As theaters gear up for the return of summer blockbuster season, the licensing industry is working to bring sales of theatrical- and streaming-related merchandise back to full force.

Sales of licensed merchandise tied to films has had to battle against theater closures and scheduling issues in recent years, leading to a focus on evergreen properties. And while there has been some recovery—the recent release of Illumination/Universal’s Super Mario Bros is reported to have been accompanied by strong sales of licensed goods, for example—the business hasn’t yet returned to pre-pandemic levels.

At the theatrical level, U.S. box office revenue is forecast to hit $8.5 billion this year, short of the $11.4 billion in 2019 but ahead of $7.4 billion in 2022, AMC Entertainment CFO Sean Goodman said in releasing earnings earlier this year. Part of the shortfall against 2019 is undoubtedly due to the emergence of streaming, as there’s now typically a 45-day exclusive windows between theatrical and streaming releases (down from 90 days) that has lessened consumers’ appetite for leaving their homes.

As a result, retailers—many of whom are already dealing with excess inventory that needs to be cleared—have been taking a more cautious approach to theatrical-related products and are more willing to chase merchandise tied to a surprise hit, licensing industry executives said.

“On high-profile releases, retailers will provide support, but on others like those with new IP that’s not proven yet, they prefer to chase it if it turns into something big rather than take an inventory position,” said Jeff Loeser, SVP of Licensing at poster supplier Trends International, which had a license for the new Super Mario Bros movie as well as for the upcoming The Little Mermaid (May 26) and Spider-Man: Across the Spider-Verse (June 2).

However, the number of new theatrical releases is once again on the rise. More than 30 films are expected to post U.S. box office revenue of more than $100 million this year, a 75% increase from a year ago, said AMC CEO Adam Aron. Overall, 449 films are expected to be released in theaters in 2023, which is on par with 2022 and down from 792 films in 2019, according to the research firm Statista.

The current marketing window for movies, which shrunk significantly in recent years, could pose a challenge for products being sold at retail as the number of movie releases continues to grow, according to licensing executives.

“We will not pursue a [product] based on a theatrical release because the shelf life is too ephemeral,” said Matt Kavet, President of drink and candy supplier Boston America, which has licenses for Nintendo properties. “Generally, pre-Covid, the selling window was three weeks before a movie was released and two weeks after, and beyond that it just died. And retailers aren’t making a huge statement with theatrical releases the way they used to.”

The shifting strategies of theater chains and streaming services must also be taken into account as brand owners, manufacturers, and retailers continue to adjust their rollout plans.

AMC Entertainment, for example, started selling ready-to-eat and microwaveable AMC Perfectly Popcorn through 2,600 Walmart stores in March. Cinemark is selling a $50 eGift Card through Costco, and continues to grow its Movie Club monthly subscription program. Cinemark has also been selling film-related merchandise in some theaters, CFO Melissa Thomas said.

On the streaming side, Amazon—led by the release of Air on 3,500 U.S. screens last week—plans to make 10 – 12 titles available annually in theaters. Rival Netflix, meanwhile, released the sequel film Glass Onion: A Knives Out Story for a week in 600 theaters last fall before offering it to subscribers a month later. Both services have licensing programs as well.

“I am still waiting to see streaming really sell product,” said Jay Foreman, CEO of toymaker Basic Fun. “The issue to me is when you dump the entire series in one shot, it comes and goes quickly. You need the traditional season-long build, and knowing a second year is coming—and preferably quickly. A few nice niche series like Stranger Things, Squid Game, and Wednesday [made a big splash] but it just hits hard and then disappears.”