Things May Change, but Movies Will Survive

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Watching Hollywood try figuring out why more people aren’t going to the movies has gotten to be interesting sport.


For months, the possible explanations have been torn apart urgently and incessantly. Are younger moviegoers being pulled by the Internet, iPods and video games? Is too much attention paid to teenage boys? To teenage girls? Are DVDs just too convenient, and are multiplexes too expensive, crowded and dirty? And there are the movies themselves: Are more folks staying home because there’s simply not very much to see?


This being the age of information, there’s more than enough data to support all of the above and that’s hardly a help. Nor is the jabbering about a shifting media landscape, where the old conventions that is, the ones from five years ago are dead and buried.


Well, yes, things are changing, but perhaps not that quickly or dramatically. Let’s break it down:



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The Movies: Box office revenues have been down almost 5 percent this year. The summer was a disaster. A recent study found that only 35 percent of men under 25 thought there was an “excellent selection” in movie choices, down from 60 percent two years ago. OK, we get the idea tough times in Tinseltown.


But it’s never a good idea to draw too many conclusions about such a crazy business. What mostly separates this year from last is that it didn’t have “Passion of the Christ” ($370 million), “Shrek 2” ($445 million) and “Spider-Man” ($373 million). At least so far the fourth-quarter schedule includes “Harry Potter & the Goblet of Fire” and “King Kong,” and Harris Nesbitt analyst Jeffrey Logsdon expects the October-December period to actually be up 1.6 percent from a year ago. Already, there are signs that the slump has stabilized, and if nothing else, 2006 should look good because the year-earlier comparisons will be easy to beat.


Hollywood isn’t going anywhere. The business lives for its boom-and-bust mentality, a point underscored by several Wall Street analysts who have raised their ratings for two major theater chains, Regal Entertainment Group and Carmike Cinemas Inc.



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The Competition: Apple Computer Inc. has a way of capturing the attention of gadget-hungry consumers with its ingenious iPod line and now there is the video version, which has been getting mostly rave reviews from the techno-critics, especially for its sharp, smear-less picture. Clearly, it’s the holiday gift of 2005 (expect shortages early), but even the most optimistic forecasters consider it a niche player for at least a few years (Apple’s Steve Jobs himself predicted that it will never be as popular as music).


Changing leisure-time habits takes awhile. Video games took a while to become big business and the gyrating dot-com world is still littered with hits and misses. The movies, meanwhile, keep chugging along. In 1998, moviegoers aged 14-24 made, on average, 10.6 trips to the multiplex, according to a study by Val Morgan & Co. In 2004, it was 9.8. Among the 35-49 crowd, the difference was slighter 6.6 to 6.5. That’s with iPods, DVDs and the rest.



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The Outlook: It’s not hard to see where things could be headed. Feature films will be divided into three types: the independent “classy” picture, the big-budget “event” picture and everything else. The first two will fare just fine in theatrical release because there continue to be reliable audiences for both (consider the lines waiting to see “Goodnight and Good Luck” and “Spider-Man 2”). These are people who still consider going to the movies a big deal. The caveat: theater owners must provide ArcLight-type facilities (plush seating, top-notch equipment, lots of amenities) that make the experience worth getting in the car.


As for the rest, expect the studios to consider multiple distribution channels, as Disney Chief Executive Robert Iger has correctly suggested. You can have a ho-hum thriller something like “The Interpreter” come out on DVD, cable, satellite and at the movie house all at the same time. Perhaps a shortened version would be made available for podcast, as well as a video game version.


This is an evolving use of new consumer technologies and the state-of-the-art streams they offer and if you go back 100 years, it’s not that new a concept. In Hollywood, as always, only the names change the faces stay the same.



*Mark Lacter is editor of the Business Journal. He can be heard every Tuesday morning at 6:55 and 9:55 on KPCC-FM (89.3).

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