Dinner OR a Movie ?

 "Popcorn and Soda Please"

The cost of going to the cinema keeps rising.  According to the National Association of Theatre Owners (NATO) during the second quarter the average price of a movie ticket skyrocketed to $8.07 and motored past the first quarter's $7.97 average.

Unfortunately, the increase was accompanied by ever decreasing attendance figures.  Through June the box office gross was down 8% year-over-year. Worse yet, the 627 million tickets sold was the lowest January-June period since 1996 !  To the industry's chagrin, the Studios' strategy of more money from fewer moviegoers is working out rather nicely, but is shortsighted, ill-conceived, and unsustainable.

The cost of moviegoing - particularly at the large, megaplexed circuits - is downright steep.  With a  $10 regular admission the new normal (and $12-$15 for a 3D feature) coupled with eye popping concession pricing (and perhaps a baby-sitter and parking) the once affordable movie date is now an out-of-home entertainment experience which can easily exceed $70.

Too Expensive?  Well it appears that way, as moviegoers become no-shows and cinemas rack up attendance figures that can only be measured on the performance scale under the "frighteningly bad" classification.  U.S. cinema admissions reached a record in 2002 at 1.56 billion and have been plunging since. Last year's admissions totalled 1.34 billion or a whopping 220 million below the 2002 peak!

This drop in attendance can be laid at the feet of the Studios and large cinema circuits and it cannot be sustained, nor can its' negative effect be off-set by continued higher admission and concession pricing.  The large theatre circuits with their highly leveraged operations will suffer first and foremost.
For their part, the Studios are doing gangbusters internationally which offset any domestic attendance shortfalls and they see no reason not to play the "get it while you can"  strategy.

Best and Happy Movie Going!
Jim Lavorato