Why Movie Watchers Are Abandoning the Multiplex

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Why Movie Watchers Are Abandoning the Multiplex Noticed that your local movie theater is a little quieter than usual lately? Don't go thinking that moviegoers have just gotten more considerate. The reason wireless phones aren't going off, babies aren't wailing, and chatty know-it-alls aren't giving away relevant plot twists before they happen is simple: People just aren't there.

Don't blame ticket prices: Multiplex attendance is down noticeably this year. Box office receipts are off by 4% at this point relative to 2010 -- and that's even with exhibitors charging slightly higher ticket prices. Actual movie theater attendance is down 6% year to date.

Don't blame the economy, either: Box office receipts actually grew during the recent recession. Escapism in cinematic form seemed to be the right medicine for an economic lull a couple of years ago. Why should it be any different now?

And it's not the content: This is the year, after all, in which we got the eighth and final installment in the Harry Potter movie series. Other popular franchises -- Transformers, Cars, Pirates of the Caribbean, The Hangover -- kicked in with fresh sequels.

Something's wrong -- and don't go telling me that folks finally got tired of paying $8 for a tub of popcorn.

The Adjustment Bureau

A popular theory for the slide in ticket sales is that folks have been outfitting their home theaters with high-def flat screens that continue to get cheaper.

The industry's push over the past two years has been for 3-D televisions, giving movie buffs one less reason to pay a premium for 3-D screenings. The growing popularity of Netflix (NFLX) -- Qwikster fiasco notwithstanding -- is also encouraging more couch potatoes to hook up their televisions to the Internet to stream video. Netflix alone now has more than 20 million subscribers paying to stream content.

There are some holes in that theory:
  • For starters, folks have been snapping up plasma and LCD flat screens for years. Why are box office receipts shrinking now?
  • Consumer electronics retailers are also having a hard time selling 3-D sets, and folks are still enjoying the immersive experiences on the big screen. 3-D outfitter RealD (RLD) is expected to post its first annual profit this fiscal year on a 19% spike in revenue.
  • Streaming services such as Netflix and Hulu have also been more popular for television shows than movies, largely because studios aren't allowing their freshest retail releases to be made available on all-you-can-stream websites.
The Fast and the Furious

Another popular theory is that release windows are narrowing. The time between a film's theatrical release and its availability on DVD and pay-per-view is now just a few months. Cable and satellite television providers are pushing to narrow the gap.

Comcast (CMCSA) recently abandoned plans to offer Eddie Murphy's upcoming movie as a $60 pay-per-view rental just three weeks after its opening. Exhibitors threatened to boycott the film, and the cable giant backed down. However, DIRECTV (DTV) has been offering movies just 60 days after they hit the big screen to its satellite television subscribers at $30 a pop. Sony's (SNE) Bad Teacher -- which hit DVD on Tuesday -- has actually been available as a digital purchase for two weeks through the leading online stores.

This theory also isn't foolproof. If release windows are such a big concern, why did The Lion King -- Disney's (DIS) animated classic -- rule the box office during its recent two-week multiplex run? The film was rereleased on Blu-ray, DVD, and new to Blu-ray 3-D the day after its theatrical run came to a close.

Then again, maybe content is a problem if a 1994 rerelease is enough to outdraw brand-new flicks.

Horrible Bosses

If you think things are bad now, you're probably going to have even more elbow room in the future. Seriously. Use both drink holders next time!

National CineMedia (NCMI) -- the leading advertising network placing annoying commercials before your movie trailers begin -- had some bad news for investors last week. Its stock got crushed after the company warned that its results for the new quarter would come in below earlier expectations.

In other words, advertisers are already starting to adjust their marketing campaigns for thinner movie audiences.
If you think that the defections can't get any worse, wait until next year. Not only will there be no Harry Potter to save the day, but going to see a 3-D movie may get even more expensive -- and inconvenient.

Sony has recently told theater operators that it will no longer be paying for 3-D glasses come May. Studios in this country have historically footed the bill for 3-D specs, but now the industry may be moving to an ownership model. If exhibitors don't agree to absorb the hit, your corner multiplex may force you to buy your 3-D glasses -- and that's on top of paying an extra couple of bucks for the 3-D ticket over the traditional 2-D showing.

If this happens, forget about simply doubling up on cup holders. Bring your bedroom slippers and lie down. You may have the entire multiplex to yourself.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Netflix and Disney. Motley Fool newsletter services have recommended buying shares of Walt Disney and Netflix.




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70 Comments

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Genny Lingenfelt

I was thinking of what fun going to outdoor movies were while my family was growing up. I would pack up food , blankets & pillows for children. First movie was geared for family & then it was bed time for children. None of movies were scum how ever.

