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Industry Leaders Gather at CinemaCon Amidst Market Challenges

This week, CinemaCon returns, serving as the premier annual trade show for movie theater owners. In a year positioned as the beginning of a recovery for an industry plagued by pandemics and strikes, Michael O’Leary, CEO of the freshly rebranded Cinema United (formerly NATO), will lead discussions with theater owners, industry vendors, and studio executives focusing on the future of cinema.

However, the early part of 2025 has been hindered by a notable downturn reminiscent of past economic challenges. Projections suggest that the domestic box office for the first quarter will hover around $1.4 billion, reflecting a 12% decline from $1.6 billion in 2024 and a 19% drop from the impressive $1.72 billion seen in 2023.

In contrast, pre-pandemic figures reveal an even starker picture. From 2004 to 2019, first quarter totals consistently surpassed $2 billion in North America, and only the pandemic-induced shutdown in March 2020 interrupted that streak.

As the industry grapples with evolving viewer preferences that have complicated ticket sales for non-franchise films, theater operators remain hopeful that a vibrant summer and holiday season can help revitalize attendance. With high-profile sequels and intellectual property-based films like “Superman”, “Jurassic World: Rebirth”, and “Avatar: Fire and Ash” slated for release, theaters are banking on these titles to draw crowds back into auditoriums.

While theaters are not on the verge of extinction, the market landscape has shifted significantly, forcing O’Leary to confront the ongoing challenges head-on. In his inaugural year leading the group, he has initiated a campaign urging major theater chains to invest $2.2 billion collectively to modernize cinema facilities. This initiative aims to address consumer grievances regarding seating, sound quality, and overall cinematic experience — issues that have contributed to some audiences opting for streaming alternatives.

Additionally, O’Leary echoed the sentiments of AMC CEO Adam Aron and other industry leaders who have called on studios to enhance the variety and volume of films released in theaters to foster greater attendance and reduce the potential for future downturns.

However, given the financial struggles faced by studios like Warner Bros. and Paramount amidst impending mergers, it remains uncertain how receptive these studios will be to such suggestions. In contrast, Amazon MGM Studios plans to release at least 12 films annually in theaters—a strategy that could compensate for the diminished output of 20th Century Fox, which has significantly reduced its theatrical releases following its acquisition by Disney in 2019.

O’Leary elaborated on Amazon’s anticipated debut at CinemaCon, the industry’s ongoing refurbishment efforts, and the reasoning behind rebranding to Cinema United, a name that avoids confusion with a prominent political organization. In a candid interview, the conversation explored the motivations behind the change and the implications for the industry moving forward.

Dialogue with Industry Leaders

Question: To what extent did the name change from NATO to Cinema United stem from a desire to avoid confusion with the political organization?

Indeed, that was a contributing factor. The distinction has been a long-standing issue; when you mention NATO, most people think of the military alliance rather than theater owners. Our goal was to craft a name that accentuates our mission to promote cinema. Cinema United offers a fresh and modern identity that aligns with our vision for the industry’s future, and it alleviates the need for clarifications regarding our name and purpose.

Question: With the first quarter box office down by 12% compared to last year, did this lead to altered expectations for the year?

We approach the year with a conservative lens without overemphasizing any single film or specific timeframe. While the first quarter did meet expectations of being slow, we believe that a more optimistic narrative will emerge as the year progresses, particularly with the anticipated energy surrounding the summer and holiday releases.

Question: Given the repeated calls from executives for more films to screen, how many additional releases do you foresee in the coming years?

While we don’t have a definitive answer, we remain hopeful for an increase in the number of films produced, especially as we look towards 2026 and beyond. This year’s slate is projected to surpass previous years, and new players like Amazon MGM are poised to contribute significantly to theatrical output. We’re excited to witness their evolution in the market.

Question: Can Amazon MGM effectively fill the gap left by 20th Century Fox?

Absolutely. Their commitment to maintaining a substantial film slate each year could indeed help mitigate the gap created by Fox’s merger with Disney. Consolidation remains a significant concern for us, and we continue to communicate our worries to policymakers, emphasizing the potential impact on film diversity and availability.

Question: Infrastructure investment has been a focal point of your leadership this year—what developments are anticipated at CinemaCon?

Different theater chains have already begun making critical investments, from upgrading seating to enhancing projection technology, extending from large circuits to small community theaters. We will continue to highlight these upgrades and share progress reports with the public to bring attention to the special work being done in theaters across the nation.

Question: With the recent plea from Sean Baker during the Oscars for more theatrical releases, when do you foresee a stabilization in the market, alleviating closures?

I would argue our industry hasn’t reached a point of instability. The pandemic impacted many theaters, but we’ve also seen successful transitions where circuits have revitalized theaters post-acquisition. The ebb and flow of theater numbers is consistent with industry patterns. Factors pivotal to success include having sufficient film content, which significantly influences operational viability. Successful operators, like our Marquee Award winner, Sean Gamble from Cinemark, exemplify how to thrive even amidst challenges. His leadership highlights the potential for success during even trying times.

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