retail news in context, analysis with attitude

by Kevin Coupe

Yesterday this this space, MNB took note of a Variety story saying that "the number of frequent moviegoers in the all-important 18-24 age group plunged an unprecedented 21% in 2013, according to MPAA annual statistics released Tuesday … while attendance in the 12-17 age bracket also saw a precipitous drop off, falling almost 15%." The story concludes that formerly frequent moviegoers "from 12-24 are likely spending much of their previous moviegoing time watching a variety of other screens."

I commented that "this is the kind of story to which every business needs to pay attention, since it reflects a broader demographic trend - young people who used to be committed to a certain kind of behavior, on which an entire industry depended, changing that behavior in ways that cannot help but change that industry.

"In this case, we're talking about the movie business. But there's no reason to think that pretty much any other industry would not be vulnerable to the same kinds of seismic shifts."

Well, now Time has a story about a report issued by the Motion Picture Association of America saying that "domestic movie box-office sales rose to $10.9 billion last year, from $10.8 billion in 2012, but that the increase was due to higher ticket prices, not increased attendance. In fact, the number of tickets sold slipped 1.5% to 1.34 billion from 1.36 billion in the past year. The average ticket price nationwide was $8.13 last year, up from $7.96 in 2012 (the average includes lower-priced matinee tickets)."

And the suggestion is that this is untenable … a conclusion with which at least some MNB readers would agree.

After yesterday's Eye-Opener, I got a number of emails from readers along the same lines…here are some examples…

• I am 23 will be 24 in April. I can tell you without a doubt this has NOTHING to do with screens and quality of film content. The price to see a movie goes up every time, it is ridiculous.

• Funny, price is never mentioned. Perhaps theaters are overpriced, especially for a demographic with high unemployment and low earning potential.

Now, I thought all of this was interesting.

Living where I live, I pay a lot more to go to the movies than these "average ticket prices." I'll plop down $12.50 (or more if I'm seeking a movie in IMAX or 3-D) to go to the terrific AMC theaters about ten miles away, or $10 to go to the local art house cinema where they show foreign and independent movies.

This is, however, a lesson in value.

I rarely think that $12.50 for a movie is too expensive if I like the movie. After all, that works out to about six bucks an hour or less to be entertained. Compare that, for example, to the cost of a Broadway show. Or going out to dinner at a decent restaurant. Or going to a ballgame. By those standards, going to a movie is a bargain.

I also never buy food and drink from the concessions, which are pricey. I try not to eat candy and popcorn, so it works out both from an economic and nutritional perspective.

While a lot of theaters aren't doing enough to create a compelling experience that compares positively to all the other options that young audiences have, I continue to believe that the biggest problem with the movie business is the fact that studios spend way too much time producing $250 million extravaganzas without coherent plots or decent acting performances … an approach that can alienate older audiences that actually have an allegiance to the traditional moviegoing experience.

But as the emails yesterday clearly pointed out, value is a matter of perception.

That's a lesson with which the movie business obviously is struggling. They're not alone.

I meet with retailers all the time where, when discussing the battle between bricks-and-mortar businesses and e-commerce entities, say how much they depend on people "who will continue to want to come to the store." But that dependence only will go so far as those stores are able to differentiate themselves and define their value and values in the minds of their shoppers.

It is an Eye-Opener.
KC's View: