Results question the need for Hollywood and theatre operators to rethink current economic models
The global decline in movie theatre attendance is not a result of unappealing content, but rather reflects a dissatisfaction with the movie-going experience and increasing competition for the consumer’s share of time and money, according to a global survey of consumers conducted by PA Consulting Group and the Motion Pictures Association of America. The survey also revealed that while consumer-spending habits will not undergo any fundamental changes over the next five years, movie attendance and home entertainment sales, including the sales of DVDs, will decline as entertainment options increase.
This survey, which was completed by 2,028 respondents who filled out structured questionnaires in the presence of a poll-taker in seven American and three European cities, aimed to identify causal factors leading to declines in theatrical movie attendance, DVD rentals and sales, and other forms of filmed entertainment. Unlike the majority of surveys, which attempt to link the perception of the content Hollywood is releasing to movie ticket sales, this survey sought to uncover how Hollywood’s ‘share of wallet’ compares to other forms of leisure and entertainment. It also looked at other factors which are influencing the decline in theatre attendance, irrespective of content.
According to the survey, 83% of those who responded stated that they are at least content with the overall quality and substance of the films being distributed by the studios, a notion that runs contrary to the predominant mindset of many in Hollywood. Furthermore, 73% of respondents in the US and 68% in Europe plan to spend the same amount of time going to the movies. Despite this affirmation of the quality of the product Hollywood is releasing, 60% of those surveyed who stated that they spend 'very much' of their income on movies plan on decreasing their consumption.
The survey exposed several factors that consumers view as contributors to the decline in movie theatre attendance. For example, 86% of all respondents stated that they would attend a movie at a theatre if ticket prices were reduced substantially. Furthermore, 62% of all respondents indicated that they would be more likely to attend a movie if they had the option of reserved seating. Additionally, 63% said they would be more likely to attend a movie if outside food were available beyond popcorn and traditional movie theatre fare.
“This research reveals that Hollywood should reconsider how the movie-going experience is sold to the consumer,” said Mike Hunter, a member of PA Consulting Group’s management team. “We may be at a time when going to the movies should be more than just buying a ticket, purchasing an item from concessions, watching a film, and then going home. We may be entering an era where consumers want the movie-going experience to be more of an event rather than an occurrence.”
When asked what drives them to attend a movie in the theatre, the survey’s findings show that people are mainly influenced by the content of the film (93%), followed by the opinions of friends and family (90%), the cost of the ticket (87%), the appearance of highly recognisable movie stars (82%), movie reviews (79%) and box office results (78%)
While theatre attendance is expected to decrease over the next five years, studios can expect to see mixed results from another revenue stream, that of DVD rentals and sales. Generally, consumers intend to continue their past and current allocation of income to DVD rentals and purchases. However, among those who spend a significant amount of money on DVD rentals and sales, 66% and 58%, respectively, plan on reducing their spend.
While the results of the survey indicated that the amount spent on DVD rentals and sales will be flat, the same cannot be said if the prices of DVD rentals were to increase. In the event that the price of DVD rentals was to increase, 77% of those interviewed said that they would be more likely to watch a movie in the theatre rather than rent.
According to Mr. Hunter, “In order for it to maintain sustainable growth, the entertainment industry must take a long look at how consumers are balancing their lives. Survey respondents have shown that they intend to increase the time spent on socialising, using the Internet and participating in other leisure activities aside from going to the movies and watching DVDs and TV.” He added: “The only categories surveyed where results were flat were in those pertaining to movie attendance and watching DVDs and TV. Therefore it is imperative for Hollywood to find alternative channels that play to the changing lifestyles and work/life balance of its customers.”
The results of the survey was revealed during an executive breakfast forum co-sponsored by the Motion Pictures Association of America (MPAA) and featuring guest speakers Mike Arrieta, Senior Vice President, Digital, Sony Pictures Entertainment and Dean Garfield, Executive Vice President of Business Development at the MPAA.
Methodology
In an attempt to mitigate the inherent biases of surveys conducted online, PA Consulting Group conducted face to face interviews with respondents over a six-week period in seven cities in the US (Boston, Denver, Houston, Los Angeles, New York, and Washington DC) and three European cities (Copenhagen, Frankfurt, and London).
Passers-by on the street were asked questions from a structured questionnaire which included multiple choice, close-ended questions. Responses to the survey were gathered near a movie theatre, though not directly either in front of one, or in a shopping mall. Survey respondents were not asked whether they were heading to or coming from a theatre.
The questionnaire featured multiple-choice, closed questions, with the option of asking follow-up questions, which were noted on the questionnaire. Completed questionnaires were returned to PA for analysis.
