Consumers and the Future of the Film Industry

Since their inception in the early 20 th century, Hollywood and the film industry have been
major drivers of consumer pop culture. There’s no doubt that Hollywood is synonymous
with modern American culture, and as the film industry has influenced American
consumer habits, Americans were historically the biggest supporters of the industry. In
2020, though, many things changed. In the wake of the COVID-19 pandemic, China
overtook North America as the largest box office territory in gross receipts and the rise
in Chinese and Indian cinema has challenged Hollywood’s global hegemony in the
industry. Perhaps even more important, the emergence of online streaming services
has also challenged the traditional American cinema. In this new, post-COVID cinema
landscape, film and cinema companies will only be successful if they understand
consumers’ changing tastes and the trends that will affect the industry in the years

Hollywood may have been a major force behind American consumerism, but consumer
trends have also affected how the film industry has done business and will continue to
do so in the future. Even before COVID closed down cinemas across the country, many
permanently, consumer tastes were moving away from the “in theater” movie
experience. In a 2018 study about consumers’ movie watching habits, 28% of the
respondents strongly preferred to watch movies in a theater, while those who preferred
streaming were 15%. Two years later, in June 2020, those numbers were nearly
inverted from 14% preference for the theater and 36% for streaming. Although COVID
certainly played a role in that inversion, streaming already had a large audience before

the pandemic and the trend was well underway. These numbers raise the questions:
what’s the future for the cinema industry and how does that future affect the average

An examination of current film and cinema industry trends, as well as the emergence of
streaming services, particularly day-and-day release, reveals that this new
entertainment paradigm is not so simple. The film and cinema industries will have to
adapt to new consumer tastes, while the streaming services will constantly seek to
replace empty theater seats with more downloads from the comfort of one’s home.
Ultimately, successful brands will realize that consumers want more choice and freedom
to consume movies and content in a variety of different ways, on a plethora of different

Welcome to Hollywood!
There’s no doubt that America is the home of the global film industry. The oldest and
first film studios began in Hollywood in the early 1900s, although inventor Thomas
Edison almost made West Orange, New Jersey the epicenter of the film industry in the
late 1800s. The first sound films hit cinemas in the late 1920s, and by that time a film
culture had taken hold across the country. Americans of all backgrounds, in all regions,
enjoyed spending their disposable income at movie theaters, and even after the Great
Depression hit in the 1930s, Americans continued to patronize movie theaters as a form
of escape. The emergence of affordable televisions, and television studios in the late
1950s, didn’t change Americans’ movie going habits much either, as the two forms of

media peacefully coexisted for decades, offering different niches for American
consumers. But by the 1990s new technologies began to challenge the dominance of
the cinema.

As computers became more affordable and the World Wide Web became accessible to
a wide percentage of the population in the 1990s, entrepreneurs began reimagining how
people watched moves. Video cassette recording (VCR) machines was the standard
consumer technology used to watch movies at home during the 1980s and most of the
1990s, but by the late 1990s digital music disk DVD (DVD) machines and streaming
was becoming more common, with the latter eventually disrupting the home
entertainment space as well as the cinema/theater. Facilitated by increased bandwidth
and affordable internet access, companies were able to offer their customers on-
demand access to movies “streamed” on-line.

Video rental company Netflix made the first leap into streaming in 2007, and by 2008 its
streamed content surged past its DVD rentals. The business model was a success, so
within a few years other notable companies – including Hulu, Amazon Prime, Apple TV,
Disney+, and HBO Max – followed with their own streaming, on-demand movie
services. Despite the phenomenal growth of streaming brands in the 2010s, though,
movie theaters continued to have the monopoly on first-releases. But the events of 2020
changed many things in the world, including how people consumed movies.

COVID and the Film Industry

Before the COVID pandemic disrupted the global film and cinema industry, streaming
services were setting the stage of things to come with day-and-date/simultaneous
releases. Simultaneous releases are films that are released in theaters and on
streaming services, simultaneously, giving both consumers and film studios more
choices. The new trend began in the 2000s with independent films and small film
studios, but greatly increased when the COVID pandemic hit in 2020. Movie theater
companies were immediately faced with a new paradigm that offered more choices to
the consumer.

