We’ve been saying for weeks, nay months, that movie ticket sales should not be increasing as the financial crisis rages on, particularly when there are cheaper alternatives available via the Internet. Finally, someone agrees with us. It’s the LA Times.
So memo to subscribers: You might want to make sure you’ve got some cash saved up because the box-office may be up now, but it won’t be for long. And we hate to even say this given SAG’s precarious strike situation, but union members might want to look into how much they get from digital downloads and online streaming.
LA Times: For decades, entertainment executives have boasted that Hollywood is “recession-proof.” No matter how dire the economy, the argument goes, consumers will always be willing to spend on entertainment to escape.
Studio executives note that during the Great Depression, when more than a quarter of the country was out of work, people still scraped together dimes to see the latest motion picture. In subsequent economic slumps, consumers spent freely on new technology, expanded their home video libraries and, most recently, invested $1,000 or more on high-definition, big-screen TVs.
This time, however, past may not be prologue. Unlike the rudimentary entertainment economy of 75 years ago, when the downtown Bijou was about the only diversion, consumers now have a near-limitless array of entertainment options to occupy their leisure time…
Blame the Internet. With faster processors, improved technology to compress video and more than 60 million homes in the U.S. with high-speed connections, the computer seamlessly delivers full-length episodes of television shows and movies. As a result, the computer now vies with the TV and cinema as the go-to screen for entertainment…
The endless stream of free content, through legitimate services as well as pirate sites, appears to be shifting viewing habits more quickly than industry executives had anticipated — or intended. That creates a dilemma for media companies because the Internet generates substantially lower revenue than established business models — 30-second TV commercials and home video sales — which have long supported the costly economics of TV shows and movies. That’s not Hollywood’s only problem…
The wild card is the length and depth of the downturn. No one knows how bad things will get.
Although cinema attendance increased during five of the last seven recessions, a closer examination of movie box office receipts during the Great Depression seems at odds with Hollywood’s conventional wisdom. Attendance soared in 1929 and 1930, after the advent of “talkies,” but the novelty appears to have worn off amid hard times. By 1932, ticket sales had plunged and did not recover until 1940, just before World War II.
Photo from Wired
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