Sometimes it is painfully apparent that a relationship has gone woefully awry and the only resolution is a parting of the ways. This parting while initially painful can lead to vast personal growth and a re-acquaintance with oneself.
Every once and awhile I get email as a result of an article I write. Last week a drive-in operator who also operated a single screen reached out with a concern regarding the studios requiring him to hold a picture for 4 weeks. Well anyone who has some exposure to the smaller theatrical markets are aware that at a single screen small town theatre the most a blockbuster can be held for is ten days. Requiring small market, non multiplex theatres to do this is just plain wrong. To force this kind of restriction in a business relationship is blatantly one sided and indicates a deep lack of concern for your business partner.
This policy is one of a series of decisions and strategies put into place by Hollywood that is are increasingly eroding the motion picture exhibition industry. Now the wonderful folks at the MPAA will herald the fact that in 21015, the domestic box office was $11.1 billion and tell everyone that the movie business is vital, but the problem is that increase in box office is primarily a rise in ticket prices and those dollars are being shared by fewer and fewer mega budget pictures.
Movies in their heyday saw 45 million weekly visits in 1965 to the local movie theatre which plummeted to 19 million in 1969. In 2016 10 million people on average visited the theatre. A dangerous trend, is that the increasing loss of the millennial generation is making the future become even darker for movie theatres.
This rapid drop in millennial movie attendance is more than troubling. The number of ticket buyers ages 12 to 17 fell to 5.3 million in 2015, down from 5.5 million in each of the two previous years. That figure is also down from 6.3 million in 2012, according to numbers from the Motion Picture Association of America. There was an even bigger drop-off among moviegoers ages 18 to 24 years. Over the past three years, that group fell by more than one-third, to 5.7 million last year, down from 8.7 million in 2102. At one time the demographic 18 to 24 provided the core of the summer box office revenue. This is not the case now.
In 1980, Hollywood spent less than 20 cents on advertising for every $1 it earned at the box office. Now it spends on average 60 cents to get that buck. In a market where it costs $60 million just to earn $100 million, movie makers are spending an enormous amount of money on fewer blockbusters and advertising the heck out of them. For Hollywood the theatres are becoming an increasingly difficult market to service.
At one time going out to the movies once was, and for many still is a preferred form of entertainment. Every year roughly two-thirds (68%) of U.S. adults went to the movies at least once but in polling revealed that just about the same percent (66%) say they’re going to the movies less often now than a few years ago. When asked whether they prefer watching movies at home or in a theater, or no preference, the majority say they prefer watching at home (57% total), while only two in ten (21%) prefer watching in a theater.
Now what is fascinating in that in Europe, they are seeing real growth in theatrical admission. This year they sold 8% more tickets that in the previous year. Many of the analysts feel that the reason for the growth is the abandoning of Hollywood created films and the embracing of more locally created productions.
In China, a shining beacon of hope for the Hollywood studios last year saw a deep box office growth decline this year. Until 2016, growth at the Chinese box office had averaged more than 30% annually for several years and in 2015 receipts increased by 48.7% compared to the previous year. The 2016 results make it unlikely that China will overtake the North American box office any time soon with a paltry 8% growth.
I know by now you’re going…this guy is a real downer. Well unless things change and change soon Hollywood is going to drag down the theatrical exhibition industry by its draconian business practices, bloated and decreasingly appealing movies and a seemingly oblivious take of the state of the market into a market place where there will be no recovery.
But wait, I believe in the theatrical exhibition of movies and believe in it deeply but know from analysis of what is working in overseas markets and what millennials are looking for that with some slight adjustments, the movie theatre can rise out of the quicksand Hollywood has placed it in.
With VPF’s coming to end, there exists a brief window for theatres to break free and define their own future. I am going to suggest the following course of action in order to increase box office and break off the dependency from Hollywood drive-in product.
Here are some ideas;
1. Place attractors like video gaming tournaments and YouTube film festivals to bring millennials back to the theatre.
2. Begin a more aggressive rotation of classic movie releases and newer releases
3. Bring in more local productions and look at booking more independent movies
4. Program more multi-cultural movies, Indians and Chinese are movie going fools….become a center of a cultural experience for diversity
5. Lower concession prices, I always stuck to a pricing model which all items were $5 or less. This builds customers and will eventually greatly increase your concession revenue.
6. Partner with local businesses to sponsor screenings
7. Publish a schedule of releases and distribute them locally
With the funny business of exhibition windows and looking seriously at enabling day and date…we just have to accept the fact that Hollywood has fallen out of love with the movie theatre. Leaving a bad relationship is always tough, leaving what you know is always hard. But after a year or two of being truly independent you just might have found that both you and your audiences may fall in love with going to the movies again.
Here is hoping.
