Consumers want to watch movies at home — no lawsuit will change that

Why the Hollywood Merger Lawsuit Misses the Point About How We Watch Movies

Provpnadvice.com – There I was, standing among hundreds of faceless soldiers in the climactic invasion sequence of last summer’s “Superman” film. Technically speaking, I was in the movie—though you would never know it from the final cut. As someone whose office walls are adorned with decades of Superman artwork and who has spent a lifetime devouring comic books, being part of that production was nothing short of thrilling. I even penned an opinion piece defending the film’s narrative as something deeply rooted in American storytelling traditions.

Yet despite all this involvement, I never stepped foot inside a cinema to watch “Superman.” Instead, I waited several months and viewed it from my couch. The mathematics simply do not work in favor of theatrical experiences anymore. The costs have become prohibitive, and the convenience factor heavily favors streaming platforms. This same calculation prompted my household to pass on “Moana 2” and its recent live-action counterpart, even though my six-year-old daughter had watched the animated original more than a hundred times and had dressed as Moana for Halloween three consecutive years. We offered her theater tickets for both films, but she politely declined, preferring to wait until they arrived at home.

The Lawsuit That Doesn’t Understand Consumer Behavior

This personal experience informs my deep skepticism regarding the legal challenge mounted by twelve state attorneys general seeking to prevent Paramount Skydance from acquiring Warner Brothers. The lawsuit’s central premise rests on the notion that this merger threatens theatrical exhibition itself. The attorneys general argue that combining two of Hollywood’s five major studios will inevitably lead to inflated ticket prices, reduced theatrical releases, and diminished variety for moviegoers.

While there is intellectual substance to concerns about industry consolidation harming consumers, this particular case is fundamentally misguided. The problems they identify already exist, and they are not the result of anti-consumer market manipulation. Rather, the studios have become their own greatest adversaries. Consolidation will not exacerbate these issues.

Decades of Decline, Not Recent Mergers

The numbers tell a compelling story. American moviegoing reached its zenith in 2002, when approximately 1.6 billion tickets were sold—roughly five per person in the United States at that time. By 2019, just before the pandemic struck, that figure had dropped to slightly over three tickets annually. Last year, theaters sold only 769 million tickets, representing about two per person. This is less than half the volume recorded in 2002.

This decline unfolded across twenty years and through numerous ownership transitions. No single acquisition caused it, and no court order blocking a future merger will reverse it. Hollywood has actively worsened its own situation by inflating production budgets to extraordinary levels while pursuing franchise tentpoles and abandoning the $20 million to $60 million mid-budget films that once formed the backbone of theatrical exhibition. In doing so, the industry conditioned audiences to view theaters exclusively as venues for “events.”

Now the industry is adopting the audience-segmentation strategies pioneered by airlines and hotels, extracting maximum revenue from dedicated fans while the majority remain home. Regal Cinemas exemplified this approach recently by charging $50 for opening-night seats to “Dune: Part Three.”

Studios Cannibalized Their Own Business Model

Between premium screen surcharges and escalating concession prices, a family of four can easily spend over $100 for a single evening at the cinema. It is hardly surprising that most Americans visit theaters only a couple of times per year; regular attendance would strain most household budgets.

Furthermore, the studios themselves compressed theatrical windows, rushing films to home viewing within weeks to fuel their streaming ambitions. This was not Netflix’s decision to force movies out of theaters. Warner, Disney, Paramount, and Universal all participated in cannibalizing their own box office revenue. They sacrificed theatrical income for streaming subscriptions before determining how to make streaming profitable. Poor business strategy, certainly, but not anti-consumer behavior.

Antitrust law exists to protect consumers, not industries. The attorneys general have it backward.

Consumer Choice Is Working as Intended

This distinction is crucial. Antitrust legislation was designed to safeguard consumers, not to prop up specific industries. The attorneys general have the situation reversed. Consumers observed how theaters and studios were operating and, in enormous numbers, chose to direct their spending toward streaming services. This is not a market failure requiring legal correction; it is the free market functioning precisely as designed.

Yes, the shrinking portion of the population that still purchases theater tickets might pay slightly more if these two studios merge, given their intensified focus on tentpole productions. However, antitrust law aims to facilitate consumer choice, not override it. And consumers are predominantly choosing to continue watching movies—just not in theaters.

This represents the fundamental issue at the heart of the current antitrust case. An injunction could halt the merger and maintain the number of major studios competing for an ever-diminishing audience, but it cannot compel anyone to purchase a ticket. The market has already spoken, and no court order will change how Americans prefer to experience cinema.