Recently, there’s been a lot of conversation about the current state of movies. While things aren’t super dire to the point of a collapse, there are concerns regarding how audiences aren’t showing up as much to theaters as they used to during the last few decades. While we can point to the impacts of the pandemic or issues with the rising costs of going to see a movie, one key problem that has a stranglehold on the theatrical experience and is the most complex of these issues is that of streaming and digital distribution.

For some time, it seemed like streaming was going to be the next step in how audiences would interact with film and television. Every company under the sun launched their services hoping to hop onto the gravy train that seemed to have started. However, this appears to have been a situation that Hollywood misread. While streaming can be successful, studios might have dumped too much into it and it isn’t able to make the amount of revenue they wanted.

The desire for streaming by studios was driven by the perception that it needed to be their replacement of sorts for home media. Home media like DVDs served as a major area of profit for film studios outside of merchandise and the initial box office runs. However, more and more people are using digital platforms to watch movies as opposed to owning them and home media sales have gone down over the past few years. As a result, streaming subscriptions seemed the next logical place to get customers to spend more for movies since people were already using a few. The issue is that physical media purchases are for a single movie or show and a consumer would have to make multiple purchases if they wanted more things to watch at home. With streaming, there is only a flat fee and even then, given the number of services, many people only subscribe to a couple. Studios were too eager to have audiences use streaming as a complete replacement without realizing how different they are in terms of usage and that it couldn’t fill the void of physical media in terms of profitability. The divided services resembled how cable was modeled more than anything and that’s not an appealing option given that the former has also gone down as well. There is eventually a ceiling of subscribers and it’s why studios have both raised prices and rushed out projects to get people not subscribed to join. Even so, audiences have still adapted to using streaming more and we are now at a place where plenty of people are mostly using streaming services, but not enough to sustain the business in the way many intended.

An unintended consequence of the rush to get people attached to streaming, however, is that many have become more willing to wait for something to come out on digital or streaming than going out to theaters. During the pandemic, this made sense since not only would it allow projects on the shelf a chance for release during a time of uncertainty for theaters, but new releases would drive traffic to newly created services. Families would see that a new Disney or Pixar film would be available directly at home and would be willing to subscribe to the streaming service for the option. Now, however, it seems like this has become a double-edged sword. While the aspect of services being marketed as the home of certain content has been a boon for attracting certain audiences to their services, these are the same audiences that would have seen these films in theaters in the first place. Films like Lightyear, Strange World, and Encanto were all middling disappointments in theaters and only got more attention once they came to Disney+. For families who see theaters as a larger expense, streaming is an easier option for them in terms of providing the entertainment their kids need.

That’s not to say that films like this can’t become successes. Elemental and Puss in Boots: The Last Wish both made a healthy profit over time despite their initial short weekends. However, these feel like the exception to the rule, especially regarding how studios have been quick to pull the trigger on digital releases. The Fall Guy, a recent release this year, opened to middling numbers and was put on digital-only a few weeks after it opened in theaters. Studios have been conditioned to expect huge opening weekends and are quick to throw films that don’t meet expectations onto digital or streaming under the perception that it will make up for lost profit. However, this mindset is problematic since many films don’t make all of their money near the start of their run. Many movies can accumulate a profit over time due to being out in theaters for months. Top Gun: Maverick is a great example of this since while it was a big success at the start, it grew to a billion-dollar hit because it remained in theaters for a long time. The aforementioned Puss in Boots: The Last Wish and Elemental are also examples of this since both opened to poor weekend numbers, but made much more over time even with the former being put on digital relatively quickly. And yet, the process of studios rushing to move films to digital, like with streaming, is training audiences to expect them at these places instead of going to theaters.

While it makes sense that these models were necessary during the pandemic, it’s apparent that they both don’t provide enough to sustain the business and have started to take away from the larger element of the box office. Not to mention that the constant reliance on brand names has resulted in people being burnt out on franchises that were once box office titans. Marvel went from having billion-dollar hits yearly, to now being on a downturn mostly due to the oversaturation of streaming shows that were mostly prioritized to ensure Disney+ got subscribers. Even in cases that aren’t franchise-centric though, the option of streaming and digital has made more wary of the prospect of theaters since it feels more convenient and less expensive. If it isn’t a huge event or something that captures the cultural zeitgeist, then audiences aren’t going to show up as much. This wouldn’t be as big of an issue if it wasn’t for the bloated budgets of many projects so even if a lot of people go to see a movie, even a modest run wouldn’t be enough to recoup the huge costs.

Hollywood isn’t collapsing, but it is going through a rough transition. Streaming wasn’t the new money-printing machine studios hoped and they are trying to adapt from the fallout of their efforts. I feel that things will be chaotic for a while, but I recognize that films will always have an audience and change is always going to happen. I have confidence that audiences are still there for the theater experience and it’s just going to take some time for it to settle. I do enjoy the convenience of streaming, but going to see a movie on a big screen is unmatched and while I don’t think it will ever go away, it feels less valued at the moment and I hope people realize this soon.