Why Movie Theaters Are Still in Trouble After a Disappointing 2025

For much of the past year, the movie theater business told itself that 2025 would finally be the rebound. The pandemic chaos was supposedly in the rearview mirror, the release calendar looked healthier, and audiences were expected to return in full force.

Instead, the box office barely budged. As the year winds down, 2025 is tracking neck-and-neck with 2024 and will land well short of the $9 billion domestic total analysts once saw as a given. Before COVID, North America routinely cleared $10 to $11 billion. Falling this far behind again isn’t a good sign.

“There’s an unfortunate trend, which that we just can’t get the industry to $9 billion at the domestic box office,” says Mike Sherrill, the chief operating officer of Alamo Drafthouse. “It looks like it’s going to be two years in a row that the industry flatlined.”

Part of the problem is being blamed on franchise fatigue setting in across some of Hollywood’s most reliable brands. Marvel’s second-tier heroes failed to carry the load. Captain America: Brave New World and Thunderbolts both lost tens of millions, while The Fantastic Four: First Steps only scraped together a modest profit.

Even the year’s biggest sequels underperformed by historical standards. Avatar: Fire and Ash sits at $760 million and counting, Wicked: For Good reached $504 million, and Jurassic World Rebirth topped out at $869 million. Those are strong numbers in isolation, but all fall short of what earlier entries in those series delivered. Sequels obviously aren’t enough to keep theaters afloat anymore.

It’s tempting to point the finger at superhero movies and call it a genre collapse, but Hollywood has seen cycles like this before. Musicals, westerns, and raunchy comedies all had eras where they ruled multiplexes before cooling off.

What has exhibitors genuinely anxious right now is something little bigger. If Netflix secures government approval for its $82.7 billion acquisition of Warner Bros., the entire theatrical model could be reshaped.

Netflix co-CEO Ted Sarandos has already made it clear that he thinks theatrical “windows” are too long and expects them to “evolve” in a more “consumer friendly” direction. No one in the exhibition business is confused about what that implies.

During COVID, studios shortened the gap between theatrical releases and home viewing. Audiences adapted fast and many never came back. If that window shrinks even more, theaters lose the one advantage that still sets them apart. This is an existential threat for theaters.

There were some glimmers of hope, though. China reopened its doors to select Hollywood releases, with films like Zootopia 2 and Avatar: Fire and Ash finding traction in a market that had largely iced out U.S. studios since the pandemic.

Still, China doesn’t need Hollywood to thrive. The year’s biggest movie worldwide wasn’t American at all. The animated sequel Ne Zha 2 crossed $2.1 billion globally, even though most U.S. audiences wouldn’t recognize the title.

Back home, families showed up in force. PG-rated movies dominated again, marking the second straight year they outperformed PG-13 releases. A Minecraft Movie finished just shy of $1 billion, while Lilo & Stitch and Zootopia 2 both crossed that mark. Anime also proved to be a major draw, with Demon Slayer: Infinity Castle and Chainsaw Man delivering back-to-back wins for Sony-owned Crunchyroll.

“What happened with Demon Slayer is great because it opens a new category of film,” says Sherrill. “About 49% of the audience was under 24 years old. That’s so important because we need to be thinking about what’s going to be relevant for the next generation of moviegoers.”

Superheroes didn’t disappear entirely, but their dominance has clearly faded. The latest Captain America suffered from a messy post-production and took a beating from critics. Even better-reviewed Marvel entries like Fantastic Four and Thunderbolts couldn’t reach pre-pandemic highs.

Marvel Studios is betting big on 2026 with Spider-Man: Brand New Day and Avengers: Doomsday, which brings back Robert Downey Jr. and Chris Evans, but you can bet they’re feeling the pressure!

DC Films had a steadier year. Superman, directed by James Gunn, earned $616 million and did exactly what it needed to do. It reset the tone for a franchise that had spent years being criticized as overly grim and convoluted. Gunn and Peter Safran, who took control of DC in 2022, aimed to recapture the optimism of Richard Donner’s 1978 Superman.

“We needed to have the DC logo be synonymous with quality again,” Safran says. “For too long, our movies had suffered from real inconsistency. It takes time to develop a positive reputation, but this put us on the right track.”

The real test comes next year when DC rolls out riskier bets like Supergirl and Clayface, neither of which carries the instant recognition or popularity of Superman.

Outside of tentpoles, adult-oriented dramas struggled badly. Films like The Smashing Machine, Bugonia, and Springsteen: Deliver Me From Nowhere barely made a dent.

Horror was the exception. Warner Bros. scored big with Ryan Coogler’s Sinners and Zach Cregger’s Weapons, both of which connected with audiences after strong reviews.

Awards attention also helped Paul Thomas Anderson’s One Battle After Another clear $200 million worldwide. Even so, its massive budget and marketing spend mean it’s still staring down a $100 million theatrical loss once revenues are split with exhibitors.

“The good news is that when a movie catches the eye of a filmgoing audience, they are ready and excited to go. We saw all kinds of movies work this year,” says Adam Fogelson, chair of the Lionsgate Motion Picture Group.

“The challenge is if you have something that, for whatever reason, doesn’t spark people’s interest, the floor is non-existent, regardless of the level of star power. You can have a movie that the audience likes and no one goes to see.”

Star power itself looks less reliable than it used to. Tom Cruise couldn’t save Mission: Impossible – The Final Reckoning, which became one of the year’s biggest bombs and may put Ethan Hunt on ice until budgets come back down.

Meanwhile, Timothée Chalamet helped turn A24’s Marty Supreme, a period film about ping pong, into an unlikely holiday hit thanks to a wild promotional campaign involving orange blimps and viral videos that pulled in TikTok fans and arthouse crowds alike.

Theaters leaned heavily on premium large formats to survive. IMAX and Dolby screens, which command higher ticket prices, made up 50 to 60% of sales for spectacle-driven releases like Avatar: Fire and Ash and F1: The Movie. Even with overall attendance flat, IMAX posted its best year ever with $1.2 billion globally.

“We branched out in genres,” says Imax CEO Richard Gelfond. “We were known more in 2022 and 2023 for superhero movies and sequels. This year, we did a lot more in horror and family films. Three of the four biggest animated films in our history were this year, which I don’t think is a coincident. The public’s attitude is expanding to the kind of films they like to see in Imax.”

Exhibitors have also padded schedules with repertory screenings and anniversary releases. Alamo Drafthouse ran Kill Bill, Back to the Future, and Jaws reissues and still managed to pace 5% ahead of the broader industry. But no one believes nostalgia will save theaters.

“I would like to think that studios and distributors are looking at the trends and seeing that original, fresh stories are working,” says Sherrill. “So don’t just give me 20 more movies. Give me 20 more of the stuff that’s meaningful for people.”

That hope is now pinned on 2026. In 2025, the comeback simply didn’t happen.

Source: Variety