Entertainment Magazine

Are High Ticket Prices Really to Blame For 2014’s Historic Decline in Movie Attendance?

Posted on the 14 January 2015 by Weminoredinfilm.com @WeMinoredInFilm

According to BoxOfficeMojo, North American movie theater sold 1.27 billion tickets last year, the lowest total for any year since 1995 when the biggest hits were Toy Story, Batman Forever, and Apollo 13 and theaters only sold 1.26 billion tickets. When outlets like Deadline and The Hollywood Reporter pointed this out earlier this month everyone in Hollywood seemed to collectively crap their pants before pointing a finger at the theaters, arguing that exorbitant ticket prices are clearly to blame for this downturn in attendance. The theaters fired back, rather accurately pointing out that they can only sell tickets for movies people actually want to see. So, start making better movies, and attendance will go back up, regardless of ticket prices.

It turns out that the Hollywood studios are the ones who get to shout, "I told you so!" Research and consulting firm PwC polled 1,044 movie consumers in October and November, and their big headline-grabbing statistic is that 53% of the respondents cited the rising admission costs over the last five years as a primary contributing factor to the reason they are seeing fewer movies in theaters than they used to. Not surprisingly, over half of the respondents indicated that lower ticket prices would spur increased attendance from them. Just to be clear, though, this survey was specific to summer movie attendance since 2014's summer posted a 16% year-over-year decline in domestic box office revenue, the biggest year-to-year drop in summer revenue since, well, before BoxOfficeMojo kept track of those things.

Yeah, um, but it's really just that the movies weren't as good this year, right? That has to be a big reason why fewer people went to the theaters. Maybe so, but not so much among the people PwC surveyed. Only 23% of them said they'd go to see more movies if there were better movies worth seeing, and less than 10% indicated cheaper concession prices would draw them back to theaters. Moreover, they mostly rejected any additional perks theaters or studios might offer, such as live entertainment at theaters or offering a digital copy of the movie to go along with a ticket purchase. The majority of them simply wanted cheaper tickets, or at least discounted prices for what they called "last-minute seats." The respondents indicated a willingness to pay more for the convenience of watching new movies at home, with 82% indicating they'd pay between $10 and $20 to watch the latest big, new movie on their own TV.

PwC ultimately concluded, "Despite advanced technology, better seating, improved concessions and the return of 3D movies, the negative of higher ticket prices is difficult to counter-act [...] 3D ranks last among drivers of movie attendance." They recommend that theaters and studios partner to explore incentives like monthly movie subscriptions, last minute discounts, and offering opportunities to watch new movies at home. Oddly, PwC also concluded that Summer 2014 "was an anomaly, given less interesting film options. Focusing on interesting content in relevant genres is key. And don't underestimate the value of recommendations from family and friends."

So, basically, PwC surveyed people who said ticket prices are getting out of control, but then they brushed that aside by acknowledging that Summer 2014 would have probably been just fine if studios have given audiences more movies they wanted to see. So, I guess both the Hollywood studios AND movie theaters get to shout, "I told you so!"

Hmm. They do both make a compelling argument. North American ticket prices have jumped 18% since 2007, the last year that the average ticket price was below $7. Over the past two years, the average ticket price has hovered over the $8 mark, $8.13 in 2013 and a current estimate of $8.12 in 2014. Worse yet, as the Wall Street Journal pointed out "in many big cities a movie ticket is well over $10, with 3-D and IMAX movies surcharges bringing them closer to $20 a pop." The result is that while box office revenue has increased 7% since 2007 the overall number of tickets sold has fallen by over 9%. So, whatever gain they're making in revenue is purely the result of higher ticket prices. Hollywood's actual audience of ticket-buying moviegoers is gradually shrinking.

Yet it's not like this has been a straight decline. Instead, attendance fluctuated year-to-year, going down more often than it's gone up, e.g., down in 2008, up in 2009, down in 2010 and 2011, right back up in 2012, and down again in 2013 and 2014. It's no coincidence the years when attendance went up were the years of Avatar (2009) and The Avengers (2012), two of the highest-grossing films of all time. Movie theaters look at that, and argue that everything should be just fine in 2015 because Avengers 2 and Star Wars: Episode VII seem likely to be Avatar/Avengers-sized hits. Of course 2014 was going to be a down year. Audiences simply weren't as excited about films like Amazing Spider-Man 2, Godzilla, X-Men: Days of Future Past, How to Train Your Dragon 2, and Transformers: Age of Extinction as they had been in years past. Plus, truly unexpected delays robbed the summer of two of its surefire hits, Universal's Furious 7 (delayed to April 2015) and Pixar's The Good Dinosaur (delayed to November 2015). Considering the box office track records for the Fast & Furious franchise and Pixar brand, those two films would have likely combined to contribute over $400 million to the domestic box office, roughly equating to over 50 million more tickets sold on the year, thus largely erasing any decline in attendance from 2013 to 2014.

2014 was a year in which Hollywood actually offered us a surprisingly diversified batch of movies over the summer, with multiple original R-rated comedies ( Neighbors, Million Ways to Die in the West, Tammy, Let's Be Cops, Sex Tapes), teen romances ( Fault in Our Stars, If I Stay), family friendly fantasy ( Earth to Echo, Maleficent) and drama ( Million Dollar Arm, Hundred-Foot Journey), and even flat out original action films ( Lucy) or ones adapted from an obscure source ( Edge of Tomorrow) to go along with the more typical big budget sequels and comic book movies. Moreover, they offered us multiple films outside of traditional release cycles ( Captain America in April, Guardians of the Galaxy in August, Maze Runner in September). Some of those movies worked, and some didn't, but it would be a shame if their main takeaway, particularly from the downturn over the summer, is that they simply need more sequels and comic book movies. The main takeaway, to me, is really that if Furious 7 and Good Dinosaur had arrived when they were originally supposed to the summer of 2014 would have been just fine, and Hollywood is ultimately better off giving us a more diversified slate of movies.

Then again, I don't live somewhere where the average ticket price is well over $10. If I did, I'd probably be here telling you that, damn, those ticket prices are out of control!

What about you? Are ticket prices insane where you live? Not cheap, but fair? Or surprisingly affordable? Let me know in the comments.

BTW, I previously covered similar territory with my article exploring the various ways North American theaters are trying to spur movie attendance. You can read it here.

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