October 25 2011 at 10:29 AM Report abuse rate up rate down Reply
dave49mars

I don't attend as many movies as I used to because most of it is "crass" junk! I find the language offensive; if I want to listen to such crap I'll go to a sailor's bar. Much of the content seems to be aimed at "teen airheads." I have better things to do with my time and money!

October 24 2011 at 3:20 PM Report abuse rate up rate down Reply
rtgarton

Oh and another thing. Keep the crying babies out of the theaters. Shuts off your stupid cell phones and stop stop stop with the stupid texting. When you make love are you texting as well. What is wrong with you mindless mental midgets. Get a life

October 24 2011 at 3:06 PM Report abuse rate up rate down Reply
rtgarton

I hope the theaters all go out of business. For years they have been ripping the public off with off the wall prices for popcorn and refreshments prompting people so sneak in snacks. If you were fairly priced people would buy and everyone would be happy. A small soda and small popcorn is 10 dollars.? ??? This goes for sporting events as well. $6.00 for a crappy hotdog. Concession people are the lowest form of pond scum, next to lawyers and used car salesmen

October 24 2011 at 2:57 PM Report abuse rate up rate down Reply
Greg

I won't pay extra for 3D (to me it's distracting from the story and the acting, etc) but I would happily pay $5.00 extra for a showing where anyone who talks or texts is fined, say, $10,000 as they exit the theatre. That way, people can still take their cell phones into the theatre (I wouldn't want to leave mine at the ticket booth, for example) and I wouldn't want the movie to be interrupted by having someone arrested during the movie, but I would enjoy having them handcuffed as they exited the theatre and then having them sent off to jail for six months if they couldn't pay the fine. THAT would be great entertainment!

October 24 2011 at 12:20 PM Report abuse rate up rate down Reply
mclockhart

The value proposition of movie theaters has gone off the charts. First, too many movies try to push a liberal agenda (for example, Costner's"Swing Vote")...that is not entertainment. Secondly, the value of seeing a movie today versus seeing it at home on your big screen TV for free is far less. People have less time to fit time sensitive events into their schedule, let alone shell out $40-$50 for a couple of hours entertainment. Not going to two movies a month would pay my sateliite bill.

October 24 2011 at 10:37 AM Report abuse +1 rate up rate down Reply
1 reply to mclockhart's comment
sonyfan13

+1 from me.

And, add to this, you can buy what you want to watch on disc or pay for on-demand service. The convenience of watching what you want, when you want it AND with control over the playback and the viewing environment is something the movie theaters don't have.

Sure, what you can get on DVD, Blu-Ray Disc and on-demand would not be movies that are currently out in theaters. But, of course, the movies out in theaters these days aren't worth the effort to go to a theater in the first place.

In light of this convenience, the only reason for going to the movies would be if there's a new, exceptionally good movie that you just can't miss. It seems like the industry is failing on that front for the most part and has been for years.

As an aside...

"The Lion King" in 3-D? REALLY?! Does the 3-D really add anything to the story and characterization that wasn't there in the original? I'd rather save the money and fire up my copy of said movie on LaserDisc than spend it on a theater gimmick.

October 26 2011 at 12:04 AM Report abuse rate up rate down Reply
jhrochesterny

Went to see The Help the other week, admittedly it was at 9:30 pm on a tueday night, but still this had good reviews and was talked about a lot around here I thought more people would want ot see it no matter what time it was. Wrong, I was one of 5 people in the theater, and it was a full size one not one of the small ones, in one of the biggest complexes in town with the IMAX theater in it too. The entire parking lot was empty. This was also the first time I had been to a theater in maybe 5-6 years. Just nothing out there I must see I guess.

October 22 2011 at 12:24 AM Report abuse rate up rate down Reply
BREXSIS

Well at Least At Drive -In You Could be Comfortable And When The Noise Was To Much You Could Roll Up The Windows,Of Course They Would Have To Improve The Audio But It was Sure Cold In The winter,Sure Miss The Drive-Ins Hope They Bring Them Back someday soon.

October 21 2011 at 10:54 PM Report abuse +1 rate up rate down Reply
joseph0958

Actually the Multiplex experience is horrible. Cramped small theatres, always way too noisy, too cold and poor picture quality....

Second they blast a lot of bad ads before the movie starts...

October 21 2011 at 7:28 PM Report abuse +3 rate up rate down Reply
1 reply to joseph0958's comment
Greg

@joseph, yep, those tv ads that we try to escape by taping tv shows on our dvrs and then scrolling by them are just blasted at us, 30 feet high, and we've actually left our homes and paid to see these ads!

Now, really, who is the stupid one in here?

October 25 2011 at 12:40 PM Report abuse rate up rate down Reply
smtrahdco1

Its Obama's fault.

October 21 2011 at 5:21 PM Report abuse +2 rate up rate down Reply
1 reply to smtrahdco1's comment
hgeorgech

no, Dubya's ...

October 21 2011 at 5:52 PM Report abuse rate up rate down Reply