The Indian cinema industry, still on a shaky path to recovery post-pandemic, is staring at a new potential threat looming from Hollywood. A high-stakes battle for the acquisition of Warner Bros. Discovery, involving streaming giant Netflix and traditional studio Paramount, has theatre owners worldwide deeply concerned. Analysts and exhibitors fear that such a consolidation could drastically reduce the number of films hitting the big screen and potentially shorten the exclusive theatrical window, pushing movies to streaming platforms faster.
The Deal That Could Reshape Film Distribution
This month, Netflix agreed to acquire Hollywood studio Warner Bros. for a staggering $72 billion. However, Paramount remains in the fray with a competing hostile bid. For cinema chains, either outcome is worrisome. Michael O’Leary, CEO of the exhibition trade group Cinema United, warns that when legacy studios are absorbed, a significant decline in production typically follows. This comes at a time when the pipeline of movie releases has already slowed dramatically over the past five years, first due to pandemic disruptions and then Hollywood labour strikes.
While both Netflix and Paramount have stated they would not shorten theatrical exclusivity periods, theatre owners remain sceptical. Netflix, as the pioneer of streaming, has historically bypassed theatres for most of its original content, releasing only a select few for brief runs. The company did send at least two dozen films to cinemas this year, and its co-CEOs have pledged to continue releasing Warner films with traditional windows. Yet, the fear persists that the economics of streaming could eventually override these promises.
A Fragile Recovery Amid Soaring Costs
The potential deal adds pressure to a business already fighting to regain its footing. Movie attendance has plummeted in recent years, with many theatres closing permanently during the Covid-19 crisis. Survivors have had to invest heavily in upgrades. Marcus Corp., for instance, spent $390 million over the past decade on plush seating, giant screens, and enhanced food and beverage options like handcrafted cocktails and pizza.
Other chains are adding playgrounds, bowling alleys, and standalone bars to create destinations. Flix Brewhouse, a profitable dine-in chain, credits its in-house brewed beers and gourmet burgers for its success. However, its Chief Revenue Officer Chris Randleman stresses that a steady flow of movies and a healthy exclusivity window are critical. "We need to have a healthy window so people aren’t just like, ‘Oh, I’ll just wait for streaming,’" he said.
Financially, the situation is tense. Real-estate expenses as a percentage of sales have surged by more than a third since 2019. While domestic (U.S.) box-office sales are expected to rise 3% to $8.8 billion in 2025, driven largely by higher ticket prices, this is far below the pre-pandemic peak of over $11 billion annually. Analyst Eric Wold of Texas Capital Securities notes that the industry likely needs to hit the $10 billion mark for theatre owners to return to pre-pandemic profitability levels.
Glimmers of Hope and Changing Habits
Despite the challenges, there are positive signals. Films targeting younger audiences, like "A Minecraft Movie," have performed well. A robust slate of upcoming sequels for franchises like Star Wars and Toy Story offers hope. Data also shows that Gen Z (ages 20-24) is increasingly going to the movies, forming a larger percentage of the moviegoing audience in 2025 compared to last year.
Loyalty programs are proving effective. AMC Stubs A-List, with nearly one million members who pay a monthly fee for multiple weekly tickets, is drawing people back. However, as member Ed Restrepo notes, packed houses are rarer now. "It’s not common to have theatres really sell out like that anymore, unfortunately," he observed.
The experience itself remains a unique draw. Moviegoers like 21-year-old Emanuel Lopez, who paid $30 for a ticket and soda to see "Avatar: Fire and Ash," acknowledge the cost but value the immersive dimension. Yet, for others like 20-year-old Angelica Cilio, cinema-going has become a "fun, once-in-a-while thing," with streaming being the default. The industry's future now hinges on a delicate balance: producing must-see big-screen spectacles, maintaining exclusive theatrical runs, and offering an experience compelling enough to justify leaving the couch.
