The Box Office Indicator?

A colleague asks about the "box office indicator" of economic health/weakness:

"Do the current weak openings and poor attendance of recent movies lately mean much of anything?  I realize home theaters may be doing damage to household balance sheets as well as the desire to go out for a movie when Netflix and a widescreen TV would make do, and I thought movies did okay in recessions as people wanted to "go numb" a bit and have some entertainment."

We first looked at the issue of declining Movie Theater Attendance this past summer; We know that numerous factors — mostly non economic — were at work. Incidentally, the turnaround time for Netflix seems to be about 24 hours . . .

I asked Mike Panzner of Rabo Bank Securities hsi views on this; Mike observes:

"While movie ticket sales still seem to be in a long-term uptrend, the recent years’ decline amid strong economic growth is a development that bears watching…"

Mike whipped up this chart for us:


U.S. Movie Ticket Sales vs. GDP

click for larger graphic

Moviegdp_1

Data source: Box Office Mojo, Bureau of Labor Statistics

Bottom line: The timing of this economic "tell" is probably too generalized to be of usage for shorter term traders.

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What's been said:

Discussions found on the web:
  1. royce commented on Nov 7

    Kind of off topic here, but your Netflix turnaround is at 24 hours? Mine was about 4-5 days when I had the service, longer if I didn’t time the weekend right. Must vary widely by location.

  2. Barry Ritholtz commented on Nov 7

    If I return something on a Monday, Netflix receives it on Tuesday and mails the next item in ym queue — I typically get the DVD Wednesday.

    Note, however, there is a local processing center in Flushing, Queens (NYC).

    I haven’t brought discs into work in the city to mail (USPS pickup at 8 am) but friends who do tell me they can get the next movie by Tuesday.

  3. Tom K. commented on Nov 7

    Both figures should probably be corrected for population growth — the GDP will just shift down but the ticket sales number would be nearly level — it’s got a CAGR of about 3% vs. US pop growth in the 2 to 2.5% range for that period. Tickets per POP is more interesting than gross Tickets.

  4. whatbird commented on Nov 7

    The Big Picture: The Box Office Indicator?

    Link: The Big Picture: The Box Office Indicator?. My wife and I went to an early movie last Friday (about 5:30). When we came out, there were hundreds of youngsters lined up to get in to the 16 cinema facility

  5. me commented on Nov 8

    My Netflix was at 24 hours but lately it is more in line with royce. If I return on Thursday they “receive” it the following Tuesday and then by Wednesday I have a new movie. When they ship it only takes 24 hours but they seem to be sitting on them. I only became aware of the lawsuit they lost for this same thing.

  6. whatbird commented on Jan 14

    The Big Picture: The Box Office Indicator?

    Link: . My wife and I went to an early movie last Friday (about 5:30). When we came out, there were hundreds of youngsters lined up to get in to the 16 cinema facility (Rave). The adults were hard to

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