We keep
hearing about it, yet it's hard to swallow, apparently there is a problem with
shrinking box office sales, or its there? In case you aren't aware of
this recent flurry of reports, take a look at this story from Yahoo that RTV71 alerted us to. In it,
we can read this quote that possibly sums it up: "If you believe all the press
reports, we are in the middle of Armageddon with box office erosion," said Peter
Chernin, president of News Corp., parent of the Twentieth Century Fox film
studio. "I believe that is a definite overreaction." Well, this guy ought to
know!
There are many theories being put forward to try
and explain this situation, many of us have presented our own here
that are drawn from our own lifestyles and observations. Still some others
shake their heads in disbelief because we all read that each new blockbuster
that hits the theater surpasses yet another record, at least in dollar figures.
So maybe we would be interested in looking at some studies conducted in the
United States that can give us some hard figures gleaned from some probing
questions.
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Product flow alone is not the only reason behind the decline in box office revenues. Among those who saw fewer movies in the first half of this year than the first half of last year, ticket prices (49%) and time (40%) are big "Indeed, dissatisfaction with the theatrical experience and the increasing attractiveness of home entertainment as an alternative do seem to play roles," says Durkin. "And, while relative to the value offered by a DVD, movie tickets may seem expensive, there are signs that the growth in DVD sell-through market over the past few years is beginning to slow down." Another recent Harris Interactive survey of 5,371 active DVD buyers within the core market of 15-39 year olds finds that just 11 percent expect to buy more DVDs in the next six months than during the last, compared to the 15 Says Durkin, "The real surprise is the growth in the rental market." Rentrak, an industry source for rental transaction data, reports that Americans rented more than 1 billion DVDs during the first 26 weeks of 2005, an increase of 17.7 percent from 856.5 million units rented last year. Leading the charge, subscription rental service Netflix's 2nd quarter revenues rose 37 percent year-to-year. In addition to offering its own subscription rental service, rental market leader Blockbuster ran their largest promotional campaign in years, boasting "No More Late Fees" in an effort to enhance its traditional business. "The ever shorter time between the theatrical and home video release of movies, DVD home delivery services, and rapidly improving home theater systems certainly make it more enticing to stay home." says Durkin. |
Can Hollywood studios really expect to maintain box office ticket sales when they are creating new, convenient alternatives? At least for once we can see that reality is beginning to take hold and they are seeing (if they will look) that piracy is not the overwhelming issue here. This is just the tip of the iceberg of information in this enlightening press release from PRNewswire. Those that would like to scan some tables on the subject can do so by visiting this link.
Source: Various
