Theoretically, there isn't much of a reason to go to the movies anymore -- home theaters are becoming more affordable; the delay between the theatrical release and DVD/digital release is evaporating; and the availability of digital streaming and downloading services has vastly improved in recent years. (Not to mention, it's more expensive to go to the movies now, thanks to rising gas, ticket and popcorn prices.)
So a new study that suggests Hollywood may be vulnerable to a recession isn't entirely shocking.
"Surveying about 1,000 U.S. consumers, ages 18-54, Interpret found that 52 percent of respondents said they were seeing fewer movies at the multiplex, significantly more than the 35 percent of respondents who said they were attending fewer live sports events," according to a Wall Street Journal report about the survey, which was conducted by Interpret LLC.
What is surprising is that the industry isn't showing signs of a slowdown. In fact, this may shape up to be the second consecutive record-breaking summer at the box office. To some extent, inflation helps explain the phenomenon (rising prices drives up box office grosses), but that doesn't explain strong attendance numbers.
"We're seeing an increase in the box office [grosses this summer] and strong admissions. I think we may end up passing last year's admissions this summer -- we've got a real shot at doing that," says Patrick Corcoran, the director of media and research at the National Association of Theater Owners (NATO).
How does attendance grow if people are going to the movies less often? Perhaps they're not. Conventional wisdom is that movies are largely a recession-resistant business. Historical data backs this theory up, too -- in five out of seven recession years since 1965, box office grosses increased, according to Corcoran.
"Inflation was certainly part of that phenomenon, but ticket prices in 1977 were on average $2.23, which is about $8.03 today, when adjusted for inflation. The average price in the middle of [2008], though, was $7.12," says Corcoran. "So prices now are comparatively lower when you adjust for inflation."
And as for the threat of disruptive technologies, Corcoran thinks it's a bunch of malarkey. He points to the fact that when both the VCR and the DVD player went mainstream -- in the late 1970s and 1990s, respectively -- box office grosses actually experienced growth spurts.
"Admissions [went up] through the mid-80s, then hit a plateau after VHS was introduced," says Corcoran.
Similarly, he says admissions rocketed in 1998, after DVDs were introduced.
"Home entertainment and movie-going are complementary and help drive each others' business," he says.
Photo: Jessica @ Flickr
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