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Tuesday, January 4, 2011

The Reality Of Box Office Revenue Decline

A recent highlight at Andrew Breitbart's Big Hollywood ham-fistedly attempts to show that the types of films that are made in America are so "anti-American" that people are fleeing the lines at the box office en masse.

While that is clearly the intent of the author that re-posted the article from USA Today - and obviously punctuated by a picture of modern conservative "boogeyman" Matt Damon - what the majority of the commenters and the author fail to realize is that it's a multi-level reason as to why box office receipts have lowered.

Over the years, the increase in movie ticket prices has pushed more and more people away from theaters. The average price in my area for a non-matinee showing of a feature length film is $7.00 for an adult and $4.25 for a child under the age of 12. Couple that with concession prices - the actual revenue generator for your local theater - and you're looking at spending upwards of $40 per trip to the local cinema for a family of 3. In today's economy, it's no surprise that there has been a decline.

But what of "choice and competition"? You know, the conservative cure-all.

I can recall the long periods of time one had to wait during the 80s for a film to be reintroduced to the consumer on cable television and ultimately onto VHS. While that process could take upwards of a year to happen, films that are seen in theaters in May - the start of the summer movie season - are available on a variety of platforms within as little as two months. This is a great incentive for the consumer to wait just a short number of weeks to view a desired film - complete with extra features - for a fraction of the cost.

These releases can be picked up at your local video retailer - though those are disappearing at a rapid pace due to online film outlets like NetFlix and convenience locations like RedBox - and can have multiple viewings of the film and no longer have to face the risk of late fees that boarder on extortion. Not only that, but online film outlets often allow the consumer to stream to a variety of platforms to experience the movie in your desired setting.

Is it any wonder why box office revenues have dropped?

Now, this isn't to say that Hollywood is guilty of producing what amounts to visual crap, but there is a market for just about anything these days - just ask the Wayans Brothers. But what is more of an issue than most people will realize is how distribution works.

The film you might want to see is only playing in a specific market. After all, not everyone lives in a large metropolitan area like New York, L.A., Chicago, or Atlanta. What if you have to drive 2hrs out of your way just to see a film - that adds to the cost, and will be yet another reason why you would opt to wait until the film is delivered on your particular cable service or can be purchased or rented.

This notion that Hollywood is seeing decrease revenue because of story content runs completely contrary to the actions of the consumer and how they are willing to spend or save and opt for the sake of convenience.

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