Movie ticket sales are in decline, people just aren't going to the theater in the numbers that they used to. I'm not just comparing today's numbers to the golden age, when everyone went to the theater once or twice a week, it's down by over 136,000,000+ fewer tickets sold every year since 1999.
The New York Times thinks it's because going to the movies have become so expensive. Ticket prices have gone up beyond the rate of inflation for reasons I will explain momentarily.
Jeffrey Katzenberg, Dreamworks Animation honcho and author of the Katzenberg memo, says it's because the recent movies being released suck donkey balls, especially most of the 3D movies that Hollywood was so certain was going to be the panacea for all their ills.
They're both right.
Going to the movies is cripplingly expensive, and there's no sign that it's going to get any cheaper anytime soon.
If things don't change course, and soon, going to the movies may end up like going to pro-league sporting events, something that ordinary people can only afford to do once or twice a year, if they're lucky and can save up enough cash to buy an overpriced ticket in the nose-bleed section by not buying food for their children. (Okay, I exaggerate, but that's part of my charm.)
Why have the prices been going up?
Well, traditionally the big movie theater chains were loathe to hike up prices beyond the accepted rates of inflation, because ticket sales weren't their bread and butter. Their bread and butter was literally the popcorn, sodas, and others snacks they sell to the customers who come to the see the movie. Their share of the ticket sales was mostly to cover the costs of showing the movie, and the rest went back to the distributor.
And that's where the problem started. The distributors were convinced by evangelists like Katzenberg and James Cameron that 3D movies were the future, and that all theatrical releases will eventually be 3D, and 2D will be strictly for the Luddites. So they pressured the exhibitors to get into all kinds of debt to upgrade their theaters for 3D because that was the future.
At first the future of 3D looked so bright they all had to wear shades. The premium pricing went from paying off debts to paying off dividends, so they thought: "Hey, let's just make this once temporary idea permanent?"
It sounded great, but there was a problem.
A lot of people didn't like the 3D experience in both cost and comfort. They did it once, didn't do it again, preferring to either catch in the cheaper and less straining 2D, or just stayed home with either TV or Netflix providing their evening's entertainment.
The problem got really bad when the traffic of people who weren't bothered by 3D's price or problems slowed down considerably.
Why is that?
Well, to answer that question you need to ask yourself another question: Why go to the movies in the first place?
The answer is pretty straightforward, audiences go to the movies to immerse themselves in a complete experience. Visual, aural, and yes, even intellectual. Basically, outside of the occasional Michael Bay boom-fest they want good stories told well, and aren't going to drop any shekels just because something is in 3D.
And the ironic thing is that this is all just a case of history repeating itself. Just like in the 1950-1960s the studios went nuts over gimmicks like 3D, big screens, and mega-budget all star blockbusters to compete with the convenience of television, and it almost killed the industry. It wasn't until the late 1960s to early 1970s that the movie business got the shake up it needed to survive and thrive in a new era, and that was mostly in the field of stories and storytelling.
Nowadays Hollywood is looking at not only competition from TV, but from Netflix as well. Both not only deliver convenience at a reasonable price when compared to regular movie going, but also much greater quality in the field of stories and storytelling that you just don't see much in theaters these days. The 60s-70s generation that saved Hollywood back in the day are either creatively/commercially burnt out, or have become the establishment that they sought to overturn. The drop in theatrical output from the majors have also left wide gaps in the marketplace.
Can a new generation fill that gap and get the movie biz out of this downward spiral and back on the upswing, or will they just repeat the mistakes of the past? Only time will tell.