A post-pandemic reality is settling in for the movie industry: Streaming releases are here to stay and the theatrical window has permanently shrunk, even as blockbuster films try to reignite the box office.

Why it matters: Theaters have more to lose in Hollywood’s new status quo. The box office may have scored a few big hits this year, but it’s still down 45% compared to 2019.

Driving the news: Theater owners and studios gathered in Las Vegas last week at the annual CinemaCon festival to discuss the hot new titles and trends in movie-going for 2022. Some of the big takeaways:

• Windows are shrinking, but not dead: The pandemic-driven trend of debuting movies in theaters at the same time as streaming isn’t going away, but it’s slowing as the worst of the pandemic subsides. Universal Pictures said Monday it would debut three movies exclusively on Peacock, but it will still debut its’ biggest hits, including its upcoming “Jurassic World” sequel, in theaters.
• Piracy is a bigger problem: Theater executives pointed to piracy as a reason that studios and theaters are mutually incentivized to hold off debuting major films at home. “Simultaneous release is dead as a serious business model, and piracy is what killed it,” National Association of Theatre Owners CEO John Fithian said during the event.
• Theaters are expanding: Gone are the days where theater chains could rely on fancier popcorn and reclining seats to expand profits. Today, some chains are experimenting with lending their real estate to host special events, per IndieWire.
• Heroes still conquer: Hollywood’s most anticipated films this year are mostly sequels to major action and adventure franchises, including several new Marvel and DC movies, Paramount’s long delayed “Top Gun” sequel (which was screened for attendees) and the highly-anticipated “Avatar” sequel — the first of four from James Cameron — which was teased at the week-long event.

The big picture: Netflix’s brutal sell-off last month comes as Wall Street begins to reset expectations around streaming and profits, which is causing some in Hollywood to rethink their “all-in” streaming strategy.

• The strong performance of “Spider-Man: No Way Home” and “The Batman” has made the case that theaters are still the best way to land a global hit.
• Pandemic-era streaming gains allowed studios to experiment with shorter theatrical windows. But as their subscriber growth stalls, media giants are forced to be more disciplined about their releases.
• Warner Bros., for example, didn’t renew plans to release all of its films simultaneously at home and in theaters this year, as it did in 2021.

So far, that investment has paid off. Warner Bros. “The Batman” became the second pandemic-era film to cross $100 million in its domestic box office debut in March.

• But it also heralds the new way studios are thinking about the theater-streaming relationship: It was on HBO Max just 45 days after its March theatrical debut, a far quicker turnaround compared to pre-pandemic days.
• Disney’s upcoming film “Doctor Strange In the Multiverse of Madness,” is expected to crush the $100 million threshold in its debut this weekend.

Be smart: There’s still some signs of hope for theaters looking to land exclusive releases outside of big sequels.

• A24’s “Everything Everywhere All at Once” has been a boon for smaller-budget films and proof that that there’s still an appetite for movies that aren’t based on any preexisting franchises.

What to watch: Netflix is giving its upcoming movie “Bardo,” from Alejandro G. Iñárritu, a global theatrical release before its debut on the platform by the end of the year.

• While Netflix has backed theatrical debuts for some of its big name filmmakers like Martin Scorcese (“The Irishman”) and Alfonso Curon (“Roma”), the streamer raised eyebrows by giving that bit of information a full-throated announcement.
• That has given the theater industry some belief that Netflix may be open to putting more of their movies in theaters first.

What’s next: The Memorial Day weekend box office is typically a bellwether for the summer’s theatrical performance. This year, Paramount Pictures’ “Top Gun: Maverick” sequel and Disney’s “Bob’s Burger’s” movie debut are two of the top movies to watch.