Do Movie Theatres Love Recessions?

When’s the last time you watched a film in a movie theatre? This past weekend or has it been awhile? Well, if you’ve watched a movie in a theatre within the last month, you’re in the minority.

Sixty-one percent of adults said that they rarely or never go to the movies, according to a Harris Interactive poll conducted in early 2012. More importantly, the moviegoers indicated that the recession had impacted how often they go to the theatre. Fifty-five percent of the people who watch movies in the theatre said that they see fewer films now.

However, in 2009, ticket sales grew by 17.5 percent, to $1.7 billion, according to Media by Numbers, a box-office tracking company. Attendance also grew by 16 percent.

The disconnect between those surveyed in the Harris Interactive poll and 2009 box office numbers might seem perplexing, but a quick analysis of the yearly total gross numbers helps us better understand what’s going on. In 2009, total gross grew by 10 percent. But in 2010 and 2011, — years which those surveyed in the Harris Interactive poll would be recollecting — total gross declined by 0.3 percent and 3.7 percent, respectively, according to Box Office Mojo, a box-office reporting service.

The idea that people who want to forget their troubles often do it in movie theatres might be a misconception. In 1989, the employment rate was at a relatively low (and happy) 5.4 percent, but theatre audiences grew by 16.4 percent. In 2011, when the unemployment rate was hovering around nine percent, ticket sales declined by 4.2 percent from the previous year.

The reason for the incongruent relationship between ticket sales and unemployment rate is due, in large part, to the quality of movies made. Though Martin Kaplan, the director of the Norman Lear Center for the study of entertainment and society at the University of Southern California, argues that it’s common sense that people want to hide in a dark place and forget about their problems, they might not want to if they’re not intrigued by any of the movies being shown in theatres.

Moreover, as theatres continue to make technological advances (and pay for these technological advances) and movie studios continue to lose money on eight out of ten films made (according to my movie business professor, Peter Exline) ticket prices will continue to increase.

Ticket prices have grown by 41 percent since 2001, according to The New York Times. In 2001, the average price for a ticket was $8, but in 2011, the price had increased to $11.75. Children’s tickets rose 67 percent in the same period and senior tickets increased by 95 percent.

The other factors that influence yearly box office sales — quality of movies and ticket prices — often mask our ability to understand whether there is an inverse relationship between box office totals and unemployment or overall health of the economy. Though consumers might spend more on affordable splurges during times of distress, perhaps a night out at the movies isn’t so affordable anymore.

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