JOHN YANG: The Academy Awards are just around the corner.

And Hollywood's big night this year comes as what it means to watch a movie is changing.

Theater box office receipts have bounced back from the darkest days of the pandemic, but they're still below what they were before the fear of COVID Empty theaters.

And more people say they prefer seeing a movie for the first time at home on a streaming service than say they'd rather see it in a theater.

Matthew Belloni is host of The Town podcast, which looks at the inner workings of Hollywood.

Matthew, everyone talks about Box Office, theater business, getting back to pre-pandemic numbers, but has so much changed in viewing habits and technology, that the whole industry is just going to look different?

MATTHEW BELLONI, HOST, "THE TOWN": Absolutely, it already does look different.

And even when people say we are back, we're not really back.

The gross receipts for 2022 were down about 30%, 35% from 2019 pre-pandemic, and that coincided with about a 30% reduction in the number of the movies that went to theaters that year.

It's going to be a little bit better this year.

So the hope is at the Box Office will bounce back a little bit more.

But we are not in pre-pandemic levels.

And the question is, will we ever go back to that?

Because it's pretty clear that audience habits and preferences have changed and they want to watch more at home.

JOHN YANG: You say that movies going to theaters, has declined our movies being produced has that changed?

MATTHEW BELLONI: No, it's funny.

There have actually never been more original movies produced in a year than there are right now.

It's just that the majority of them are going to streaming.

If you look at what Netflix is doing, they're producing dozens of original movies every year, other streaming services are doing the same.

And then you have all the movies that go directly to theaters and then go through different windows on pay TV and streaming, put those all-together.

It's a pretty significant number of movies.

It's just that the entire business of Hollywood for almost 100 years has been based on the theatrical model where movies go to theaters first primarily, and then they hit all the different windows.

And that is changing.

JOHN YANG: Is there a type of movie that still draws people to theaters?

MATTHEW BELLONI: Well, what we've seen is that there are some obvious ones like the big budget intellectual property-driven movies like The Superhero movies, or a movie like Top Gun: Maverick or Avatar that are big budget spectacle type movies, and then there are genres like horror.

Horror still can draw an opening weekend audience, action movies, for certain types of stars, they can draw movie goers, but other genres like adult dramas, romantic comedies, comedies in general.

Those movies have really struggled in theaters and increasingly, they are going direct to streaming.

JOHN YANG: Steven Spielberg has said that after the disappointing performance of his movie, The Fablemans that he worries about the audience for adult dramas as they're just shifting to streaming away from the theaters?

MATTHEW BELLONI: Yes, Spielberg is a big proponent of the theatrical experience.

And in fact, he had a meet up with Tom Cruise at an event a couple of weeks ago where he basically told Cruise you save the theatrical business by getting adults and general movie goers to come back for Top Gun: Maverick.

But Spielberg sees the writing on the wall and it's evident in the Oscars this year.

His movie which is a Steven Spielberg movie, it's an adult drama did not perform at the Box Office.

And one after another this fall, the movies that you want to see do well in theaters in the run up to the Oscars before they're nominated movies that are best picture contenders like women talking or, you know, even something that in prior years like The Banshees of Inisherin, which would have been a slow burn Oscar movie that became a hit.

Those movies are not catching on in theaters because people are saying to themselves, I can just wait a little bit.

It'll be on my streaming service.

I've got a giant TV in my living room.

It's OK.

I don't need to go out.

That is where the industry is really having problems.

JOHN YANG: Theater owners are talking about trying to compete with streaming.

AMC is going to tiered pricing different prices for different seats in different areas, are they going to be able to compete or are they just missing the point that habits have changed?

MATTHEW BELLONI: You know, the theaters are in a really tough spot right now.

If this 30% decline in business is a permanent thing, the theaters are going to have to downsize close theaters, perhaps some will go out of business entirely, the second largest cinema chain has already declared bankruptcy.

AMC the largest, has tried to do this dynamic pricing with different seats cost different amounts of money, that's probably a good idea.

They should try to do dynamic pricing where certain movies may cost more than others, certain places and times may cost more than others.

But that is a temporary or a kind of cosmetic solve for the more fundamental problem they have, which is that they have to innovate and improve the quality of the theater going experience to make it more of an event where they can then charge more and people will be willing to pay because for movies that people deem worthy of the theaters, they're willing to pay more for the experience.

And they're willing to pay more for these premium events like IMAX or the Premium Format, or extra sound or reclining seat, these things that give added value to people they are willing to pay for.

But the old days of just hacking the multiplex in the mall.

I think are number.

JOHN YANG: Have all these changes affected the studios?

MATTHEW BELLONI: The studios are positioned a little bit better here because they make more money when they put these movies on premium video on demand where you pay a fee to watch it at home.

They are increasingly doing that at earlier times for these movies that used to just go in theaters.

But the studios are also trying to figure this out.

It's sort of chaotic right now in the movie business.

Nobody knows what the right formula is between theaters, streaming for free, streaming for an upcharge, putting it out at the same time as it's in theaters.

There's all these different strategies you can take.

And nobody quite knows what the magic formula is.

JOHN YANG: Matthew Belloni of The Town podcast, thank you very much.

MATTHEW BELLONI: Thank you.