sort of run-of-the-mill ones that don’t feel as much like an event that are going to be struggling the most at the moment.”

Like theatergoers, commercial real estate developers have expressed diminishing love for the standard multiplex experience, according to SJC Ventures principal Jeff Garrison. They are instead turning toward luxury cinema experiences.

The only theater SJC has in its portfolio is a luxury dine-in Alamo Drafthouse Cinema with 12 screens encompassing 33K SF, part of SJC’s 5th Street Station retail center in Charlottesville, Virginia.

“It’s as much about the food and the dining as anything else. There’s just a lot of energy that comes with it,” Garrison said. “The megaplex with 18 screens, nobody wants that theater.”

Navaratnam-Blair said the state of the cinema industry could be characterized as a K-shaped recovery, with higher-end theaters taking up a larger slice of ticket sales. Theaters utilizing enhanced visual and audio — Imax, ScreenX and Dolby Cinema — made up nearly 15% of all U.S. and Canadian ticket revenue in 2025, up from 9.8% in 2019, Reuters reported. 

Cinema owners have gotten the memo, spending heavily to upgrade existing movie theaters to turn them into premium large format cinemas. In 2024, eight major theater chains vowed to spend $2.2B over three years to upgrade their theaters. In addition to upgraded screens, the renovations will include premium seating with reclining controls, better sight lines, seatside service options and enhanced sound systems. 

Investment may exceed that initial goal. Cinema United reported that theater operators in North America spent $1.5B upgrading cinema spaces from September 2024 to September 2025.

Despite this capital commitment, retail landlords and developers remain skeptical of the cinema space, their attitudes hardened by the havoc of the pandemic. In 2020, domestic box office revenue dropped by more than 81%, according to Box Office Mojo. A wave of chain bankruptcies followed.

In the aftermath, many landlords were left holding empty shells that are difficult and expensive to redevelop for other uses, Coro Realty Advisors President Robert Fransen said. 

“Most landlords dislike theaters,” Fransen said in an email. “Their build, that cost is very high, their credit ratings are low, and what do you do with all those improvements if the theater closes? Theaters are expensive to develop and almost as expensive to redevelop if they fail.”

The new theaters that have opened this past year skew smaller. In July, a 40-seat dine-in theater opened in a Hyatt Regency hotel in Greenwich, Connecticut. It is open to hotel guests and the public. True West Film Center, a nonprofit film society in the heart of California’s wine country, opened an 8K SF, three-screen upscale cinema in Healdsburg.

The decreasing number of screens since the pandemic may be a sign that the cinema industry is rightsizing to a sustainable level, according to S&P Global senior research analyst Wade Holden.

“I think it’s just part of the cycle,” Holden said. “They’re closing underperforming locations. And that’s only going to lead to a healthier industry in the long run.”

There have been few green shoots that cinema investors can point to. One is that younger generations of theatergoers appear more enthusiastic to see a movie in the theater. 

Movie theater attendance frequency by Generation Z, whose oldest cohorts are nearing their 30s, grew by 25% last year, the most of any generation, according to Cinema United. And 59% of Generation Alpha, or those born after 2010, responded to an NRG survey that they would rather watch a movie at the theater than at home. Alpha favored the theater over the couch more than any other generation surveyed. 

Linda Bloss-Baum, a professor in the American University Kogod School of Business’ business and entertainment program, said she is seeing increased enthusiasm for cinema among her students.

“I ask them in class how many are going to a movie tonight? I’m enthused by the number of Gen Z's going to theaters,” she said. “The price elasticity doesn’t seem to affect whether students go to a theater or not. They’re going to spend what it costs to go.”

According to the NRG survey, younger people said they are going to the movies to seek offline experiences with friends and family. 

It may take a CRE village to fulfill that desire. Placer.ai Director of Research Caroline Wu said in an email that theaters and shopping centers have begun working together to create events tied to major movie releases that attract Gen Z theatergoers, including dress-up nights for the film Zootopia 2 and sing-along versions of the anime hit KPop Demon Hunters. 

“Gen Z, the first cohort to grow up as true digital natives, are still gravitating towards … having experiences in real life together,” Wu said. “Movie theaters that showed the sing-along version to KPop Demon Hunters were often sold out with Gen Z'ers who had seen the streaming version on repeat at home and wanted to experience fandom in a packed theater.”

This year will likely be a test of whether the event-driven model can lead to significantly higher box-office revenue and a healthier U.S. cinema landscape, according to Navaratnam-Blair. Last year’s slate of films was light on franchise tentpoles, but the upcoming slate of movies promises new additions to The Avengers, Spider-Man and Dune franchises, along with The Odyssey.

“I think that is really going to demonstrate the opportunity space here,” Navaratnam-Blair said. “It's a really exciting year for cinema in 2026.”