BUST: Multi-Location Movie Theater Chains Struggle

With Oscar season around the corner, let’s examine the silver screen (or lack thereof). A 100-year-old movie theater MULO (multi-location) operation just declared bankruptcy. Founded in the day of silent films, Metropolitan Theaters has 16 theaters and 87 screens, including two IMAX auditoriums in California, Colorado, and Utah.

The pandemic and the rise of the small screen have created a financial challenge for the entire movie theater industry. Although ticket sales were up in 2023 over 2022 (825M versus 813M), they are still falling short of the 1.2B sold in 2019, according to Statista.

Metropolitan is not the first MULO movie brand to face financial woes. British-based Cineworld, which owns Regal Cinemas filed for but then emerged from bankruptcy.

Last year’s Barbie and Oppenheimer releases provided a huge boost to the movie industry. Barbie used consumer brand activation techniques to drive millions of viewers to the theater, creating interactive and social “experiences” around the release. Movie-goers wore pink, viewed the movie in groups, and went out afterward for meals, cocktails, and chats.

Although Oppenheimer didn’t involve the same type of buzz and glee, it generated close to $1B in ticket sales. (Bombs and scientist angst seem to play better on the big screen.)

Movie theaters have long been looking for ways to generate new revenue sources. Food and liquor in many theaters are now commonplace, as is on-screen advertising. Many theaters make themselves available for corporate meetings, birthday parties, and other types of events.

AMC leads the industry. With close to $4B in revenue and more than 11K screens, the brand discovered a new way to stay afloat — concert movies. Last year, Taylor Swift: The Eras Tour and Renaissance: A Film by Beyonce drew movie-goers to its seats.

The keys to success for MULO theaters (as in many industries) seem to be:

• Providing relevant content and appealing to the changing tastes of consumers.
• Creating memorable experiences beyond reclining seats and flavored popcorn.
• Locating theaters in areas with the right kind of traffic and easily accessible parking and marketing effectively to movie-goers, making them aware of special features, deals, and upcoming films.

We can’t predict who will win the statues this year, but we believe that the industry will ultimately survive — perhaps with fewer screens but more immersive experiences.