Warning Signs

If you've gone to a movie theater lately, have you seen many people disguised as empty seats? That's no accident. The weekend ending this past May 15th marked the 12th straight decline in weekend box office from the corresponding weeks a year ago. Overall, ticket sales are down six percent from the same period in 2004. According to Entertainment Weekly , this is the third consecutive year that fewer people are going to the movies.

To students of film history, the past few years are looking similar to the period starting post-World War II and continuing on into the 1950s. The rise of television and populations' moving from the cities to the suburbs led to movie ticket sales plummeting. The current problems don't stem from any population shift, but they are tied to television. Specifically, it's bigger and better televisions – plasma and HDTV. It's also that DVD players are becoming cheaper. The gap between the picture and sound quality in a movie theater and the comparable quality at home is shrinking.

Now some of the fear and speculation may be premature. The drop in ticket sales this year may have as much, if not more, to do with the quality of the movies than anything else. By critical and popular standards, there haven't been many good movies this year. Nothing has captured people's imagination so far. If the new Star Wars film, The War of the Worlds, and other blockbusters succeed, the early-year drought may seem like ancient history.

I truly hope the summer movies, which appear promising, do stem the tide. But even if they do, theater owners should not just breathe a sigh of relief and continue business as usual. They should look upon the early part of this year as a warning. Why did I specify theater owners and not the Hollywood studios? Because there's a huge difference between the ticket drop-off now and the one post-WWII. Back then, many of the studios still owned theaters. Even if they didn't, the studios and the theaters were in the same boat. People were moving to television, which was almost completely outside the Hollywood film studios' control. Both studios and theater owners lost out. That's not the case this time.

Now it's just the theater owners in trouble. The Hollywood studios are just fine. If the people watch DVDs, the studios still make money. In fact, studios make considerably more money off DVDs than they do off ticket sales. Entertainment Weekly estimates that DVD sales bring in $24.1 billion annually, compared to $9.2 billion from theaters. Even if people are watching broadcast or cable TV, it very well may be a network owned by a company that also owns a studio: ABC, Fox, ESPN, CNN, HBO, just to name a few.

In the 1950s, to try to lure audiences back from television, the studios made more color films. They came up with Cinerama, CinemaScope and other methods to widen the screen. They tried everything, even gimmicks such as 3-D. The studios are not trying that hard this time; there's no reason for them to. The innovations they are pushing won't help most theaters. More films are being shown in IMAX, but installing such a system in most theaters would be virtually impossible. Some studios are pressuring theater owners to install digital projection systems. But the best that can be said about digital projection is that maybe it can be as good as film. As local film critic Bill Henry has often pointed out, digital projection will mainly benefit the studios. They will save the dollars currently spent on shipping film prints because movies will be transmitted electronically. The theaters will not benefit.

So what can be done? The first answer is usually “better movies.” Yes, certainly. But that's out of theater owners' hands. And, as noted earlier, studios have little incentive to change their practices. Besides, the time period between a film's theatrical release and DVD release is shrinking. So even if the quality does improve, people might just wait for the DVD.

The bottom line is inescapable: theater owners need to improve the moviegoing experience. How? Well, they're going to get little help from the studios. So they need to focus on what they can control. More importantly, they need to change their way of thinking away from short-term gains and towards long-term success. This means making changes that might cost money but could eventually increase the number of people who decide to give movie theaters a chance. Some ideas:

1. Lower ticket prices or at least don't raise them.
I'm not a business or economics expert, but it seems to me that rasing prices while sales are declining doesn't make much sense. Ticket prices have jumped by 15 percent since 2000. Attendance has slipped. Many other types businesses lower prices to attract customers. Why can't a movie theater? Offer special discounts for slow periods. I'm sure many theater owners would laugh at this idea, but what's the alternative? Keep raising prices? So while the quality gap between theater and DVD shrinks, the price gap grows. Let's look at a middle-class family with a mother, father, and two kids. They all want to see a movie one night. Four tickets cost $40. A DVD rental costs $4. What do you think they will choose?

2. Limit the theater ads or at least run them before the start time.
I wrote a column about this in 2003, and, as I wrote then, I understand why theaters run the ads. The commercials generate $500 million a year, which all goes to the theater owners. But audiences are growing fed up with having to sit though ten minutes of commercials after they've already bought a ticket. Lawsuits have been filed and boycotts organized. Think of the paradox: From the 50s to the 80s, TV had commercials and films did not. Now, in many cases, it's the opposite. You don't have soda, car, Army or video game ads on DVDs but you do in theaters. I have suggested that, at a minimum, theaters run their ads early enough so that they are completed before the scheduled showtime. Let's go back to the middle class family: With the $40 they would pay for movie theater tickets they get commercials; with a $4 DVD rental they don't. What do you think they will choose?

3. Control the theater background noise.
This includes cell phones, people talking, and noisy little kids. There's no way to completely eliminate these annoyances, but theater owners could try much harder than they do. You could have ushers routinely check the theaters during shows. I know a big multiplex would not have enough staff to station an usher in every screening. But you could have two or three go from theater to theater and patrol. If people's cell phones rings, if they are talking incessantly, or their little kids are acting up, give them their money back and escort them from the theater. This might cause a momentary disruption, but I don't think anyone else in the audience would mind. In fact, I think they'd cheer. Also, as I've argued earlier, no child under five should ever be allowed into a movie rated R and no child under three should be allowed into a movie rated PG-13 or higher. If the parents are too cheap or lazy to hire a babysitter, that should be their problem, not everyone else's. We'll return to the middle class family one more time: They could spend $40 on movie tickets and get commercials and crowd noise or they could pay $4 for a DVD, have no commercials and only the noise they make themselves. Again, which one do you think they'll choose?

Those three are not the only ideas. Buying tickets online can make going to movies much easier. But theater corporations and their partners, such as Fandango and Movietickets.com, don't promote this practice effectively. Their ads run only in the movie theaters, when they should be reaching those who don't buy tickets regularly. Also, they should eliminate the fees for using this service. Most businesses pay to be able to take credit cards because it will increase sales. The same principle should apply to online ticket buying. Sell it hard to convince people that it's a way to enjoy the movies without much of the regular aggravation.

As I noted earlier, ticket sales may very well rebound, and I hope they do. The drop in ticket sales is not a crisis. That's why it's the best time to act. Make the changes I propose now while it's easier. Take heed of the warning signs so the minor problem does not become a major one.

Why am I writing all of this? I'm in the small but vibrant minority that always prefers seeing films in a theater. DVDs are a terrific way to enjoy films, and you might recall that last month I sung the praises of Netflix. But there's nothing like the lights going down and being completely filled with the sights and sounds of a good movie. When it works right, a good film surrounds you and takes you on a journey to another place. You can't get that from a DVD, no matter how strong the TV and sound system.

So ten or fifteen years from now I don't want to say “I told you so.” That's because if theaters close it's not just their owners that will lose. It will also be me and all the other true film lovers.

Adam Spector
May 19, 2005

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