In 2025, movie theater sales are steadily rebounding from the declines seen during the pandemic and the labor strikes of 2023 that impacted film output in 2024. This year's Memorial Day weekend sales — a key indicator of summer box office success — reached record highs for several major theater chains, making it the strongest holiday weekend in their company history. And industry executives predict box office returns could reach pre-pandemic levels.

At the same time, the streaming landscape is being reshaped by changing consumer viewing habits and preferences due to intensifying competition and economic pressures. Parks Associates research shows the streaming stack has been flat for several years, with streaming video subscription penetration plateauing at 89% of US households and each streaming household subscribing to ~5.7 paid streaming services. 

Streaming’s early promise centered on an ad-free experience at a fraction of the cost of pay TV or a night at the movies. That value gap has narrowed, with subscription fee increases and limits on password sharing and the number of screens allowed. Rising cost of living has led users to cheaper ad-supported plans to afford multiple SVOD services. It also leaves space for other video-based entertainment options, including movie theater subscriptions. These services aren’t new, but they’ve become central to theaters’ retention strategies as consumers balance in-person and at-home viewing. 

Experience as a Differentiator

Theater operators recognize that content alone is no longer enough, especially when most of what they screen will eventually land on a streaming platform. This has pushed them to find another path for differentiation and profitability, in the experience economy — offering immersive, movie-centered events that make the film just one part of a night out.

This strategy reflects broader cross-industry trends, where growing consumer demand for immersive, personalized experiences is driving innovation. In hospitality, hotels are curating more social and interactive experiences: rooftop film screenings, local chef pop-ups, mixology classes, wellness retreats, art installations, and design-forward lounges. Airbnb has relaunched its Experiences platform, connecting travelers with locally hosted activities that reposition the stay as an experience in itself and creating opportunities for deeper cultural engagement. 

A Shifting Value Proposition

Similarly, theaters are leaning even more into a curated experience built around the main offering. An experience that is evolving from simply a value-add into a core strategy. Examples include themed screenings and fan nights, premium dine-in options, immersive environments with props and AR features, and co-branded screenings hosted by brands and influencers. Streaming — not even live streaming — cannot deliver this kind of experience.

This creates greater opportunity for studios — those with either the setup or the partnerships to release films in theaters — to firmly re-establish the theater-first window as a premium entry point within the streaming ecosystem. Hybrid release models between theaters and streaming are already the norm. Recent examples include Lilo & Stitch and Mission: Impossible – The Final Reckoning. But the opportunity lies in the experience itself playing a competitive role in building brand affinity and platform adoption before the film reaches its streaming home.

As the streaming market matures and competition continues to escalate, the most successful streaming strategies may not start at home. They may start in a theater seat: an experience that builds momentum and platform value before the film even reaches its streaming destination.

This week, Parks Associates is participating at The StreamTV Show, where Parks Associates analysts are sharing data-driven perspectives on the future of video and the evolving streaming ecosystem.

Join Parks Associates on August 21 for Consolidation & Aggregation: Transformation of Streaming Services, the next virtual session in its Future of Video conference series. Register here to learn about the future revenue streams and how businesses can leverage these changes to enhance their market position.