Movies, Not the Theaters

Movie theaters are fast losing their long-time appeal to digital, at-home movie options

Television and Internet have become as much a part of daily life today, as eating and sleeping. As American photographer, Robert Adams, said, “Television probably has become the most evocative, widely observed signpost we have.”

Movies and movie-making are essential components of American culture. Hollywood, the birthplace of the motion picture industry is an icon of life in California. Going to the movies has been one of the most entertaining of leisure-time activities in the US, ever since the first theater opened in Richmond, Indiana, in June 1894.

Americans love the cinema and the romance, fantasy and glamor of the picture show world. The year 2002 showed the largest number of tickets sold in the US. Yet, over the past few years, the movie experience in the US has undergone unimaginable change. Movie-making studios and theater chains have been ceaselessly trying different strategies to lure people to the movies, but they have relentless competition from streaming and On-Demand Video Services, as well as at-home options like 123movies. While having more choices in their libraries, these entertainment corporations are launching their own original shows and movie classics.

These substitutes for visiting the movie theaters, are the outcome of progressively sophisticated options of an age of technology, and have gradually led to reduced theater attendance over the years. American singer/songwriter, Becky G, said, “If I can, I love staying in pajamas all day and watching movies and eating good food.” People have got used to being able to watch what they want, when they want, on whatever digital option they want, in the cozy comfort of their own homes. The lure of digital devices appears to be more potent than the call of the movie theater.

Apart from the distraction of such convenient options, going to a movie has become uncomfortably expensive. With fierce price competition among theaters, they are reluctant to increase prices. In any case, 70% of any increase goes to the movie studios. So, it makes more sense to increase prices, even up to 700% of cost, of essential accompaniments like tubs of popcorn and other snacks. A family evening out at the movies is no longer a cheap option.

Yet, despite the anticipation of the inevitable, the record low theater attendance of 2014 was a shock to the industry. The digital and print magazine focused on Hollywood, The Hollywood Reporter recorded that the number of moviegoers in the US hit a 20-year low during 2014, at 1.26 billion.

The fall in popularity of movie theaters appears to be generational. Global market research leader, Nielsen, records that American teenagers and young adults (12-24 years), reduced watching movies in theaters by 15% in 2014, in comparison with 2013. Furthermore, as the Motion Picture Association of America records, during 2013, the number of frequent move-goers aged 18 to 24, fell by 17%.Brooks Barnes of The New York Times observed, “(In the past) young ticket buyers traditionally turned out weekend after weekend – with the quality of the films mattering less than the opportunity to fraternize. But this group is staying home more often.”

Eric Wold, an analyst at the research organization, B. Riley & Co., said, “A lot of the problem has to do with the unknown factor of consumer behavior. Will the consumer want to see a movie opening weekend regardless of knowing it’s only coming out on-demand a few weeks later?

Studios and multiplexes invest millions of dollars on research to arrive at the price and timeframe after a movie’s release, that moviegoers begin to choose watching it at home as against watching it in the theater. In an age where consumer taste is changing so rapidly, filmmakers are frantically trying to keep making movies that will be relevant for consumers, taking into account the time lag needed to develop and produce a movie. Movie-making involves huge investment and the ability to take risks.CEO of film production company, FilmNation, Glen Basner, said, “The big question you lose sleep over every night is, with everything that can change in 12 to 18 months, is a great story with great characters unique enough to still attract an audience?”

Meanwhile, six of Hollywood’s seven biggest movie-making studios are pushing to offer at-home movies, just weeks after movies are released, at a $30 rental – a price that would not shock consumers. The earlier wait-time to release movies for rental, was at least 90 days. Again, it is a question of pandering to the mercurial wants of current movie-watching public. Young people, especially, are not used to waiting months to watch something they desire. So, studios are scrambling to adapt, trying to make their money in different ways.

One of the founding pioneers of the New Hollywood Era, Steven Spielberg, back in 2013, predicted the current fate of movie theaters. At a panel discussion at the University of Southern California, he said, “What you’re going to end up with is fewer theaters. Bigger theaters, with a lot of nice things. Going to the movies is going to cost you 50 bucks, maybe 100. Maybe 150. And that’s going to be what we call ‘the movie business.'”

As American political commentator, Matt Drudge, said, “Television saved the movies. The Internet is going to save the news business.”

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