Higher prices have hit the move theater industry over the past several years, but that hasn’t necessarily hurt anyone. People who go to movies want to have great content. They want fun experiences, like 3D movies. When it’s done right, the higher prices are willing to be paid.
The challenge for the movie theater industry is the actual consumer experience. 82% of consumers who attend movies regularly say that they’d be willing to pay up to $20 above the regular price of a ticket to watch a newly released movie at home.
Some might say that the movie theater industry is slowly dying, but that’s only because they’re looking at facts and statistics from a really difficult 2014 season. The movie theaters which focus on providing an improved customer experience receive the highest ratings because about half of all people who go to the theater say they’re more likely to return when they have upgrades available to them.
How Outside Influences Change the Movie Theater Industry
- The average person will watch 5 movies in the next 12 months at a movie theater. The 18-34 age demographic sees more movies, while the 50-59 age demographic sees the fewest movies.
- 57% of respondents to an RBC survey go to 3 or fewer movies a year.
- 35% of people say that they are influenced by a friend’s recommendation to go see a movie. The 18-34 age demographic is the most likely to decide on a movie based on recommendations.
- More than half of all movie theater patrons say that they would be interested in last second cheap seats to see a film.
- In the average quarter, 80% of people say that they intend to see at least one movie at a movie theater.
- 10% of 18-24 year olds said the lack of sequels is why they didn’t go more often to see movies at a movie theater.
- Half of movie theater customers say they haven’t changed their habits over the past year.
- Ticket price is the #1 reason why people say they are going to the movies less [53%]. Not having an interesting movie in the right genre [41%] or wanting to watch the movie on their own time [30%] are other leading factors.
- As reported by Deadline, with regards to pricing, 42% of respondents would pay $1+ extra for a premium seat.
There will always be blockbusters that attract large audiences to movie theaters. The popularity of the Marvel Movie Universe is evidence of this. As for the other movies that are released, however, the quality of the movie is just as important as the quality of experience that the customer receives at the theater. If the movie theater doesn’t have upgrades or quality amenities, then there’s a good chance a movie-goer will just wait to stream the movie on-demand when it is released several weeks later.
How Could Movie Viewership Increase?
- PWC asked survey respondents and focus groups what would motivate them to see a movie at a movie theater more often. 53% said that lower prices would be the best thing movie theaters could do.
- 23% of respondents said that they would go to the movie theater more often if better movies were created/produced by studios.
- 9% of respondents said that they might consider heading back to the movie theater if food prices weren’t so expensive.
- Another 7% stated that they would like to see more deals, discounts, or coupons made available to them so they could see movies more often.
- Then there’s the 4% of people who said if they had more time to go to the movies, then they would do so.
- Just 17% of people say that the comments made on social media sites like Facebook or Twitter are “highly influential” when it comes to their decision to go see a movie.
- 3 out of 4 people say that the main reason they go to a movie is because their interested in the genre offered and when it is playing.
- Just 1 in 4 people say that they go to the movies because it has more value than other entertainment activities that are available to them.
- 87% of people say that they would purchase a $20 per month unlimited pass that would let them see movies whenever they wished.
The core theme in all of the responses offered by consumers who go to movie theaters is value. Some households just don’t see the value in going to a theater. At $10 per ticket on average, a family of 6 has to spend $60 on tickets to see the movie there. Add popcorn, a couple drinks, and a box of candy and you’ve hit $100. This is why there is so much interest in the on-demand, DVD/BluRay, and streaming movie markets. The family of 6 can purchase an entire year’s worth of movie access from several streaming services for the price of one trip to the movie theater. This is why the movie theater industry is so strongly perceived to be struggling right now.
How The Global Market Masks Lower Demands
- Movie theaters have been able to use higher ticket prices to make up for lower levels of ticket demand.
- According to The Motley Fool, growth in China and India is exploding, with the former country expected to become the world’s biggest film market in 2017. The Chinese box office totaled more than $1 billion in February 2016, surpassing American ticket sales of roughly $800 million.
- The Chinese box office grew by almost 50% in 2015.
- Expanded franchises are also created high levels of demand for specific movies while a majority of released movies flounder. We’ve seen new movies in the Star Wars franchise, the X-Men universe, multiple superhero movies from Marvel with an ongoing storyline, and many more.
- Reboots are also an important part of the future movie experience. From The Mummy to Ghostbusters to Men in Black several projects are expected to have future release dates that bring back familiar names.
- The international box office in 2015 was $27.2 billion compared to the $11.1 billion US/Canada box office. The international box office in U.S. dollars is up 21% over 5 years ago, while the global box office is up 18% in the same time period.
More movies today are made with international partnerships than have been done in the past. Sometimes movies are released more because of what the worldwide box office can provide instead of what the US market is willing to offer. The Expendables franchise is a good example of this. More and more often, the smaller movies have a bad run in the theater, but have new life once they reach online streaming services. This means the movie theater industry is banking on highly marketed and anticipated potential blockbusters in order to survive. As we discovered in 2014, that’s a gamble which doesn’t always pay off.
Why There is Always Potential Growth for the Industry
- In the US and Canada, there were a total of 1.32 billion tickets/admissions sold to movies at movie theaters in 2015.
- 69% of Americans and Canadians went to a movie theater at least once in the past 12 months to catch a movie.
- The 12-17 age demographic saw a 7.3% increase in the total number of tickets sold in 2015.
- Films released by MPAA members were up 8% in 2015, due to a 31% increase in films released by studio subsidiaries.
- 54% of the box office revenues is traditionally generated by women, yet 80% of the top grossing films in 2015 attracted audiences that were primarily male.
- Total cinema screens increased 8% worldwide in 2015 to over 152,000, due in large part to continued double digit growth in the Asia Pacific region.
- Movie theaters continue to draw more people than all theme parks and major U.S. sports combined.
- Frequent moviegoers who go to the cinema once a month or more continue to drive admissions, accounting for 49% of all tickets sold in the U.S./Canada but only 10% of the total population.
- 35% of the general population reported to the MPAA that they attended at least one 3D movie or large screen format movie in the past year.
There’s a lot of growth potential, even in the mature markets, that the movie theater industry could focus upon. The loyal movie customers are going to be there whenever there is a good film to watch. It’s the households that only see a couple of films per year that the industry could target. 31% of the US population considers themselves to be non-moviegoers. Another 10% say they only go to movies infrequently. If those demographics could get into a movie theater just 1-2x per year, the revenues could be amazing for this industry. By focusing on price and the experience received, there is a chance that this could happen.