NATO: Fewer People Went to Theaters in 2019

We’ve already seen that box office revenue was down in 2019 by a noteworthy 3.9 percent. That news in and of itself was bad enough given how up and down the last few years have been, with the fate of the industry riding largely on how much it can pull from a handful of blockbuster franchise releases.

Last week another wave of bad news hit when the National Association of Theater Owners revealed attendance – the actual number of tickets sold – fell 4.6 percent in 2019 from 2018 levels. The only reason, then, that the revenue drop wasn’t as big was that the average price of a ticket (including premium formats) was up to $9.37 at the end of the year.

While movie-going is still an enormously popular activity, the trend continues that it seems to be increasingly one available primarily to the well-off.

As Erik Hayden at THR points out, that average movie ticket price is higher than the monthly subscription rates for Netflix, Hulu, Disney+ and other streaming services. And right now 39 percent of respondents to a recent survey are paying for three or more such services (including music) at a time.

For the consumer, then, it comes down to value. $9.37 can buy one movie ticket, but it comes with the obligation to make the necessary arrangements to leave the house. And how often are people going to the theater themselves, and what other activities are they adding on to that trip? Even a solo trip will likely end up costing significantly more than that.

Compare that to the $7-10 a streaming subscription cost, which comes with far fewer additional burdens. While each service has its own library of material, the options available on any one of them are substantive enough to keep most people occupied for hours if not days. And the perceived risk involved is much lower, as blowing $9 on a single movie that winds up being a dud is a huge disappointment while the couple hours you invest in a movie on Netflix is fine since you can check your email as you finish it with few regrets.

What Does the Audience Want to See?

At some point the theatrical exhibition chains are going to have to figure out how to live in a world that includes both their business and that of the streaming producers, who continue to bank on the idea that original features and series are the key to success. The stocks of AMC Theaters, IMAX and others took a hit at the end of last year because of big-budget bombs like Cats and even the perceived disappointing results of Star Wars: The Rise of Skywalker.

But those are the movies they booked, influenced in part by the studios who put on persuasive presentations at CinemaCon and assurances that people will come see known properties. Meanwhile, they keep shunning anything that comes from Netflix, even if it’s from high-profile filmmakers and comes with massive buzz attached. Netflix may have far fewer titles than it did a few years ago, but it has proven a serious player in the awards game and that’s come with the subsequent industry attention.

So, then, how interested in the future of movies are the theater chains? And what do they see their role being? Their core business model, after all, means they are at the whims of studios that make questionable decisions for a number of reasons without substantive input on those decisions.

If people are willing to pay $25-30/month combined for a two or three streaming subscriptions but continue to signal they are balking at the $9+ for a movie ticket, there’s no clear path for theaters to adjust their business models other than to keep jacking prices up, getting more out of a shrinking pool.

That seems unsustainable in the long term, but perhaps those in charge are just hoping to get through the next quarter unscathed and then leave it for the next person to figure out. The choices being made now, though, will have serious repercussions for everyone, especially the audience.

IMAX Using M:I – Fallout, Avengers to Kick Things Up a Notch

If you were tired of not seeing Marvel Cinematic Universe movies on the big big screen, you’re in luck. Last week Marvel Studios and IMAX announced all 18 of the titles from the first 10 years of the MCU would be part of a massive marathon, including Iron Man, The Incredible Hulk and Captain America: The First Avenger, which have never been shown in that format to date.

The announcement is just the latest in a series of moves by IMAX to become a dominant force in the theatrical industry by tying its brand closely to some of the biggest, highest-profile event releases Hollywood has to offer.

Already this summer releases like Mission: Impossible – Fallout, Jurassic World: Fallen Kingdom, Ant-Man and The Wasp, Skyscraper and others have been released in the large-screen format. Not only that, but the campaign for each one has included videos featuring the cast and crew talking about how IMAX is the optimal way to experience the movie, showing more of the picture and making the action bigger than life. Exclusive TV spots are regularly created, special posters distributed promoting screenings and more.

Not only does IMAX want you to see movies in IMAX, but theaters as a whole do too. Tickets for IMAX screenings regularly run $5 or more above the standard price. One of the key differentiating value propositions of AMC Theaters’ recently-launched Stubs A-List subscription ticket plan was that it included IMAX and other premium formats while MoviePass was limiting such availability as it sought to reign in costs.

Theaters see IMAX and other premium formats as an important tool two ongoing efforts: 1) The competition with home viewing, particularly with streaming services that are offering their own original films and other programming, and 2) The continued expansion into overseas markets, where higher-quality presentations of big-budget action films are much sought-after.

On the first front, as the theatrical industry goes, so goes IMAX. Ticket sales in 2017 – actual stubs torn or scanned – were down to their lowest levels since 1992 as an overall weak slate didn’t grab people’s attention in a way that convinced them to head to the theater. Those have rebounded this year thanks to Black Panther and Avengers: Infinity War, but it remains to be seen how the rest of the year will play out with a fairly weak slate that doesn’t feature a ton of big “event” movies that will have something special to offer those seeking big-screen experiences.

On the second, IMAX continues to grow. Revenues were up in 17% in the fourth quarter of 2017 from the same period in 2016 and ended last year with 1,370 screens, many of them in China and other growing markets.

In July IMAX launched its first brand awareness campaign, meant to make a very specific appeal to audiences that it was the best way to see the kinds of big, special effects-laden movies Hollywood was anxious to keep feeding them. Really, though, that’s just a small part of a campaign that’s been underway and which has included special messages from Paul Rudd, Tom Cruise and other stars, behind-the-scenes featurettes on movies like The Incredibles 2, fun little videos for Solo: A Star Wars Story and much more.

Those efforts likely come from a realization that a generic “IMAX is cool” message isn’t going to have nearly the impact on the audience as one that’s tied more closely to a specific highly-anticipated film. The audience has likely already decided to see that movie, so it falls to those exclusive featurettes, TV spots and posters to get them to simply alter their thinking and choose IMAX over a standard screening.

IMAX has been increasing its footprint in the theatrical industry for the better part of a decade now, seeming to emerge as the winner in terms of premium formats over 3D, which was seen as the savior of the market 10 years ago but which now doesn’t get nearly the buzz. So it will hitch its wagon to movies like the Avengers and other franchises, realizing that it will share in the fortunes of the theatrical market as long as they last.

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