Part one of a
three-part installment, "Revival of the Fittest: Evolution of the Movie House Experience."
At the rate movie houses are closing, it is evident the
economic downturn has affected the film industry greatly. However, another large factor affects this
trend: market evolution. With more
consumers turning to “Video On Demand” (VOD), the industry has no choice but to
concede by moving their exhibition to an online format. As a result, we have seen a significant drop
in movie house ticket sales since it’s heyday in 2002. So who is to ‘blame?’ How can it, or should the theater exhibition
model be saved? What is the fate of the
movie theater experience?
There are 32,362 movie theaters in North America. 23,573 are closed;
11, 039 are demolished or scheduled for demolition; and 8,789 are still open
for business. Of the 8,789, only 7, 282
are showing movies; 263 are slated for restoration; and 388 are under
renovation. Wholesale revenue from
distribution, the industries historical cash cow, dropped
more than 45 percent between 2009 and 2010.
In May of last year, the MPAA expressed support of the FCC’s
act to ‘green light’ digital transmission of newer movies. This comes in defense of the piracy gap
between new film premieres and distribution.
Additionally, the FCC and MPAA feel this move is in the best interest of
audiences and their growing demands for flexibility. Many fault big industry executives as a root
cause and their resistance to splitting
profits any more than necessary. While
that may be true, why is that a fault? Successful
business planning requires periodic evaluation of all ratios for productivity
and asset deficiencies. It is a key business strategy to control success through controlling cost and determining
relevant trends to follow. But it sure
doesn’t help hearing executives weakly defend their position with excuses. (i.e.
disabilities and children keep families from going to the theater). Call a spade a spade: it’s costly to premiere
a movie. The profit loss margin is too
great now, and it simply makes smart business sense to push for dual
availability. While true digital sales
will not make up for loss in wholesale DVD distribution, and significantly
lower future revenues are a stark reality, the market trend is already moving
speedily down another track.
Film production and distribution companies are
consumer-driven. The consumer wants
convenience, and the pirating won’t cease.
The fate of film exhibition is already sealed: the theater experience is
an endangered species. That is, unless
executives find another way to bolster the movie house business model. But is that really their responsibility? I’d argue that it is not. In the next installment we will examine
exhibition responsibility and accountability throughout history verses now. Every creative industry is marked by change motivated
through transformation and adaption.
Filmmaking is no different.
Whether we like it or not, the digital exhibition model is a way ahead
for the industry.
Part two of three in the "Revival of the Fittest..." series: Who’s Fault Is It, Anyway?
Examining Root Causes to the Movie Theater Industry's Deconstruction
