Theater Owners Chief Warns Studios Against Relying on Blockbusters: ‘A Variety of Movies’ Is ‘Critical’ for Box Office

Rebecca Rubin
·3 min read

Michael O’Leary, the new president and CEO of the National Association of Theater Owners, is encouraging Hollywood to think smaller.

Don’t get him wrong — he loves Marvel, “Mission: Impossible” and “Fast & Furious” as much as the next exhibitor. But O’Leary is urging the major studios to prioritize more than just the tentpole properties that prop up the box office. Those mega-budgeted films are great, of course, but he believes that a “variety of movies that appeal to moviegoers is critical” to the survival of the box office.

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“It is not enough to rely solely on blockbusters — we must have a strong and vibrant market for movies with smaller or medium-sized budgets,” he said on Tuesday morning at CinemaCon, the exhibition trade show held annually in Las Vegas. He pointed to last year’s offerings of Cord Jefferson’s Oscar-winning literary satire “American Fiction,” romantic drama “Past Lives” and Japanese action-adventure “Godzilla Minus One” as recent examples of mid-budget successes.

This is the first CinemaCon for O’Leary, who joined NATO in 2023 from the video game trade organization Entertainment Software Association. Since he took over as the main lobbyist for the exhibition industry, he says that Disney, Warner Bros. and other distributors have “consistently reaffirmed” their commitment to the big screen. It’s a change of pace from their pandemic-era strategy to shorten the theatrical window and bring movies more quickly to streaming services.

“We know that a movie that begins its journey with theatrical exclusivity is more successful in every subsequent ancillary platform,” O’Leary said from the Colosseum Theatre at Caesars Palace. “This should appeal to people who want as many film fans as possible to see their movies, but also to people that want to make money.”

O’Leary also stressed that cinema owners are in dire need of economic assistance. Despite the smash success of “Barbenheimer” and “The Super Mario Bros. Movie” and other 2023 blockbusters, the box office has yet to restore its pre-pandemic glory. Exhibitors are facing another shortage of big-screen releases after last year’s strikes forced Hollywood to delay several blockbusters. As a result, movie theater analysts don’t expect the industry to recover until 2025 (at best).

“Keeping pace with the increasing demands of the moviegoing public is not new, but it does require capital. And to our friends in the financial industry, investing in the talented people that run the innovative theatres across this country and the world is a smart investment,” O’Leary said. “Getting more capital into the system will benefit everyone—creatives, studios, exhibition, local communities and, most importantly, movie fans.”

Also during Tuesday’s State of the Industry address, Motion Picture Association chairman and CEO Charles Rivkin underscored the dangers of piracy on the business. He estimates that online piracy costs theater owners more than $1 billion at the box office. So, the MPA is focusing on working with members of Congress to “enact judicial site-blocking legislation here in the United States.”

Site blocking, he explained to the crowd of theater owners and studio executives, disrupts the connection between pirates and their intended audiences. He contends that this process would only impact sites that host illegal content, adding that in identifying such sites “detailed evidence” would be required and perpetrators would be allowed to appear in a court of law.

“Site-blocking is a common tool in almost 60 countries, including leading democracies and many of America’s closest allies,” he said. “There’s no good reason for our glaring absence. No reason beyond a lack of political will, paired with outdated understandings of what site-blocking actually is, how it functions, and who it affects.”

To close out the opening remarks of CinemaCon 2024, O’Leary returned to the stage to emphasize his optimism about the future of the movie theater business despite the difficult realities of the marketplace.

“The future of this industry is limited,” he said before correcting his Freudian slip. “Um, limitless.”

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