How North American cinemas are aiming to “eventise” the theatrical experience

Reinvesting in the maintenance and upgrade of cinemas “is something our folks do on a regular basis”, says Michael O’Leary, head of the exhibitor trade body long known as the National Association of Theatre Owners (NATO), which in March rebranded as Cinema United. But last September, NATO saw the need to put a figure on that activity, announcing, after canvassing its 600-plus exhibitor members for their capital expenditure targets, that eight top North American cinema chains would collectively invest more than $2.2bn in their circuits over the coming three years.

The idea behind the announcement, says Cinema United’s president and CEO, was to “acknowledge that coming out of a difficult economic time there’s probably a renewed emphasis on [reinvestment], because there’s a little more capital available to do it”.

“For the first time in five years, we’re not dealing with some outside event which is impacting our business in a negative way,” points out O’Leary, following the pandemic, and then a period of biting inflation, plus the writers and actors strikes that decimated the 2024 release schedule.

AMC, North America’s biggest exhibitor with around 7,300 screens, has so far made the biggest individual investment plan. The publicly traded company (which also owns Europe’s 2,500-screen Odeon circuit) has said it expects to invest between $1bn and $1.5bn globally over the next four to seven years.

Touted as ‘AMC’s Go Plan’, the initiative marks a move to “play on offense once again”, said AMC Theatres CEO Adam Aron on a recent earnings call, after “four gruelling post-pandemic years”. Elements of the plans are “designed to leverage our strengths and accelerate our recovery”, explained Aron, “aligning with our expectations for a rising and more consistent box office over the next several years”.

Premium experience

The plan calls for up to two thirds of the company’s 220-plus Imax locations to be upgraded to the Imax with Laser format, a potential three-fold increase in the number of Prime at AMC house-brand premium large-format (PLF) screens, and the installation of luxury seats in a number of cinemas.

On the earnings call, however, Aron added a caveat. He said the company, still laden with $4bn of debt after its post-pandemic financial struggle, will for the time being keep its annual capital expenditure budget to “around $200m”, at the lower end of the range implied by the Go Plan.

“The returns on some of these growth initiatives is so high that we would love to be able to convince people to trust us with more growth capital,” said Aron. “But until we have access to growth capital, we’re going to keep capex tightly constrained.”

Neither AMC nor second- and third-largest North American circuits Regal (owned by the UK’s Cineworld Group) and Cinemark made executives available to Screen International to discuss their investment targets and strategies, though Cinemark has announced publicly that its share of the reported $2.2bn will be around $200m a year.

Some of the region’s mid-level exhibitors, though, are more forthcoming about their plans — ones that involve putting money into everything from laser projectors to pickleball courts.

Canadian circuit Cineplex, whose 1,600-plus screens make it North America’s fourth-biggest exhibitor, declines to put a figure on its reinvestment plans. But in its latest earnings call, it predicted total 2025 capital expenditure of c$60m-c$65m ($42-$45m), with that money from the company’s own resources being supplemented in some cases by contributions from landlords. “As the box office gets stronger,” says president and CEO Ellis Jacob, “we will look at investing more into these different opportunities.”

Those opportunities include the creation of more Cineplex VIP Cinemas, with enhanced food and drinks service, and more of the company’s branded Junxion locations, which combine a cinema with live entertainment and gaming. Under its amusement and leisure division, Cineplex also operates branded Rec Room and Playdium entertainment centres, some of which are in close proximity to its cinemas.

A big part of Cineplex’s investment focus will be on adding more PLF auditoriums. The circuit already includes more than a hundred D-Box screens, 29 Imax screens, a number of 4DX and ScreenX venues as well as nearly a hundred screens under Cineplex’s own UltraAVX brand. In the fourth quarter of 2024, the circuit took more than 41% of its box office from the premium-screen auditoriums.

“That’s significantly higher than any of our peers,” says Jacob, “and that’s because we’ve created so many different ways for our guests to enjoy the experience. As we have additional capital, we will look at increasing that experience.”

Offering a variety of PLF options rather than focusing on just one or two is the preferred strategy for Cineplex, adds Jacob, because “what works best depends on the film and on the audience”.

With just over 550 screens in 16 US states, B&B Theatres has a smaller footprint than the top North American exhibitors, but it still plans to put about $100m into remodelling, acquiring and building cinemas between now and the end of 2026, reports president Brock Bagby.

Existing sites will be upgraded with facilities such as laser projection, recliner seating (already in 95% of the circuit’s screens) and PLF offerings such as B&B’s own Grand Screen format, which combines 50ft- to 70ft-wide screens with heated recliner seating and DTS:X immersive audio.

With its new-build venues, B&B is embracing the family entertainment centre concept that has become a significant trend in an exhibition sector striving to lure audiences back into the cinemagoing habit. “That’s our focus going forward,” confirms Bagby, “building more of those all‑in-one entertainment centres that can be your entire day out if you want it to be.”

B&B has four such venues in operation and another five under construction, with the latest to open, in Dallas, combining 12 screens offering PLF options and heated recliner seating with 16 bowling lanes, a games arcade, three bars, two restaurants and pickleball courts.

Entertainment upgrade

The hope is to get audiences to “linger longer” at the company’s venues, explains Bagby. “Historically, you walk in, you get your popcorn, you watch a movie and you leave,” he says. “These options allow you to hang out longer, and while you’re there you might grab another beer or order some food. All of that is extra income we never had before.”

Family entertainment centres can provide an alternative source of revenue for exhibitors during lulls in the film release calendar, suggests the B&B president. And for landlords and developers who are in some cases partnering with B&B to fund construction, all-in-one entertainment centres managed by a single tenant offer attractive economies of scale. “That is what’s getting developers so excited,” says Bagby, “and that’s where we’re getting a lot of traction.”

Even when consumers come to a centre just for its non-cinematic entertainment options, “while they’re there, they’re seeing advertisements for the big upcoming films,” argues Bagby. “So there’s a lot of synergy. The more we can eventise and cross-promote across the space, the better it is for everyone.”

That kind of thinking should find favour with the studio and independent distributors, which provide exhibitors with the films that will remain the circuits’ primary revenue drivers, even when bowling and pickleball top up the coffers.

Some of North America’s biggest exhibitors have been “behind the curve” on reinvestment, suggests one distributor. “When you run that type of business, it requires reinvestment — not every five years, not every 10 years, but every year, for maintenance, for deferred maintenance and for amenities,” they point out. “That reinvestment needs to be throughout the building, not just in the premium screens. It’s the only way to maintain the standards people expect when they go to a movie theatre.”

The goal, suggests Kevin Grayson, worldwide president of distribution at Lionsgate Motion Picture Group, should be to make cinemas as special as the films they are showing. “Exhibitors need to reinvest this money to eventise their theatres,” he says. “In the same way the circuits are asking us — and the consumer base is asking us — to eventise our content, it’s essential they eventise their theatres.”

In the end, it will be the movie- going audience that passes judgment on how wisely exhibitors have rein- vested in the cinema experience. Cinema United’s O’Leary, for one, appears confident audiences will approve. The $2.2bn of reinvestment planned by the trade body’s exhibitor members “is just the beginning of the story”, he says. “The next part is the best part, which is that as a result of the [reinvestment] this is what you as the movie consumer will get out of it.”