Last year was a bad one for the movie business, with the fewest tickets sold since 1995 and revenues that dropped 4.5% from the previous year. Analysts foresee a better year ahead in 2012, and what is it that’s expected to turn things around? Yep, higher ticket prices.
The Hollywood Reporter cites the forecasts for several analysts, all of whom predict an increase in revenues compared to 2011. This doesn’t necessarily mean that more people will be going to the movies more often. Instead, two of the analysts say box-office gains will occur almost exclusively by theaters charging more for admission.
Eric Handler, an analyst with MKM Partners, wrote that things are looking good for 2012, and here’s why:
“We remain somewhat optimistic toward the 2012 box office and forecast 3 percent growth for the year, driven entirely by pricing.”
In terms of movie attendance, the most optimistic of the analysts quoted looked for a whopping 1% increase in the number of tickets sold. Nonetheless, the analysts say that revenues in 2012 will surpass that of 2011 because the cost of tickets will rise by 2% or 3%. By the end of 2012, the average movie ticket will likely sell for around $8.15. It wasn’t all that long ago, mind you, that the average ticket crossed the $8 mark for the first time.
What about the movies themselves? Will they be, um, any good? The analysts expect many, many blockbusters, mainly via films with topics that have been big hits in the past, such as The Hobbit and the latest Batman, Spider-Man, and Twilight movies.
Then again, maybe the movies won’t draw crowds any bigger than in 2011. A Barclays Capital analyst admits:
“While there are plenty of movies that we are excited about in 2012, we admit that we felt similarly about the 2011 film slate this time last year.”
To hedge the strong possibility that 2012 crowds won’t be buying tickets in greater quantities than last year, theaters plan on simply raising ticket prices, yet again. Such a move will surely be as big a hit with movie goers as the relentless onslaught of mediocre (and more expensive) 3-D movies.
The Atlantic’s Richard Lawson put it well when exploring the dubious strategy of raising prices as a solution for decreasing movie attendance:
If there’s one thing that Americans have been saying as theater attendance lags over the past ten years it’s that tickets just aren’t expensive enough. Why are we, here in New York at least, shelling out a measly $13 for a ticket when we could be paying $20? Or $30?
That’s a joke, I’m pretty sure. So all you movie studios and theaters out there, don’t get any bright ideas.