March 27, 2014
CBS MoneyWatch - Is it any surprise, really, that fewer Americans are going to the movies?
After all, a ticket can cost more than $10, and is heading toward $20 in some cities. Throw in the popcorn and beverages, and a family movie night suddenly becomes a very pricey excursion.
And for what? After the panicked hunt through a crowded theater for open seats, there's the long wait through endless commercials and previews. Did you really pay all that money to watch Fandango ads?
The end result is that the number of tickets sold in the U.S. has fallen nearly 11 percent between 2004 and 2013, The Wall Street Journal reports. Fewer people are indeed partaking in a ritual that was once an American tradition.
But this has hardly been a crisis for Hollywood. All the studios and theater chains had to do was raise ticket prices to combat the dwindling number of moviegoers. And so 3-D films took hold, along with the higher prices theaters could charge for them. Prices for regular films climbed as well, and while people grumbled many still lined up to pay.
But you can't raise ticket prices forever. At some point, the box office is going to suffer. Movie ticket sales in the U.S. are barely growing now, with revenue at $10.9 billion last year, up from $10.8 billion in 2012.
It's time for some Hollywood-style action. Movie theater owners, desperate to juice business, want to start selling cheaper tickets on one day of the week. The day hasn't been named -- although it is likely to be a weekday -- and the amount of the discount hasn't been announced.
This will be a slow rollout. In fact, Hollywood is so nervous about the idea that it only wants to try it out in one as-yet-unnamed state. It's a harder proposition than you might think. All of the studios and theater chains have to be on board, so no one starts cannibalizing the business, The Journal reports.
How much would prices have to drop to bring Americans back into the movie-going fold? Would people return for a $5 ticket? Would popcorn need to be discounted also?
Theater owners are going to have to find that sweet spot soon before they lose more people to the comfortable living room sofa, where Netflix and Amazon Prime beckon, where there's no line for the restroom and where the drinks and snacks are much, much cheaper.