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American movie industry's box-office blues

Technology lets movie consumers be more choosy; they're willing to sacrifice timeliness for value.

January 05, 2012
  • Eric Michaels sells tickets at the AMC theater at Universal CityWalk.
Eric Michaels sells tickets at the AMC theater at Universal CityWalk. (Los Angeles Times )

Americans bought 50 million fewer movie tickets in 2011 than the year before, continuing a downward slide for Hollywood that began in 2003. The anemic ticket sales — the lowest total in 16 years — more than offset yet another increase in average ticket prices, causing box-office revenue to fall for the second consecutive year. The numbers have some industry watchers wringing their hands, but they're not a portent of doom for the film industry. They're just a sign that movie fans have adapted to new technologies faster than the studios have.

Analysts offered several explanations for the disappointing box-office numbers, citing high ticket and concession prices, increased competition from video games (such as Call of Duty: Modern Warfare 3, which generated more than $1 billion in sales in a little over two weeks) and an underwhelming and unoriginal slate of movies. But then, when the seven biggest hits were all sequels, it's easy to see why studios put the big dollars behind familiar fare.

A more interesting observation came from The Times' Ben Fritz and Amy Kaufman, who noted a trend that's developed over the last several years. Major studio releases often had strong opening weekends, then faded rapidly. That suggests that avid filmgoers may still be flocking to the multiplex for new releases, but casual fans — those who wait to hear what their friends recommend — aren't. Meanwhile, as the population ages, the percentage of young (and presumably more impulsive) ticket buyers has plummeted.

New technologies in the living room, such as digital video recorders and large flat-screen TVs, have helped train consumers to wait to watch the programming they're interested in until they can do it on their own terms. This shift toward on-demand viewing has been supported by the spread of extremely high-speed Internet connections, which have enabled services such as Netflix's movie streams. Industry figures through September show that on-demand and discount home-viewing options are growing rapidly in popularity.

Some independent movie studios and producers have responded by embracing on-demand services, even to the point of offering titles on demand while they're still playing in theaters. The major Hollywood studios haven't been so bold; they can't afford to alienate the theater chains that play a crucial role in launching and promoting the hugely expensive "tent pole" films that bring in the largest chunks of the studios' revenue. Nevertheless, this year's box-office numbers fit into a pattern that's consistent across all forms of entertainment. Technology is enabling consumers to be more choosy, and they're willing to sacrifice timeliness for value. Studios and theater chains can cling to the hope that the coming year's sequels, reboots and book adaptations will be bigger hits than last year's, but the trend lines spell trouble for the status quo.

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