A little return!
The last 12 months were supposed to be a game changer for struggling movie theaters. But instead of heralding a dramatic return to movie theaters, 2025 is neck and neck with 2024’s average box office and will fall well short of the $9 billion in domestic ticket sales that most analysts expected the theatrical movie business to easily eclipse. Before the pandemic, North American revenues regularly reached between $10 billion and $11 billion. The 2025 results are a huge disappointment that no amount of change can change. (We are already talking about how much better 2026 will be.)
“There’s an unfortunate trend where we just can’t get the industry to reach $9 billion at the domestic box office,” says Mike Sherrill, chief operating officer of the Alamo Drafthouse restaurant theater chain. “It looks like it’s going to be two years in a row that the industry has been stagnant.”
More worrying is the reality that many of the film industry’s biggest franchises are showing signs of oversaturation or fatigue. Marvel continued to struggle with its B Team heroes; February’s “Captain America: Brave New World” and May’s “Thunderbolts” lost tens of millions during their theatrical runs, while July’s “Fantastic Four: First Steps” will bring in only a modest profit. And while “Avatar: Fire and Ash” ($760 million and counting), “Wicked: For Good” ($504 million) and “Jurassic World Rebirth” ($869 million) will be among the year’s highest-grossing releases, they will fail to match the earnings of previous films in their respective series. Clearly, the theater industry can’t thrive on sequels and spinoffs alone.
It would be easy to declare the end of comic book movies. That said, genres have waxed and waned throughout Hollywood’s history — just look at musicals, westerns, or raunchy comedies, which have declined in popularity after once being surefire draws. What theater owners and some studio chiefs are really worried about at the end of the year is what the future holds if Netflix can get government approval for its $82.7 billion deal to buy Warner Bros. Already, Netflix co-CEO Ted Sarandos has suggested that he thinks “windows,” industry jargon for the length of time that films are shown exclusively in theaters, are too long. He told Wall Street shortly after the deal was announced that he expected them to “move” in a more “consumer friendly” direction. Everyone knows exactly what he meant by that.
For cinemas, this is nothing short of an existential threat. During COVID, studios shortened the interval between a film’s theatrical release and its home entertainment debut, only to find that customers had become accustomed to waiting to watch films until they hit streaming or on-demand platforms. If storefronts continue to shrink, theaters risk losing their competitive advantage.
There was also reason to be optimistic about the trajectory of an industry that has been turned around and sidelined for half a decade. China, which has been hostile to Hollywood films since the pandemic, has embraced some major studio releases such as “Zootopia 2” and “Avatar: Fire and Ash,” signaling that one of the world’s largest movie markets is still accessible to moviegoers. certain American productions. Of course, China is doing just fine without Hollywood – thank you very much. The year’s highest-grossing release was not an English-language production but rather the Chinese animated sequel “Ne Zha 2,” which grossed more than $2.1 billion worldwide, despite the fact that most Americans would gawk at the title.
Family films and video game adaptations proved irresistible to audiences, who flocked to theaters to see films like “A Minecraft Movie,” “Lilo & Stitch” and “Zootopia 2.” The three films, all rated PG, were the three highest-grossing Hollywood productions, with “A Minecraft Movie” grossing just under $1 billion and “Lilo & Stitch” and “Zootopia 2” both crossing that threshold. This is the second year in a row that PG films have outperformed their PG-13 counterparts, which is notable because it’s usually the other way around. Meanwhile, anime has proven to be a huge boon, with “Demon Slayer: Infinity Castle” and “Chainsaw Man” scoring back-to-back wins for Sony-owned Crunchyroll.
“What happened with ‘Demon Slayer’ is great because it opens up a new category of films,” says Sherrill of Alamo Drafthouse. “Approximately 49% of the audience was under the age of 24. This is very important because we need to think about what will be relevant to the next generation of moviegoers.”
Comic book content is no longer king. After being the most popular genre for over a decade, these films have recently seemed a lot less superhuman. The latest “Captain America” suffered from prolonged post-production and numerous rewrites, with reviews heavy when the film was released in February. Although the “Fantastic Four” and “Thunderbolts” films were much better regarded, they still failed to match the kind of revenue that Marvel films were regularly getting before the pandemic. Marvel Studios will have the opportunity to regain its box office prowess with next July’s “Spider-Man: Brand New Day” as well as December’s “Avengers: Doomsday” which brings back Robert Downey Jr. and Chris Evans.
