Magazine article Variety

Exhibitors Should Open a Window to New Possibilities

Magazine article Variety

Exhibitors Should Open a Window to New Possibilities

Article excerpt

Although 2015 was a record box office year, exhibitor stocks closed well below where they started. Attendance was the third lowest since 1995, having peaked in 2002. Consolidation around fewer titles - with 20 movies that made $150 million-plus driving 53% of the business vs. 33% in 2002 - meant that attendance at smaller films was down by as much as 30%. And 13 studio wide-release films opened to less than $6 million. There is clearly a problem for non-tentpole moviegoing that extends beyond the generally touted needs for higher-quality pictures or better decision-making about when to release them.

Actually, the movie consumer is well along in the process of substituting at-home viewing for theatergoing, powered by on-demand convenience delivered by Netflix, time-shifted TV viewing through DVRs, and broadband-enabled piracy. Combined with the cost of a theater visit that has climbed to $28 (two tickets plus concessions) from $18 in 2003, even as in-home costs for two hours of on-demand entertainment plummet toward free, it begins to feel like a perfect storm for the non-tentpole release.

It certainly isn't a supply problem. The major studios continue to make and release mid-budget movies, and new-entrants like STX are stepping into the market. In fact, total theatrical releases have risen to 690 in 2015 from 479 in 2002. But it's exhibitors with the most to lose from downturns in attendance, due to lost concessions, the higher cost of film rentals for tentpoles, and the slide in cultural relevance as moviegoing becomes ever less frequent.

Declining attendance will only be addressed by finding a way to reach audiences more effectively and tackling the price imbalance of going to the theater vs. staying home.

There are two clear levers that exhibitors could bring to bear. Direct marketing via consumer loyalty programs could improve the opening prospects for all films, but to date, that strategy has been focused primarily on tentpoles, with little credit earned by exhibitors for their efforts. Why couldn't exhibition support smaller pictures, and do so for compensation from film distributors? And to address the growing home/theater price imbalance, coupling loyalty programs with expanded discount and subscription offers to consumers also would help attract audiences to smaller movies. …

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