Declining Audience Interest in Two-Part Films and Its Impact on Entertainment Sector Valuations

The entertainment industry is undergoing a seismic shift as consumer preferences evolve, reshaping the financial dynamics of content production and distribution. A critical trend emerging from recent data is the declining engagement with two-part films-a format once synonymous with blockbuster franchises-relative to single films and short-form content. This shift, driven by changing viewing habits and the rise of streaming platforms, has profound implications for studio valuations and investor strategies.

The Rise of Short-Form and the Decline of Long-Form Engagement

Audience engagement metrics reveal a clear preference for concise, high-impact content. According to a report by Nielsen, U.S. streaming viewership surged by 21% in 2023, with platforms increasingly relying on existing library content to retain subscribers. Meanwhile, Netflix's 2025 engagement report highlighted that short-form and live events, such as WWE, generated over 280 million view hours in the first half of the year, underscoring the appeal of bite-sized, event-driven programming.

Two-part films, which demand sustained attention over extended runtime, face an uphill battle in this environment. Data from HubSpot indicates that short-form videos under 60 seconds achieve completion rates of 60–70%, while longer formats see retention drop to 50% for videos over five minutes. This suggests that audiences are prioritizing immediacy and accessibility, traits that two-part narratives inherently lack.

Financial Performance: A Stark Contrast

While some two-part films, like Universal's Wicked: For Good, have achieved box office success-grossing $758.7 million globally-the broader financial landscape tells a different story. The U.S. movie and video production industry saw revenue decline at a compound annual growth rate (CAGR) of 15.2% through 2025, reaching $40.9 billion. Studios are increasingly adopting risk-averse strategies, favoring sequels and franchises over original long-form projects, a trend that dilutes the creative diversity once central to cinema.

Streaming platforms, meanwhile, have become the primary revenue drivers for films. By 2024, movies accounted for 48% of U.S. streaming revenue, nearly double their 2022 share. However, this growth is fueled by single films and short-form content, which align better with the on-demand, ad-supported models now dominating the market. For instance, Netflix's ad-supported tier accounted for 45% of total household viewing hours in 2025, reflecting a strategic pivot toward formats that cater to fragmented attention spans.

Valuation Implications for Studios and Streaming Giants

The devaluation of traditional long-form content is evident in studio financials. Warner Bros.' limited theatrical release of -showing in fewer than 50 U.S. cinemas-contrasts sharply with its robust marketing for Wuthering Heights, illustrating the diminishing returns of theatrical exclusivity. Similarly, the Hollywood Reporter notes that studios are prioritizing films with strong library value to reduce churn, a strategy that favors single films over multi-part series.

For investors, this signals a strategic inflection point. Studios clinging to two-part film models risk obsolescence as streaming platforms and content innovators capture market share. Companies leveraging AI-driven storytelling, interactive formats, or hybrid live-on-demand models-such as those integrating FAST (free ad-supported streaming television) channels-are better positioned to capitalize on evolving preferences.

Strategic Recommendations for Investors

The data underscores a clear imperative: rebalance exposure toward content innovators and away from traditional long-form producers. Key opportunities lie in platforms that:
1. Optimize for Short-Form and Live Content: Services like TikTok, YouTube Shorts, and emerging FAST channels are redefining engagement metrics.
2. Leverage Data-Driven Production: Studios using AI for script analysis and audience targeting can mitigate risks associated with declining two-part film viability.
3. Adopt Flexible Monetization Models: Ad-supported tiers and hybrid theatrical-streaming releases (e.g., PVOD) provide diversified revenue streams.

Conversely, investors should approach traditional studios with caution. The 3.8% decline in U.S. box office revenue in 2024 and the 41% of consumers who find streaming content "not worth the price" highlight systemic challenges.

Conclusion

The decline in audience interest for two-part films is not merely a format-specific issue but a symptom of deeper shifts in consumer behavior. As engagement metrics and financial performance increasingly favor short-form and adaptive content, the valuation gap between innovators and traditionalists will widen. For investors, the path forward lies in embracing platforms and studios that prioritize agility, technological integration, and audience-centric storytelling-while reevaluating long-term bets on legacy formats.