LOS ANGELES (
) -- In a few weeks, the Oscars will celebrate the best movie night America had to offer in 2011. Just what "movie night" means to average Americans is still up for debate.
In the past decade, where consumers spend their movie nights has become just as important to the film industry as what they're watching. According to
data, movie ticket purchases slipped 4.2%, from 1.34 billion in 2010 to 1.283 billion last year. That's well off the record 1.575 billion tickets sold in 2002 and marks the seventh year-over-year decline in tickets sales in the past 10 years. Though box office receipts topped $10 billion for the third consecutive year in 2011, they declined for the second straight year from 2009's
-driven record of $10.595 billion. This despite big-budget successes such as
Toy Story 3
, the final installments of the
saga and scores of superhero films.
As the Oscars approach, fewer Americans see theaters as a necessary part of the movie experience.
"It's been something that's been happening for quite a few years, and you see it in the greater percentage of mainstream Hollywood output that is for younger people," says John Farr, film critic for
and founder of home media review site
"We don't see as many human-scale dramas aimed at adults, and for very good reason: Adults don't go to the movies as much."
So what's happening? Moviegoers have a lot of other, more convenient options at their disposal than in 2002. Despite infuriating customers by splitting DVD and streaming plans,
jumped from 19.5 million customers in 2010 to 24.4 million in 2011. Of those, 21.7 million subscribe to its streaming service. This company, mind you, has allowed content partners such as
to withhold "new" releases for months at a time just to build its streaming library, yet still convinces folks to stay in their warm, uncrowded living rooms and wait for content to come right to their HDTV.
Not to be outdone,
subscription streaming joint venture
increased its subscriber base 60% last year and now has upward of 1.5 million people watching its television and film content. Meanwhile, the 10 million people that
analysts say have subscribed to
Prime premium shipping package also have access to thousands of streaming films.
Granted, none of those services provide first-run films (or, more accurately, first-run films anyone's jonesing to see), but do they have to? Hulu Plus and Netflix each charge $8 a month for their streaming services, while Amazon Prime's $79 annual fee comes to roughly $6.58 a month. The average cost of a movie ticket, according to the National Association of Theater Owners, jumped from $5.80 in 2002 to around $8 last year. The cost of streaming doesn't jump to $13 if you happen to live in major city, either.
"Fifteen years ago, if you wanted to rent a movie you would have said 'Gee, John, we were going to watch a movie but you didn't go to get it at Blockbuster," Farr says. "Today you can order the DVD through Netflix or stream something, so there's that convenience and it makes the home viewing of movies a lot more attractive."
That doesn't even include the services already coming into consumers' homes thanks to their cable and Internet providers. Video-on-demand service has grown into a $1.3 billion a year industry for Comcast,
Time Warner Cable
and other providers, according to
's VideoWatch VOD tracking service. Internet-based video-on-demand service from Amazon,
partnership with Vudu kicked in another $204 million, but that's still small change compared with what the studios have in mind.
As recently as November 2010, Time Warner CEO Jeff Bewkes was batting around the idea of debuting first-run movies on demand for $30 to $50 a pop. Independent studios did him one better last year, when distributor Roadside Attractions released the Kevin Spacey financial thriller
in theaters and VOD simultaneously last October. The film made $11.5 million against a $3.5 million budget, with $5 million of that take coming from on-demand purchases alone. Not only is
writer and director J.C. Chandon up for an Academy Award for Best Screenplay, but his film nearly doubled its audience just by letting folks watch it from their couches.
"What a lot of Hollywood directors say about movie theaters being like church is true to a degree, and you want that sometimes, but in a way they're talking to themselves," Farr says. "I don't care. If I could have seen 'The Tree of Life' on a Blu-ray instead of at a movie theater 20 blocks away, that would be an easy decision to me."
And why shouldn't they? Nobody's trying to make them watch TV retreads of
The Lion King
Beauty and the Beast
Star Wars Episode I: The Phantom Menace
and other "new" releases that consumers have been watching comfortably at home for more than a decade. Nobody's talking over the unpausable movie three rows in front of them. Nobody's charging them $6 for popcorn on their couch. Most importantly, nobody's trying to jack up the price of the experience by inflating ticket prices to $18 for a questionable 3-D conversion.
"The reason Hollywood is able to hide how badly they're doing with sales and attendance is because it raises the prices of tickets," Farr says. "The price of one 3-D ticket is $18, and you could buy a Blu-ray for that -- or a few Netflix rentals -- before popcorn, soda, parking and a baby sitter."
Instead, the cost of watching movies at home has gone down. The cost of an LCD television cratered 24% during the recession in 2009 and never recovered, according to NPD Group's TV research arm
. That cost fell another 6% last year and is forecast to fall another 6% this year before dropping 7% to 8% per year through 2015. During the 2011 holiday season, for instance, the average price of 40- and 42-inch LCD televisions fell below $500 for the first time. Even 40- to 47-inch 3-D LCD televisions dropped below $1,000, though enthusiasm for that particular feature got a bit fuzzier after
and amid second-rate product such as
Mars Needs Moms
"The home equipment -- the LCD screens -- have gotten a lot better and a lot cheaper," Farr says. "There are more people in the country who have families or who are empty-nesters who can afford a 'media room,' which may be your living room with a nice 42-inch LCD TV with speakers and the whole thing. About 15 years ago that would have been a really pricey proposition."
So what does the movie industry have to do to prevent consumers from holing up in their living rooms during blockbuster season? When gimmicks don't work and the pricing doesn't add up, the least it can do is make the theatergoing experience more convenient. While ticket sales and revenue slumped in 2011, ticket sales site
figured out a way to reverse those trends for its service and bring new customers to the show.
By shifting its focus off desktops and laptops and onto consumers' smartphones, Fandango saw ticket sales from its mobile app soar 73% last year over 2010. Thanksgiving weekend sales for mobile alone climbed 60%, while 22% of all sales on the site during opening weekend for
The Twilight Saga: Breaking Dawn, Part 1
came from mobile devices.
"We believe that the convenience factor is helped fuel ticket sales on mobile. Most moviegoers are attached at the hip to their mobile devices, and everything you need to know about the movies is right there at your fingertips," says Harry Medved, spokesman for Fandango. "Because your phone is with you all the time, it's easier than ever to find reviews, trailers, showtimes and purchase tickets for a film all in one place."
While reviews, sales and GPS-based theater and showtime finders are great and all, having the ticket sent directly to a mobile device helps as well. Fandango just launched its paperless mobile ticket for 1,200 screens at
Regal Entertainment Group
across the country. As a result, ticket sales that used to happen four to five hours before the movie starts have shrunk to two to three hours before showtime.
"If your plans change, you can make your moviegoing choices as flexible as your plans, thanks to mobile ticketing," Medved says. "If you arrive at the theater, and your movie is sold out, more moviegoing options are immediately available to you via the Fandango apps."
The issue, Farr says, is that theaters are going into "a managed decline." While the number of screens across the country has risen by more than 18,000 since 1987, the National Association of Theater Owners has found that the number of theater sites has dropped from more than 7,100 in 1995 to just under 5,600 today. Meanwhile, Blu-ray share of home video technology has risen from just 3% against the DVD in early 2009 to 25% today, according to Nielsen Videoscan.
"I'm not predicting that theaters are going to go away, but I predict that they will consolidate, that they may be fewer in the future and that they will have to do something to reinvent themselves," Farr says. "In the old days going to the cinema was like going to a Broadway play with beautiful cinemas, but today going to a multiplex is kind of a cheap-feeling experience, with seven or eight screens and people talking all around you."
-- Written by Jason Notte in Boston.
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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.