Movie theaters aren’t going anywhere, and it’s partially due to their weird architecture

Between at-home streaming, strikes in Hollywood that halted film productions, and a pandemic that required would-be moviegoers to stay home, theaters have not had an easy time. Theater chains have closed dozens of theaters in recent years, and, as of last year, ticket sales were still one-third lower than in 2019.

And yet despite all that, movie theaters persist, and part of the reason they haven’t died out might actually have to do with their unique architecture.

Kate King covers real estate for the Wall Street Journal. She joined Marketplace’s Kristin Schwab to talk about how the architecture of theaters is playing a role in keeping them in business. A transcript of their conversation is below.

Kristin Schwab: So I never really thought about kind of how odd movie theaters are as a space until I read your story. What makes them so hard to repurpose?

Kate King: Well, if you think about it, movie theaters are built with a sloped concrete floor for stadium seating so everyone has a nice clear view of the movie. And movie theaters have no windows; they’re big, dark rooms. So that’s great for watching a movie, but it’s not so great for turning that real estate into something else.

Schwab: So what does that mean when it comes to rent prices for these spaces and who has the power there?

King: So it’s really interesting because retail more broadly is doing quite well. Right now, from a real estate perspective, retail landlords are in kind of a rare position of power in many respects. They can command higher rents than in previous years. Availability for retail space, broadly, is at an all-time low. However, movie theaters are a little bit of a different animal. Retail landlords really can’t use movie theaters for anything else unless they want to tear them down completely. So rather than just leaving the spaces vacant, they’ve kind of been forced, when chains go into bankruptcy or leases are up for renewal, to agree to rent reductions.

Schwab: Well, what are theater owners doing to bring crowds back?

King: Movie theater owners are definitely making the movie theater an experience that you can’t get at home on your couch with your big screen. So they need to convince people that it’s worth the money and the time and possibly sitting next to someone who’s coughing or laughing too loud to come into the theater. So, even at the most basic level, they are ripping out those old, cramped-together seats, and they are putting in the big comfy recliners. Sometimes these are heated seats, sometimes they are 4D seats in the sense that they rumble around and water sprays out at you to like, I guess, make a more immersive movie-going experience. They’re going beyond just like the popcorn and candy and they’re adding in alcohol and other types of food that you can eat while you’re watching, or, in some cases, have delivered to your seat. And then some movie theaters are, you know, kind of diversifying their properties and making sure that they’re not just totally reliant on movies to bring in the revenue. So there’s one theater in Texas that recently opened which includes pickleball, bocce courts, bowling alleys, a rock climbing wall, and, of course, lots of restaurants and bars.

Schwab: It almost doesn’t even sound like a movie theater anymore. I mean, do you think that cinema-going is changing and will just be different in the future?

King: I think there’s definitely a push towards this more — I think the industry term is “family entertainment center,” where it’s really focused on, you know, the experience. So all of retail broadly is focused on making sure you’re offering something that can’t be gotten online for cheaper. So I think there’s definitely the idea of continuing movies in a way of making it a broader, flashier experience.

Schwab: It almost seems like if all of the things, the pandemic, streaming, whatnot, didn’t kill the movie theater, nothing will. Do you think that’s true?

King: I think there will always be a place for movie theaters. I think there’s always going to be people who want to go and see the big blockbusters or, you know, even indie films in theaters. So it does seem like they’re indestructible to a certain degree. I don’t know if we’ll ever see the huge return of crowds on opening night the way it was maybe 10 or 15 years ago. Maybe there won’t be as many movie theaters, as in the past. But for sure, I think this real estate will survive in some form long term.