Watching Netflix in IMAX with Popcorn: How Movie Theaters Are Surviving

Netflix Taps North American Screens for Promotion

Premium Format Theaters See Growing Share of Revenue

Food and Beverage Sales Rise as Services Expand

Adapting to a Coexistence Model for Theaters and Streaming Platforms

Netflix is knocking on the doors of North American theaters. Last year, it screened the final episode of "Stranger Things" in more than 500 locations. The theaters generated $25 million (approximately 3.75 billion won) in concession sales from popcorn, beverages, and other snacks alone. Next year, hopes are high for "The Chronicles of Narnia: The Magician's Nephew," which will premiere on Netflix in April. The film will have an advance release in IMAX theaters in February.

On the 2nd of last month, attendees at CinemaCon held in Las Vegas, USA, are passing by the Cinema United advertisement. Photo by AP Yonhap News

This was agreed upon at CinemaCon, held in Las Vegas last month. Netflix has previously insisted on exclusive distribution through its own platform. Now, the company views movie theaters as a distribution channel to be leveraged as needed. CinemaCon is the world's largest film convention, attended by global distributors and technology companies alike.

The North American theater market is also changing. There is a greater focus on high-profile films, driven by a shrinking market. This year's box office revenue is about 20% lower than before the pandemic. The decline is due to a reduction in the number of movie releases, rather than a collapse in demand. As the overall audience shrinks, strategies are being refined to match more selective consumer spending.

One notable example is the rise of premium formats. By upgrading physical elements such as seating, sound, and screen quality, theaters offer high value-added experiences. Tickets for IMAX or Dolby Cinema are about twice as expensive as those for standard theaters. Nevertheless, these formats now account for 25% to 30% of total box office sales, reflecting rapid growth.

This trend is expected to peak this year with the July release of director Christopher Nolan's new film, "Odyssey," which was filmed entirely with IMAX cameras. Distributor Universal Pictures is emphasizing the unique value of the theatrical experience in its promotional campaigns.

Food and beverage sales have increased as much as those from premium formats. At major multiplex chains, concessions make up around 40% of total revenue. Popcorn and beverages, with profit margins exceeding 80%, are the primary sources of income.

North American theaters are increasing investments to match these trends. In particular, eight major chains plan to spend $2.2 billion (3.3031 trillion won) over the next three years on facility upgrades. Key areas of improvement include recliner seating, laser projection systems, and enhanced food and beverage services. The aim is to transform moviegoing into a holistic consumer experience. Theaters are screening content that benefits from large screens and quality sound—such as concert films, sports broadcasts, and esports tournaments—regardless of genre. Interactive programs like sing-alongs are also on the rise.

In this changing environment, the focus of industry competition has shifted as well. During the pandemic, the key issue was whether to release films theatrically. Now, negotiations center on the duration and terms of theatrical runs. Securing a period of exclusivity is critical for recouping investments.

According to a report published by the Korea Creative Content Agency on May 4, titled "Restructuring of the U.S. Streaming Industry and Media M&A Trends," the holdback period—the time between a film's exclusive theatrical release and its availability on streaming or digital sales platforms—is increasing. Before the pandemic, the holdback period was typically 75 to 90 days. With the spread of COVID-19, it was shortened to 17 to 30 days, but it is now recovering.

Universal Pictures will extend the window from 17 to 31 days starting this year, and will apply a minimum of 45 days to major titles next year. Paramount Skydance, in its bid to acquire Warner Bros., has pledged to release at least 30 films annually and guarantee at least 45 days of exclusive theatrical screening. Disney maintains a 100-day window for major franchises.

AMC Theater at The Grove in Los Angeles, California, USA. Photo by Reuters Yonhap News

Streaming companies are also getting on board. Netflix, which had been particularly resistant to theatrical releases, has recently shifted its stance and is now open to platform releases following approximately 45 days of theatrical screening.

Park Byungho, head of the LA Business Center at the Korea Creative Content Agency, explained, "This is not just about policy changes at individual companies, but a process in which the entire industry is seeking a new equilibrium after experimenting with short-term release windows." He added, "Especially, advance releases using premium formats not only emphasize the scale and symbolic value of a work, but also raise expectations for its streaming release."

This is not a simple tactical adjustment; it is a structural transformation of the entire North American film industry. The old paradigm—single-channel theatrical distribution, mass production, and ticket sales as the central metric—has reached its limit. Survival now depends on tailoring distribution channels, release timing, and revenue models to the characteristics of each title. In particular, theaters are shifting from being a compulsory gateway for all films to serving as strategic hubs for maximizing the value of select titles.

Park concluded, "The very operating model of the industry is being redesigned. Going forward, the ability to adapt to the changing structure of the theater market will determine competitive success."

This content was produced with the assistance of AI translation services.