The Box Office Isn’t Dead (yet)

31 12 2015

A recent report on Barron’s (link here) describes the mild resurgence of box office revenues, courtesy of Star Wars: The Force Awakens. The problem here is that this isn’t necessarily a trend, and may not appear again, ever. The need to see a movie in a theatre just isn’t as compelling as in the past.

What’s Changed?

People don’t go to the movies the same way they did in the past. Part of it is driven by the expense (a family of 4 can easily spend $100 or more, with tickets and snacks). Part of it is because of home theatre technology.

In the past, movies stayed in theatres longer, and multiple viewings by theatre-goers was normal. Even during the days of the VCR, you would often see a movie in the theatre multiple times. It was the only way to get the clear, crisp, bright, vibrant picture and the amazing sound. And you could go multiple times over, say, the course of the summer, because a movie would stick around for months (or even a year or more).

But with large, high-resolution flatscreen TV’s, 7-speaker sound systems, Blu-ray discs or 1080p digital formats (and 4k slowly appearing more and more), the compulsion to see a movie on the big screen is reduced. For the price of 4 people, you can buy 4 copies of the Blu-ray at top prices (or, more likely 5 copies on disk with a digital download code because movies are usually about $20 on release day, or have 10 months of streaming with Netflix).

Star Wars An Anomaly

Episode VII of Star Wars is an outlier. It harkens back to they day when we watched movies multiple times. But, given the relatively short theatrical runs, people are cramming in multiple viewings in advance of the streaming and home release that you know is coming (April 5 is being predicted by blu-ray.com. You can already pre-order it on iTunes). That hasn’t happened for a long time.

I would be surprised if we get the same response for Episode VIII. Part of the reaction for the latest instalment can likely be attributed to pent-up demand: it’s been a while since we’ve had a Star Wars movie in theatres, and some people were looking for redemption from the prequels (which, frankly, I don’t think are all that bad). It all adds up to a perfect storm for this particular release.

The next instalment arrives in May 2017, barely a year after Episode VII. While I expect a positive response, and it may still break records, I have a feeling it won’t. It isn’t because I think it will be a bad movie, or will be a lesser movie that the most recent one. It’s more because there will likely be more “one-and-done” viewing, much like we do with most other movies today.

Box Office Decline?

The nature of movie watching is changing. The need, or even the desire, to go to a movie theatre isn’t as strong as in the past. Technology in our homes has been the biggest driver. With 4K TV’s continuing to come down in price, and more content being made available in 4K, the big screen isn’t as important. This, coupled with inexpensive streaming services and earlier release dates for streaming, digital download and Blu-ray/DVD, there isn’t the “I have to see it now” drive that was felt in the past.

The theatres aren’t helping themselves, either, but they are caught in a bind. Going to the movies needs to be special. That means more leg-room, more comfortable seating, a better selection of quality food and an overall special experience. Some theatres have done this. But some older theatres still haven’t caught on. But to renovate costs money, and that means they need revenue to pay to update the customer experience. But if they don’t, they risk a decline in revenue as fewer people go. The decline will be offset by raising prices, but there is only so much room to increase ticket prices.

A Changing Experience

It is entirely possible that the movie experience changes such that we only go for “special releases”, and a new movie in a theatre becomes an event, not just one link in the movie release chain. I suspect more and more top mainstream films will simply go straight to digital/streaming/disc. Only “big” movies will appear in theatres, alongside independent and experimental movies. Expect more and more re-screenings of old movies to capture the nostalgia.

The business of the movie theatre is changing (much like live theatre changed with the advent of motion pictures in the 1920’s). Those that find a way to capture audience attention will survive, but they will be different from what we know today. Expect fewer theatres, and those that remain to be a step up from what we see today.

A movie used to be a pleasant way to spend a couple of hours, on an almost weekly basis. Now, for some it is more of a “once a month” thing. For many, it is “once or twice a year”. Going to a movie in a theatre is becoming more and more infrequent. As the technology in the home continues to evolve, I would expect this trend to continue.

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31 12 2015
Movie Theatres and History Repeating Itself | Thoughts and Muses

[…] I published some thoughts on why box office revenues have seen a recent surge (and why it won’t like continue on that trajectory. What we appear to be seeing is history […]




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