Media research firm OTX (Online Testing eXchange) released an interesting study about the decline in theatrical attendance this year. During Summer 2005, ticket revenues fell to $3.62 billion, their lowest
level since 2001, while the number of tickets sold — 541
million (est) — was the lowest level since 1997, according to box office
tracker Exhibitor Relations.
Drawing conclusions similar to our prior discussions (Why is Movie Theatre
Revenue Attendance Declining?), OTX cites 3 major factors in the decline of the theatrical movie-going audience:
-Rising overall costs of going to movies;
-The improving home media experience;
-On-demand digital entertainment options.
While the quality of the films are not a key issue, quality combined with price is: "Consumer attitudes about the quality of theatrical movies did not change. Most believed that the quality of movies remains relatively good. But the most commonly agreed to statement among consumers was that "with the price of tickets being so high, I’m more selective about which movies I see (in the
theater) than I used to be."
OTX’s study noted this perspective — costs and the increasing competition from in-home entertainment — was most prevalent within "the most prized movie going audience — males 13 to 24 years of age." This past summer, "male moviegoers between the ages of 13 and 24 reported seeing on average about 24 percent fewer films than they did in 2003."
Why? Here are the prime factors:
— Lack of appealing, targeted content: In 2003, 60 percent of males under 25 said "there was an excellent selection of films to choose from." That number dropped to 35 percent in 2005. (That’s a huge fall off, and points to the Long Tail alternative)
— DVD consumption: In 2003 this group reported watching an average of 30 films on DVD/VHS. That number soared to 47 in 2005. (Greater than 50% increase — definitely Long Tail)
— Videogames and the Internet: This demographic also shows a rising interest in home-based entertainment options: 62 percent now regularly surf the web, 53 percent Instant Message with friends, and 53 percent are now playing console video games (Playstation, Xbox, Gamecube, etc.).
OTX: "The perception among young male moviegoers that there wasn’t much to see this year was a difficult barrier to overcome, regardless of price," said Vincent Bruzzese, Senior Vice President, Entertainment Research of OTX. "But this demographic, more acutely than any other, is weighing the value of the in-theater movie experience compared to many other lower cost, more immediate and convenient entertainment options. And increasingly, young males are deciding to grab a DVD or video game to watch or play at home."
The study drilled down to identify specific causes for lagging movie attendance, including:
— Rising cost vs. value of movies: While the overall costs of going to the movies (ticket prices, concessions, babysitter, gas prices, etc.) have steadily increased, the quality of movies has remained relatively the same, according to OTX survey respondents. This suggests that the moviegoing experience has to be perceived as offering more for the entertainment dollar than other competitive options.
— Misperception of DVD window: Roughly 40 percent of all moviegoers believe it takes under two months for a movie to go from the theater to DVD, with close to 60 percent believing that less than three months is the average length of time. (Average length of time is actually about 4 months.) This misperception, combined with concern about the cost of going to the movies, has lead many respondents to claim that it is not worth the money to go to the movies, when they feel it will be out on DVD within a very short period of time (30 percent feel this way).
— Preference for movie-viewing in the home growing: In 2003, 79 percent of people said that they prefer to see a new movie when it is released in theaters, versus only 59 percent in 2005. Those who prefer to wait until the movie is out on DVD/VHS (33 percent) or on TV (5 percent) recorded a 17 percentage point gain from 2003. The primary reason for watching a film on DVD is the convenience of being able to see a movie ‘whenever they want’ (66 percent).
Bottom line: Its not the Revenge of thge Flop; As we mentioned back in July, its the overpriced, mediocre experience that is increasingly keeping movie goers away; males teens in particular are emblematic of this trend.
Will movie theaters become the new radio? (i.e., lose their core audiences to alternative entertainment forms).
I must once again exhort theater owners: Wake up, before its too late!
Young Male Audience 24% Lower in Summer 2005 than Summer 2003;
Movies Now Battle Digital Entertainment Options to Attract Critical Demographic
LOS ANGELES, Oct. 10 /PRNewswire
Hollywood movies misfire with core audience–study
Mon Oct 10, 2005 6:31 PM ET