It is considered, at times, that with the steady decline of the U.S. and world economies the ticket sales in the film industry would rise in inverse proportions. This may have been understood, at one point, to be a relatively reliable fact. It only makes sense, considering this is not the first time this sort of situation has come about. During the Wall Street Crash of 1929 ticket sales went soaring, as it was considerably one of the cheapest forms of entertainment at the time. It has also been recognized that in the several other recessions in the last few decades that this fact has been proven true as well.
When a national economic crisis has your life in disarray and even in down right ruins, the last thing you need is to be enclosed in whatever home you are lucky enough to retain. With filmmaking only beginning its growth spurt in the earlier part of the 1900’s and continuing strong, the down and out Americans turn to cheap ticket prices at theaters to get out of the house, remove themselves from their daily realities, and immerse themselves vicariously into the controlled fictional lives of the characters on the silver screen.
Is this the same today?
The Celluloid Truth
Not necessarily. These days, with film budgets growing to unimaginable heights of hundreds of millions of dollars, it is a wonder the system continues to work. It’s simple economics, the higher the budget, the more money needed to be earned to break even. When a $300 million film, with its enormous CGI budget, hits the market, a lot has to be done to sustain its profitability. The marketing and advertising costs alone increase the cost of the film to even higher levels of absurdity. So how is all this money recuperated?
When the major studios are drained of their cash, and a recession looms, experience tells us that there is no concern because the film industry expands during this sort of market. Maybe this thought should be reconsidered.
Going Out to the Movies
The studios realize the loss in revenue and the added price of marketing, thus the studios take more, the distributors get less, and the exhibitors get even less, leading to higher ticket prices and exponentially high concession prices. So now reconsider the situation. Here is a recession-crippled economy, families losing their homes and jobs, bailouts, war, a general lack of sustainability, not to mention a global climate crisis hovering above us, and there is still an expectancy of film market growth?
This is no longer the time of cheap dollar movies, this is the era of gross profits. Picture a family of four going to a movie, everyone excited to see the latest film adorning the marquee, until the realization of costs kicks in. Here’s the tally: $12-$15 in tickets per ticket, easily $20-$40 in concession, and depending on the city, two hour parking costs. Now you have yourself an evening that could cost $200 dollars before leaving the theater. That does not sound like recession priced tickets.
So now say that the two parents have decided to leave the kids at home. The prices stay the same, minus two tickets and two sodas/candy, but now include the cost of a babysitter, and we’re right back to where we were.
So Where Does That Leave the Film Industry?
If there's one thing that is always reliable about the film industry is that it is never reliable. The entire operation is one of a balance of luck, business savvy, and chaos. What works one day may not work the next, despite equal circumstances.
The economy has spoken and the shocks have been felt far and wide, especially by all the aspiring independent filmmakers and student filmmakers, who have freshly arrived in a market where only the whales play. The fact is, there are less films being made, and even less films being distributed and it is high time the film industry adapted to the changing environment.
Could DVDs or the World Wide Web help pull Hollywood up by its bootstraps?
Kaniel Loughran - I am the managing member of The Loughran Consulting Group based in NYC. While information generally comes at a cost, I believe some ...