Marvel’s rival DC Films fared better with “Superman,” a generally well-received Man of Steel adventure that grossed $616 million. Much depended on the success of the film, which centered on DC Comics’ most recognizable name. James Gunn, who took over DC with Peter Safran in 2022, directed the film and positioned it as a reset for a company in desperate need of new direction. For years, DC films such as “Justice League” and “The Flash” have been criticized as too dark and too dense. Gunn and Safran wanted to recapture the humor and hope that defined Richard Donner’s 1978 classic, “Superman.” DC’s real challenge will come next year when the studio introduces films like “Supergirl” and “Clayface,” which are based on much lesser-known characters.
“The DC logo had to once again become synonymous with quality,” explains Safran. “Our films have suffered from real inconsistency for too long. It takes time to develop a positive reputation, but this has put us on the right path.”
It’s been a disappointing year for many adult-oriented dramas, with films like “The Smashing Machine,” “Bugonia” and “Springsteen: Deliver Me From Nowhere” failing to make a dent at the box office. However, some studios have taken artistic gambles that have largely paid off, including Warner Bros., which gambled on idiosyncratic horror films like Ryan Coogler’s “Sinners” and Zach Cregger’s “Weapons,” both of which drew huge crowds after debuting to rave reviews. And awards buzz helped another of the studio’s arthouse films, Paul Thomas Anderson’s “One Battle After Another,” gross more than $200 million. Only problem: with a budget of 140 million dollars and tens of millions spent on marketing, the film risks losing 100 million dollars in theaters since the studios and exhibitors essentially share the ticket sales.
“The good news is that when a movie gets people’s attention, they’re ready and excited to go. We’ve seen all kinds of movies work this year,” says Adam Fogelson, president of Lionsgate Motion Picture Group. “The challenge is that if you have something that for whatever reason doesn’t pique people’s interest, the audience is non-existent, no matter how high the star power is. You can have a movie that audiences love and no one is going to see it.”
Tom Cruise’s power may be fading, as evidenced by dwindling returns from the mega-budget film “Mission: Impossible: Judgment Day.” It’s among the biggest bombs of the year and could put Ethan Hunt on hiatus, at least until Cruise’s adventure films become less expensive. But other talents are rising to the A list. Timothée Chalamet, for example, has proven himself to be one of the hottest names in cinema. The 30-year-old actor helped make A24’s “Marty Supreme,” a period film about ping-pong, an unlikely holiday hit. Credit goes to the star who helped mount a promotional campaign that saw him deploy everything from bright orange blimps to viral videos in service of indie drama – the marketing blitz attracted TikTok fans, as well as arthouse aficionados.
Movie theaters have also relied heavily on large, high-end formats like Imax and Dolby. The popularity of these theaters, which are more expensive than average movie tickets, has helped to offset the drop in attendance. For visual spectacles like “Avatar: Fire and Ash” or “F1: The Movie,” these PLFs represented 50 to 60% of overall sales. Although industry sales remained mostly flat, Imax had its best year at the box office with $1.2 billion worldwide.
“We’ve diversified across genres,” says Imax CEO Richard Gelfond. “We were best known in 2022 and 2023 for superhero films and sequels. This year we did a lot more in horror and family films. Three of the four biggest animated films in our history happened this year, which I don’t think is a coincidence. The audience’s attitude extends to the type of films they like to see in Imax.”
He suggests that “more diverse content would help protect cinemas from some of Hollywood’s changes.”
Exhibitors have actually turned to alternative content to populate their screens during the slower months. Re-releases of “Kill Bill” or “Back to the Future” or anniversary screenings of “Jaws” have put Alamo, for example, ahead of the industry’s year-over-year returns by 5%. But cinema operators are perfectly aware that the old ones will not be able to maintain the lights on their own. They need Hollywood to provide the kind of new releases that make multiplexes the epicenter of culture again.
“I’d like to think that studios and distributors look at trends and see that fresh, original stories work,” Sherrill says. “So don’t just give me 20 more movies. Give me 20 more movies that are meaningful to people.”
Will these types of films fill the marquees in 2026? This year, that’s definitely not the case.
