MNTN Research Peeks

    Step 1/2

    What’s the most effective TV ad you’ve ever seen, and why?

    Share your thoughts and see how they compare with other marketers’ answers.

    Step 2/2

    Insights will be shared in our in-depth report

    We'll collect every answer, analyze them all, and share the results.





    Thank you for sharing your thoughts with us!

    You’ve helped us shed light on what makes marketers tick. We look forward to sharing the results with you.

    You also requested a demo, so what happens next?

    An expert from MNTN will be in touch with you shortly to discuss next steps.

    Analysis

    What the Return to Movie Theaters Means for CTV Advertisers

    Abstract

    • While more people are returning to theaters, digital is still the main driver of the entertainment market. 
    • Franchise titles are the top choice for theater-goers, with Top Gun: Maverick topping the box office charts for the year so far.
    • Streaming is here to stay and is redefining the movie industry. Coda, an original title from Apple TV+, broke records when it won the Best Picture Academy Award this year.
    • The simultaneous release of titles in theaters and on streaming channels that offer ad-supported tiers create more opportunities for movie-lovers to enjoy these titles and advertisers to reach them while they’re watching

    March 2020 was a turbulent time for all industries, but perhaps one of the most common ones to make headlines was the movie industry. As movies made their premiere directly on streaming channels while quarantine orders were in place, it seemed as if movie theaters were coming to a swift end. Now, as the world continues to open up and consumers feel more comfortable picking up the activities they once enjoyed, ticket sales are rising once more. Franchises have been the driving factor in the return to the theater, with audiences buying tickets to see the next installment of their favorite storylines. And while the return is a hopeful upswing for movie theaters, the effects of streaming giants are here to stay, as original content makes waves in the industry.

    From 2020 to 2021, the theatrical industry doubled from $2.2 billion to $4.5 billion and is on track to increase even further for 2022. While the entertainment industry returned to its pre-pandemic size in 2021, theatrical still accounted for much less of the overall share, with digital making up the difference. Digital has continued to account for the bulk of the entertainment market, growing almost $10 billion in 2021 compared to 2019. Overall, these numbers speak to the strength of the streaming industry. While there has been a slight return to theaters over the past year, streaming is still the main driver of the industry.

    Franchises are Bringing People to the Theaters

    The biggest draw to the theater has been franchise titles. To date, the 5 top grossing movies for 2022 have all been part of a broader franchise, with Top Gun: Maverick topping the charts. Franchise movies are the perfect draw back to the silver screen. Audiences who may have been hesitant to return to theaters in the past are more likely to pick a return title that will be a guaranteed hit as their first venture out. These titles feature beloved characters played by A-list actors, drawing crowds who want to keep up to date with their favorite worlds or revisit a classic story without having to wait for the film to come to streaming. With smaller or lesser-known titles, viewers may find they don’t mind waiting for the film to be available on their favorite streaming device to watch.

    Streaming is Just Getting Started

    Despite the return to theaters, streaming and the global pandemic have fundamentally changed the way that people consume movies. Apple TV+ showed the strength of the streaming market this year by having the first ever streaming original movie to win an Academy Award for Best Picture. Coda, a drama that premiered on Apple TV+, won several awards at the Academy Awards, signaling a dramatic shift in the industry. Despite other streaming platforms, like Netflix and Amazon, being nominated in the past, Apple TV+, a relative newcomer compared to the other two channels, was the one to break this record.

    While not a hard and fast rule, franchises and summer blockbusters aren’t often the recipient of the Best Picture award. Dramas often feature heavily in this group, a genre that doesn’t drive much theater attendance. Movies within the drama category only drove 5% of box office revenue in 2021. With the strong swing towards streaming premieres, dramas may find their audiences in the living room rather than the theater. And streaming platforms can take advantage of this shift, promoting non-franchise titles with premieres on the TV screen.

    Movie Lovers Can Stay Home

    Streaming platforms not only offered their own originals, but also a place for movie-lovers to safely watch new releases during the height of the pandemic. Many films that made their debut in theaters were also available on streaming the same day. Trolls World Tour was one of the first, debuting in April 2020, both in theaters and available for purchase on-demand.

    However, many entertainment companies took advantage of their own streaming platforms to distribute their newest titles. Disney tested a hybrid model, allowing Disney+ viewers to purchase titles like Mulan during its theatrical release so they could avoid the theater. As the pandemic continued and people stayed away from the theaters, many companies included the newly premiered titles within a standard subscription, including In the Heights on HBO Max and Paw Patrol: The Movie on Parmount+. 

    Notably, these services, Disney+, HBO Max, and Paramount+, all have an ad supported tier, though some of them announced these lower-priced tiers later into the pandemic. The combination of ad-supported tiers plus theatrical releases makes these new films even more accessible. An ad-supported subscription may cost $4.99 a month, whereas one movie ticket costs at least twice that. Now consumers have more access to these big-name films–and advertisers have another way to reach them.

    What This Means for Advertisers

    With the shifting tides of movie viewing, advertisers have a new opportunity. No longer do they need to resort to in-theater advertising to capture a movie-going audience. Instead, they can reach their audience across the streaming channels offering these premiere titles. The broader reach and easy availability of movies on these channels means that there is more inventory for an efficient way to reach this key audience.

    Subscribe to the MNTN Research Weekly.

    Sign up to receive a weekly feed of curated research, sent straight to your inbox.