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.