Movie Ticket Prices Impact Moviegoing (Duh)

A new study highlights a problem I’ve suspected is brewing in the movie industry for a while now: That rising ticket prices are acting as a deterrent to more frequent moviegoing.

The study found that 53% of respondents identify ticket prices as the reason they don’t go to the movies either at all or at least more frequently. Women are more likely to cite price as the reason they’re skipping the theater than men, with the reasons for that slight disparity likely because of much deeper cultural realities than just price. Younger people are less deterred by price than those over 35, which makes sense given that’s really when the term “disposable income” almost completely disappears from most people’s vocabulary because of kids, home ownership and other financial realities.

That report came at just about the same time the National Association of Theater Owners released the news that the average nationwide ticket price rose in the first quarter of 2018 to $9.16, the first time it’s broken the $9 mark and well above the 2017 yearly average of $8.97. And shortly after that, Box Office Mojo reported that actual theatrical attendance – the number of tickets sold – was up 3%+ from last year to its highest level in over a decade, thanks largely to Black Panther and Avengers: Infinity War.

Along those same lines, a 2016 report stated just 20% of movie tickets were bought online. Most of those were for blockbuster releases because they’re the kind of movies people want to reserve seats for in advance due to fears preferred showings will sell out. Put more succinctly, people want to lock in that 7:30 Black Panther ahead of time because they know tickets won’t be available at the box-office.

Interestingly, neither the National Association of Theater Owners nor the Motion Picture Association of America break out online ticket sales in the trends reports they provide. So it’s difficult to tell if that 20% number has grown at all in the intervening two years.

So let’s put all that together: More people (slightly) have gone to the theater, largely because of big releases very much in-line with Hollywood’s current “nothing but franchises and shared universes” strategy. At the same time, ticket prices are rising while more people call out the expense as a reason they don’t go to the movies.

It’s not hard to see that such a situation is far from sustainable.

Those gargantuan blockbusters aren’t going to keep working to bring in more people. Indeed, this year is kind of an outlier since we haven’t seen other massive releases provide similar boosts to overall attendance. That’s a credit to the marketing done by Disney for those two Marvel Studios releases. It’s unlikely they or anyone else will be able to capture lightning in a bottle twice. If anything, I would expect that the rest of the year will keep dropping, especially after we get past June to the point where “flat with 2017’s historic lows” is a best case scenario.

Also, all of that growth is coming from one studio, Disney. That’s the same studio that is about to launch its own OTT subscription service and will in all likelihood start diverting at least some of its most commercially-viable films there in an effort to gain audience traction. It won’t abandon the theatrical distribution model entirely, but there are already rumors some films on its schedule have been delayed as the studio considers an OTT release.

Finally, the Box Office Mojo doesn’t report how much of that increased attendance was the result of the spike in subscribers to MoviePass. For a while in 2018 the service was seeing serious month-over-month growth while it still offered its one-movie/one-day model and before it started changing the terms of membership every other week. While I don’t see that being a huge factor it would be naive to think it’s not contributing to that at all. In fact, MoviePass subscribers recently said they saw more movies than they otherwise would have because the relative cost of doing so was effectively nill.

So…If the desirability of the movies drops in the eyes of the audience, the price of a ticket keeps rising and there’s no “sure, why not” factor like there has been with MoviePass…that’s not good news for the theatrical exhibition industry.

As I’ve said before, rising ticket prices combined with many less affluent areas no longer having a neighborhood theater because the last one closed when it couldn’t afford the transition to digital means a huge chunk of the public is no longer even considering “let’s go to the movies” as a viable entertainment alternative. Subscription streaming, illegal downloading, video games…those are all more attractive and cost-efficient options.

Even take it outside of that and look at broader economic trends. The increase in average ticket prices (which are nowhere near what you’d pay in many areas of the country) was only 2% from 2017 to now. But overall wages haven’t increased substantially for a decade or more. So that $.19 is a somewhat bigger chunk of the paycheck than it was a year ago.

All of the above continue to indicate a trendline where moviegoing becomes the pasttime not of the common folk but of the well off. Look at Google’s recent unveiling of ticket-ordering through its Alexa home device. Smart speakers and voice assistants like Alexa are seen as contributing strongly to the continued growth of e- and m-commerce, but those devices aren’t going to be found commonly in poorer homes, especially not among the growing U.S. Hispanic population, whose members are much more likely to own a cellphone than any other internet-enabled device.

Rising prices coupled with stagnant wages is a bad news combination in any industry. Given how other shifts in the media industry are prioritizing owned brand platforms as opposed to third-party distribution, it’s only likely prices will continue increasing as exhibitors attempt to squeeze the remaining audience for as much revenue as possible before the entire bottom falls out. Either that or the industry adopts the airline mindset and begins charging for additional “conveniences” and perks like early seating wider aisles.

Chris Thilk is a freelance writer and content strategist who lives in the Chicago suburbs.

Author: Chris Thilk

Chris Thilk is a freelance writer and content strategist with over 15 years of experience in online strategy and content marketing. He lives in the Chicago suburbs.

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