Last year, Penn Ketchum made a $2 million gamble. As analysts were writing off the movie business, Ketchum, the co-owner of Penn Cinema, took out a big loan to extensively renovate the lobby of one Pennsylvania location. Ketchum added a new bar and kitchen, constructed a beer wall where customers can pour their own drafts and created a lounge area for patrons to enjoy their food and cocktails.
“We were seeing other independently owned theaters struggling financially, so we made the strategic decision that the theaters that will be able to stay open are the ones that invest in themselves,” Ketchum says. “We don’t just offer movies. We want to provide an experience so that going out feels special.”
Ketchum’s bet appears to have paid off, with revenues for the company up nearly 10% year over year. He attributes the gains to an uptick in food and beverage sales, though a few recent hit movies — like “Hoppers” and “Project Hail Mary” — have helped.
Over the past five years, exhibitors like Penn Cinema have struggled to program their screens. First, the pandemic slowed production, then the actors and writers strikes of 2023 shut things down again. Those disruptions came as studios were economizing by making fewer films. The result is a box office that has stubbornly refused to show signs of improvement. Ticket sales in 2025 were essentially the same as the previous year’s, hovering above $9 billion. In pre-COVID times, domestic revenues topped $11 billion.
Adam Aron, CEO of AMC Theatres, had loudly predicted that 2025, which boasted a slate filled with sequels to “Avatar” and “Zootopia,” as well as a trio of Marvel movies, would mark a return to form.
“We thought we were going to see some big growth, so when that didn’t happen, we were very surprised,” Aron says. “Some movies were delayed or moved out of the year, and other movies didn’t live up to expectations, which was disappointing.”
This year will offer an important test, Aron and others say, because there will be more volume. The number of wide releases increased from 91 in 2025 to a projected 113 in 2026, according to Comscore. Potential blockbusters include Christopher Nolan’s “The Odyssey,” “Dune: Part Three” and “Spider-Man: Brand New Day.”
“Movie theaters are going to be very busy,” Aron predicts.
Indeed, the first quarter already showed marked improvement, with ticket sales up 23% thanks to hits ranging from the romantic epic “Wuthering Heights” to the animated adventure “The Super Mario Galaxy Movie” and the slasher sequel “Scream 7.”
“Audiences are voting with their wallets,” says Jim Orr, head of domestic distribution at Universal Pictures. “The films that have come along recently have been able to appeal to a broad range of people.”
Courtesy of Universal Pictures
This momentum comes as theater owners like Ketchum are traveling to Las Vegas this month for CinemaCon, the annual trade show where studios pitch exhibitors on their upcoming slates. Everyone is arriving in a much better frame of mind, not just because of the recent wave of box office successes, but because Universal announced that it would keep its movies in cinemas longer. During COVID, the studio pushed to shrink the theatrical window — the length of time between a film’s big-screen debut and its home entertainment premiere — to as little as 17 days. Prior to the pandemic, the industry standard was roughly 90 days. Universal has promised to increase the period to about 30 days in 2026 and 45 days by 2027. Exhibitors believe that’ll help business because customers have grown used to being able to wait a few weeks to see new releases from the comfort of their couches.
“Universal is going to be meeting with a lot of happy exhibitors this year,” predicts Bob Bagby, CEO of B&B Theatres. “A 45-day window is better for the whole ecosystem because the consumer is very confused about how fast movies are coming out.”
But Bagby and others hope that there’s a coordinated marketing effort to refamiliarize people with the concept of waiting more than a month for movies to show up on video on demand.
“We’re going to take a year or so to reeducate people that, no, a new movie doesn’t leave theaters in 17 days,” Bagby says. “So now people will have to think, ‘I don’t want to miss out on the excitement of the movie.’”
Theater owners also believe the Universal news is an acknowledgment by studios that short windows depressed ticket sales and deprived Hollywood of revenues. The hope is that the industry can coalesce around one established theatrical window of at least 45 days. They also want to ensure that movies don’t hurtle toward streaming services, with some exhibitors pushing for movies to wait 120 days before hitting subscription platforms. Delaying those debuts would bolster the box office and help studios earn more money from home entertainment sales and rentals, the reasoning goes.
“Customers basically see Amazon Prime or Disney+ or Netflix as utilities,” Regal Cineworld CEO Eduardo Acuna says. “This is something they’ve already paid for, so they’re thinking watching a movie there is free.”
As happy as theater owners are with Universal’s announcement, they are downright fearful about what Paramount’s $111 billion deal to buy Warner Bros. means for the business. When Disney snapped up 20th Century Fox in 2019, it led to a shortfall in theatrical releases. Before Fox was part of the Magic Kingdom, the studio released more than a dozen movies in cinemas annually. Last year, the company only debuted six films.
Paramount has promised that if its purchase of Warner Bros. is approved, the combined companies will release 30 films a year. However, some exhibitors and analysts doubt it can find enough compelling projects to justify that pace of production. They also worry that the sale will trigger more consolidation among the few remaining studios.
“I’m very skeptical that bigger is better,” says Michael O’Leary, CEO of Cinema United, the exhibition industry trade group. “It usually leads to fewer distributors, who are making fewer movies. I hope Paramount bucks that trend, but I’d rather Warner Bros. remain independent and keep making world-class movies.”
There are other causes for concern. High-profile chains such as iPic have recently filed for bankruptcy, and publicly traded exhibitors like AMC are laboring to lift their share prices out of the gutter. Other theaters report that their margins have never been tighter. Inflation has made food and beverage prices soar, and rents are getting higher.
“A lot of leases were locked in before COVID, and they’ve become really hard to justify when the overall business is down $2 billion,” says Eric Handler, an analyst with Roth Capital Partners. “And while it’s good that theaters are finding ways to sell more concessions, the thing that will help increase their margins most is to increase attendance.”
Cable and movies are often yoked together, seen as two withering businesses in a media landscape that’s now dominated by streaming. But their problems deviate in one important respect. Cable’s audience is primarily older, while the theatrical movie business is being carried by young audiences. It’s the older folks that cinemas are struggling to attract. A recent Fandango study found that Gen Z is the most avid moviegoing group, a demographic trend that bodes well for the industry’s future.
Stephanie Silverman, executive director of Nashville’s Belcourt Theatre, has observed this youthquake firsthand. When her theater programmed a David Lynch retrospective after the filmmaker died last year, she was surprised that many of the ticket buyers weren’t even alive when “Blue Velvet” or “Mulholland Drive” hit the big screen.
“We were completely sold out,” Silverman says, “and it wasn’t people in their 50s — it was a young, film-loving set. They grew up with streaming and the internet, and it made them even more curious and knowledgeable about cinema.”
For theater owner Ketchum, the popularity of movies with younger generations is a sign that he was smart to remodel his theater.
“It makes me feel good about investing $2 million in a renovation,” he says. “People called us dead when they invented TV, or when someone bought a video player or streaming started. Every time they’ve been wrong, because we offer a shared experience you can’t get anywhere else.”
