The Value of Movie Theatres In A Streaming World

The story that is… and the story that they tell us. 

If you’re the head of the National Association of Theater Owners, you’re going to be very excited about sharing the news that the movie theatre business is alive and well in 2018. There were countless smash hits and many movies approached or creeped past the billion dollar mark, in terms of global ticket sales. If you ask your friends about their weekend and social habits, when it comes to movies, you might hear a different story. Most people eyeball a movie trailer and then decide if it will be worth the hassle of traveling to the theatre, getting a babysitter, fighting over traffic, finding parking, paying high ticket prices and sitting next to someone who might be a loud popcorn chomper, a loud talker, or a group of Snapchatting teens, before opting to collapse on the couch with an endless scroll of Netflix and chill streaming content. 

That’s not a market of one analogy… at least, I don’t think it is. 

But, everyone is bragging about how great of a box office we had this past year. Just take a look at this article: Aquaman Is the Big Finale in a Strong Year for the Box Office from the New York Times: “The upsurge has not (only) come as a result of higher ticket prices, the usual way that theater operators prop up revenue. But attendance has also increased. For the year to date, attendance already stands at about 1.25 billion, up from 1.23 billion for all of 2017.” You would think that movies are making a comeback, but you need to be able to spot the reality. Look at the biggest movies of the year. They are – for the most part – superhero movies. Stories that have already (mostly) been told in other media formats. As a massive comic book nerd (and a lover of this culture), these movies do well because of nostalgia… but there’s still more. The target market for these movies encourages multiple tickets per individual consumer (as well as the higher ticket price). You buy one ticket with your group of friends whom you grew up with loving these comic books. More likely, you buy multiple tickets and bring your kids/family. One ticket or a couple of tickets is the function of movie producers who are creating movies that they know will be sold by the handful (and not the individual or by the couple). These movies (usually) don’t have huge celebrities, so while the cost of these films are amped up by the need for CGI and cutting edge technology, they’re also hedging that cost against not paying for star power talent. That’s not an indictment against going to see a movie in a theater… it’s a way that the movie producers are gaming their own system to weigh in their favour. It’s not just the movie makers. The owners of the theatres are amping things up as well. Everything from reserved seating, IMAX screens and serving alcohol to comfy seats, food service at your seat and sushi.

Times they change. 

This is all good for business, but what a change in culture. Movie theatres used to be the place to gather on the weekend (or to grab a cheap flick on a Tuesday night). Movies used to form our culture not follow it. Movies use to be the primary place that a story got told to a mass audience. Now, the content comes from established best-selling books… or comic books… or movies that are being re-adapted because they did well on their first production (usually a few decades back). 

“The narrative that streaming is killing theatrical is really overused and misleading,” said Phil Contrino, the director of media and research for the National Association of Theater Owners. “The entertainment industry isn’t a zero-sum game. People who consume a lot of content do so across multiple platforms, and when there are really strong movies in theaters they will show up.”

It’s true… build it and they will come. But with so many choices, it is harder (and harder) to get people to go. The bigger thought is this: where have all the movie stars gone? Remember when anything by Tom Hanks or Julia Roberts or Dustin Hoffman or George Clooney or Sandra Bullock drove big weekend openings, and movies that turned into parodies on Saturday Night Live, sayings that captivated our culture, memes and more? 

Movies are not dying.

Neither is advertising. But the dominance of movies (and advertising) driving culture sure has shifted. Data often doesn’t reflect that. Netflix shapes our culture now. Cheaper (to produce and distribute) movies, TV series and standup specials are driving the culture. Where culture lives, attention is focused and money is diverted towards. A good year of sales or solid growth over the year before is good from a data perspective, but it may also be a hot indicator that things have to change and adjust in order to thrive in a world where things aren’t a zero- sum game. When you’re no longer the 800 pound gorilla, the data does shift. A lot.

Don’t confuse getting people to show up and spend their money with losing the ability to drive culture.