New Mexico movie theaters brace for change as Netflix courts Warner Bros.

One of the most well-known jump scares in film history is in “Jaws,” which gave audiences new reasons to fear deep water when it opened in over 460 theaters across the U.S. in the summer of 1975.

Around 46 minutes into the film, shark-obsessed oceanographer Matt Hooper goes on a late-night dive to investigate a fisherman’s abandoned boat, only to find the angler’s pallid corpse jutting out of the ship’s hull with an empty eye socket, sending Hooper swimming for the surface as he screams bubbles.

The scene made such an impression on the big screen that it also sent 9-year-old Russell Allen racing back down the stairs of his family’s Farmington movie theater, which his great-grandfather opened in 1912, when the cost of a ticket was just 10 cents.

“That is the most defining, memorable experience I've ever had in the theater,” Allen said, laughing, “because I know I jumped 10 feet in the air and was down those stairs in a second.”

Today, as a 59-year-old generational owner of 17 Allen Theatres, 11 of which are in New Mexico, Allen still avoids the horror genre at all costs — a conviction so strong he says it could only have formed in one place: a movie theater.

“When you go to the movie theater, we make you shut your phones off, and you get to be immersed in the story,” he said. “You get to go to outer space. You get to go to a different country. You get to go to the bottom of the ocean. You get to live in someone else’s tragedy. … And that’s just an experience you can’t do at home — you can’t do it.”

That’s the case Allen said he would make to Netflix CEO Ted Sarandos, who late last month made an offer to acquire Warner Bros. Discovery for $72 billion. Film professionals throughout the country say the deal would create shockwaves for the industry, in what could be one of the largest media consolidations in years.

Warner Bros. on Wednesday recommended its shareholders reject a hostile alternative offer from Paramount, which proposed $30 per share in cash, favoring Netflix to absorb one of the remaining “Big Six” movie studios from Hollywood’s Golden Age.

Last week, movie theater trade group Cinema United took to Capitol Hill to oppose what it described as “a direct and irreversible negative impact on movie theaters.” The deal has already drawn scrutiny from the Justice Department.

For New Mexico, the acquisition could mean a boost in film production work.

Netflix built a major production hub in Albuquerque after acquiring ABQ Studios in 2018, and according to the New Mexico Film Office, its productions employ thousands of state residents and have brought more than $812 million in spending to the state since 2019.

Film Office Director Steve Graham said he’s optimistic about what the acquisition could mean for the state’s film industry.

The film office and its representatives across the state have built relationships with local cinemas over the years to premiere movies shot in the Land of Enchantment. A former film producer, Graham hopes theaters will continue to play an important role in the business.

“I’m like everyone else,” he said. “I love to lean back and put a film on at home and have that ease of viewing, but I also love to go out and have that communal experience. There’s something about sitting in a dark theater and dedicating yourself to that experience that you can’t get at home.”

In response to questions from the Journal, Adrian Zamora, a Netflix spokesperson, said the company believes its current business model has “minimal overlap with the existing Warner Bros. business.” Netflix, he said, sees the acquisition as a way to ramp up its “investment in original programming and production in the U.S.”

“Our intentions when we buy Warner Bros will be to continue to release Warner Bros. studio movies in theaters with the traditional windows,” CEO Sarandos said in a statement.

But many theater owners and film industry leaders remain skeptical of that promise.

For them, it seems unlikely that the company that pioneered streaming movies and TV shows from home would sustain the same level of production, and crucially, the traditional big-screen releases that cinemas have relied on to stay in business. Historically, Netflix has not embraced theatrical releases as traditional studios like Warner Bros. or Paramount have.

Allen said the central question is whether theaters have enough content to show each year.

“For just wide releases, we saw around 120 to 125 pictures pre-COVID,” he said. “Coming out of COVID, we came out with 75. And I think last year, 2025, we had around 105. Warner Bros. had the second-highest grossing, largest number of pictures that were released, so that’s a good portion of that 105.”

The rise of streaming services has driven a general decline in movie theater attendance over the past 20 years. Domestic box office revenues fell 80% in 2020, at the onset of the pandemic, and remain well below prepandemic levels. Last year, total box office revenues in the U.S. reached roughly $8.68 billion compared to $11.26 billion in 2019, according to The Numbers, which analyzes SEC filings from major theater owners.

To catch up, theaters have raised the price of admission by an average of 15% to 20% in the last five years.

The consolidation of major film companies could cause ticket prices to spike even further, according to Manuel Montoya, associate professor of economics at the University of New Mexico.

“Anything that tends toward a monopoly can lead to higher prices, lower quality of products and maybe even the homogenization of the product you’re getting, so you’re left with fewer choices,” he said.

Bill Banowsky, who founded the production company Magnolia Pictures in 2001 and owns the 11-screen Sky Cinemas in Santa Fe’s Railyard District, recalled that after Disney acquired 21st Century Fox in 2019, film “output went down significantly.”

Banowsky believes a Netflix-Warner Bros. deal would have a similar dampening effect on overall film production, but he says that would spell an evolution — not an end — to movie theaters.

“It just changes our approach,” he said. “Whether it’s Paramount or Netflix that acquires them, I expect the theatrical output from Warner Bros. will decrease, and we will adapt.”

For Banowsky and Allen, that has meant offering more than bigger screens, surround sound, ultra-high definition, popcorn and candy. Many movie theaters have been revamped to offer reclined seating, restaurant-quality food and beer and wine options to keep people coming back.

And many still do.

This month, Willie Perez took his children to an evening showing of “Zootopia 2” at Sky Cinemas. Perez said he likes the theater experience to get quality time with his kids outside the house. His 11-year-old son, Yakxel, said he’s always excited to see something new on the big screen.

Raelynn Dolcine had just come out of a showing of the British historical drama, “Hamnet.” After the credits rolled, she spent several minutes talking about the movie with a group of women she’d never met before. For her, going to the cinema is as much about the social experience as it is about one’s personal connection to a story.

“When you’re telling a story, it’s about the emotion, it’s about the feeling and going with the flow of wherever it’s taking you,” she said. “I think that’s why theaters are so fun. More than ever, people need to be connecting, even if we’re not agreeing about other things.”

Despite the uncertainty, movie theaters are still a source of investment and even public support in New Mexico, which boasts some 67 cinemas, according to Cinema Treasures. New Mexico Mainstreet has awarded thousands of dollars in public funding to maintain historic theaters throughout the state.

Meanwhile, new IMAX and EVX screens are set to debut as part of the EVO Entertainment cinema in development at San Isidro Plaza in Santa Fe, and Banowsky is renovating The Screen, an old arthouse cinema in Aspect Media Village.

The Allen family’s original Farmington theater was rebuilt in 1962 after a fire, but is now used for storage. Two newer Allen Theatres locations have since taken its place. The company took over a theater in Alamosa, Colorado, last year and has tentative plans to acquire theaters in both Arizona and Texas in the near future, Allen said.

Last week, he put on his “Jaws” 50th anniversary T-shirt before movie day, when he kicks back in a seat inside one of his theaters, the lights go down and he takes in an experience he says streaming simply can’t replace.

For those two hours each week, business has to wait.

“I’ve been tearing tickets since I was 11 years old,” he said. “It’s in my blood. It’s a fantastic business, and it’s a shame more people are not enjoying it. We just hope that Hollywood can make enough movies to get people back into the habit again because a lot of people have stopped, and they’ve missed a lot of good movies.”

John Miller is the Albuquerque Journal’s northern New Mexico correspondent. He can be reached at jmiller@abqjournal.com.