Although consumers were forced into this new entertainment paradigm, they quickly
accepted the reality. By May 2020, 62% of US adults subscribed to at least one
streaming service. Overall, the number of Americans who subscribed to streaming
services doubled from an already large number of 125 million to about 250 million, and
perhaps more importantly, the time the average person spent streaming increased by
75%. Consumers have enjoyed the convenience of streaming and film studios have
welcomed the lower costs as well, but theater owners and companies have been hurt by
diluted box office revenue.

Consumer Bailout of American Theaters?
Despite the massive challenge posed by streaming brands and the problems of COVID,
there are some signs that the American cinema industry has rebounded and adjusted to
the new normal, which may bode well for consumers. In 2022, total cinema revenues
are expected to reach $4.4 billion, which is a 91% increase from 2020. With that said,

it’s still a 61% decrease from pre-COVID numbers. Inflation was also thought to throw a
monkey wrench in the movie theater industry’s recovery, but in the summer of 2022
visits to AMC Theatres, Regal Cinemas, and Cinemark – the “big three” of American
movie theater chains – were only down 24.9%, 15.5%, and 4.1% respectively from the
same period in June 2019. The apparent resiliency of the American movie theater
industry is the result of a combination of brand loyalty and new strategies by the movie

An initial glance at the numbers of who’s going to movie theaters today may at first
seem quite negative. Casual movie goers haven’t yet returned to the theaters, as 49%
are no longer visiting multiplexes, with some studies estimating that 8% of that number
will likely never return. The good news for theaters is that those who have returned to
the theaters are loyal, frequent movie goers who go to the cinema at least once a
month. This loyal consumer base will drive future sales, and the movie studios and
cinema chains that realize this will prosper. The evolving movie goer demographic has
already changed the content theaters are showing: big budget action films have
continued to sell well in the new paradigm, while dramas may soon be relegated to

Future Trends
The trend in moving watching is definitely moving toward more streaming and less
theater activity, but this doesn’t mean that new innovations or opportunities aren’t

available for entrepreneurs and consumers in the movie theater space. It’s likely that the
hybrid model of simultaneous releases will continue to grow, with loyal movie goers
keeping the cinema industry profitable. The number of movie theaters will probably
decrease, and expect to see smaller theaters, but loyalty to the concept and certain
cinema brands will ensure the industry’s survival. And as streaming brands also adjust
to this new reality, expect to see even more consumer orientated changes in those

You’ve no doubt recently watched a video on demand and noticed advertising before,
during, and after the content. This advertising, which is known as advertising-video-on-
demand (AVOD), is expected to increase dramatically in the next few years. Consumers
can pay a monthly fee to watch the content ad free, or watch it with ads as part of a
larger streaming service’s bundle. IMDb TV first launched in 2018 with AVOD content,
and although many thought it was a bad idea, by 2021 the streaming service had 55
million monthly active users and many million more who watch the brand’s AVOD
content on larger streaming services such as Amazon Prime. Overall, film and TV
consumers today enjoy the freedom to choose movie theaters or streaming, as long as
the experience is user friendly.

A recent survey about streaming and movie watching habits revealed that 55% of the
respondents chose “ease of use” for what they liked best about their favorite services.
This answer includes not just the features of streaming services, but the ability and
freedom to watch streaming content on an array of devices. Today’s movie consumers

enjoy the freedom to watch new releases in a movie theater or at home on a computer,
tablet, or even their phone. As smartphones technology improves, expect more people
to watch simultaneous releases on their phones.

The New Theater Paradigm
Some experts believed that a combination of streaming technology and the COVID
pandemic would be the death knell of the movie theater business, and although reports
of American cinema’s demise have been greatly exaggerated, the business landscape
has sure changed. The major successful studios, cinema companies, and streaming
services have realized that consumer tastes regarding movie going is evolving and the
brands that offer their customers more choices and freedoms concerning how to watch
content will be poised for success in this new entertainment paradigm.

About the author:

An industry leader and influencer – Rudly Raphael specializes in all aspects of research logistical design involving quantitative methodology,  implementing internal system infrastructure to streamline business processes, channelling communication and developing innovative research solutions to ensure Eyes4Research remains a competitive force in the marketplace. An entrepreneur, inventor (patent holder), blogger and writer – his articles have been published in various magazines such as Medium, Ebony Magazine, Bussiness2Community and also cited in various journals and academic publications.