This summer, more Americans may head to movie theaters
The cinema is a popular option during 'staycations.' Plus, enhancements to theaters like stadium seating haven't hurt.
Berkeley, Calif. — Judd Stein, exiting the United Artists Cinema on Shattuck Avenue here, represents several of the trends driving the Hollywood box office to great success – 16 percent ahead of last year – despite the national economic downturn.
First, he is still smiling after shelling out $10.25 times four for his family, not including three small popcorns at $5.75 each. While the total seems high at first blush, it's a drop in the bucket compared with the cruise idea that morphed into an Arizona road trip that morphed into a "staycation."
"I just saved several thousand dollars, so anything less than $100 feels like nothing to me," says the bank clerk with a smile.
But getting out of the house is now paramount. "I'm not going to skip a Mexican cruise and rent a movie at home," he says. "There's something about the primal experience of sitting down in a darkened theater with a community of people that takes you out of yourself."
His comments are music to the ears of the movie industry, which does 40 percent of its business between May and August. Even though critics have not been kind to many of the big-budget films that have debuted in recent weeks – among them "X-Men Origins: Wolverine" and "Angels & Demons" – box-office grosses are ahead of last year's all-time record. And the number of admissions is up about 10 percent.
According to cinema-industry analysts, people seek more out-of-home entertainment during economic hard times, and movies remain among the least expensive forms of out-of-home entertainment. During the past seven recession years, both box-office and admissions increased in five of them.
"People are staying home from vacation, so they are still searching for something they can do as a family," says Randy Roberts, a pop-culture historian at Purdue University in West Lafayette, Ind. Although ticket prices have jumped in many areas of the country, they are still cheaper, on average, than movie tickets in 1978, adjusted for inflation. The $2.34 average movie ticket then would cost $7.62 today, but the average ticket price for 2008 was $7.18.
Many trends are still progressing to improve the moviegoing experience, after fears in 2005 that movie theaters were going the way of the dinosaurs. Attendance had dropped for 18 straight weeks to the lowest in three decades.
Those trends include tiered stadium seating, digital sound and projection, online ticketing, reserved seating, valet parking, and on-site day care.
In addition, some chains are offering intermittent bargains for seniors and students.
"We need to provide something for the patron that is hurting in these economic times," says Greg Laemmle, president of Laemmle Theatres, which runs nine theaters in the Los Angeles area. The chain offers senior discounts on Wednesdays, a package of 25 vouchers for $150, and discount cards with 20 percent off for concessions. The chain has cut hours of operation and laid off staff to maintain profit margins.
"We may not have the biggest screens or most impressive sound, but you can come to movies here for half what they cost at other big chains around town," Mr. Laemmle says.
"Especially when $12 represents so much more of your hard-earned money, if you leave the theater feeling ripped off, you're never coming back," Mr. Dergarabedian says. One trend that has been accelerated during the current economic downturn is 3-D, he says, and high audience demand for it is evidence that recession audiences want more for their money.
Case in point is "Monsters vs Aliens," which was released on 7,000 screens nationwide about two months ago. Two thousand of the screens were 3-D, but they received 56 percent of the business.
"Audiences are telling us that if they pay only $3 extra for an enhanced experience, it's still worth it compared to theater, sports, and vacation," Dergarabedian says.
But no matter how elastic the demand is for movies, theater chains are not doing themselves a favor by charging as much as they are for tickets and concessions, others say.
"Movies used to be recession-proof because they were a cheap way to escape the perils of the day-to-day," says Tyler Barnett, a marketing analyst with Barnett Ellman. "For a nickel, you could be entertained for hours. Now, the cost of taking a family to the movies is absurd. After spending $50 in tickets, you have another $50 in concessions. I think movies will always be made, but we are not going to see an increase in theater sales unless prices for tickets are reduced."