Americans just aren’t flocking to the movies like they used to. During the period from Memorial Day weekend through Labor Day of 2011, theaters were projected to have sold 543 million movie tickets, the smallest figure since the summer of 1997. Why are people skipping trips to the theater? All sorts of reasons, including the popularity of getting entertainment elsewhere from sources ranging from iPads to On-Demand, the damaging combo of higher-priced movie tickets and a struggling economy, and oh yeah, perhaps there just weren’t that many good movies—especially not ones worth $15 a pop.
On the one hand, the theaters and movie studios shouldn’t be too disappointed by movie ticket sales throughout the summer of 2011. During a tumultuous period for the economy, theaters did $4.38 billion in business, up nearly 1% from the previous summer.
But, as the New York Times reported, the rise in revenues came due to a rise in ticket prices, not because more people were going to the movies. In fact, theaters welcomed the fewest number of movie goers since the summer of 1997: 543 million, compared to 540 million 14 summers ago.
You might think that the studios and movie theaters would be upset by dwindling attendance. And to some extent, they are. But they’re not worried enough to do the obvious and lower movie prices in order to draw crowds back to the theaters. Instead, the approach has been to keep raising movie ticket prices, most easily accomplished via 3-D films that warrant a $5 premium per ticket sold. This summer, there were 18 movies released in 3-D, up from seven in 2010.
Did moviegoers actually want all of this 3-D? Judging by ticket sales as a whole from this past summer, and specifically for films like the latest “Pirates of the Caribbean, in which the majority of the audience chose to see the 2-D version, the answer is no—especially not for a so-so movie when an extra fiver is on the line. Given the state of the economy, and the fact that a full family’s evening’s entertainment can be had for $1 via a Redbox DVD rental, it’s hard to justify going out to see a mediocre movie, let alone one that costs an extra $5.
Thus far, however, the movie industry is doing its best to avoid discounting ticket prices, even in the age of Redbox, Netflix, Hulu, and Groupon. As the Los Angeles Times reported last week, the theaters are wary of any promotions that might devalue their product:
In theory, theaters stand to benefit from promotions if they bring in more customers who buy lots of popcorn, soda and other high-profit concessions. And with most promotions, theaters still get the full ticket price because third parties cover the cost of the discounts.
Even so, some exhibitors fear the heavy marketing of low-priced tickets through discount services such as Groupon, LivingSocial and DailyCandy will erode their business by encouraging moviegoers to wait for a bargain before trekking to the megaplex.
At some point, as the number of moviegoers keeps decreasing no matter how many 3-D films the studios put out—or perhaps because of how many 3-D films the studios put out—the powers that be will realize the business is eroding without any interference from the likes of LivingSocial and the new all-you-can watch membership service MoviePass.