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Last week the New York Times did pieces on the current state of the movie rental market and the state of movie going. Both thought-provoking articles offer views of the challenges industries built before the age of the Internet are facing.

Take 1: The movie theatres will host almost 12 percent fewer moviegoers this year than last year. The decline has been steady with fewer total moviegoers this year than in 2001 (pre-September 11). Some experts offer the lack of quality movies as the primary cause for the decline.

Others, including Robert Iger of Disney, offer a more chilling perspective: €œWe can't allow tradition to stand in the way of where the consumer can go, or wants to go. The music industry learned this the hard way." An ex-Warner Brothers executive said, "It's the flat-panel television and the sound system, with the DVD option, that has radically changed the quality of the in-home experience. The home theater has arrived . . . you have to change the business model of the movie business."

Take 2: The movie rental business is also being turned upside down. According to Adams Media Research, there were nearly 3.2 billion rental transactions last year, DVD sales totaled about 1.1 billion, and there were 350 million purchases of movies through video on demand or pay per view. Blockbuster Online hopes to double its subscriber base from one million to two million by Q1 2006, chasing Netflix€™s subscriber base of 3.2 million. Add in the aggressive marketing by Comcast Cable offering video on demand and you get a picture of the consumer adjusting if not radically changing their movie watching habits.

Take 3: Technology is altering the power structure of the movie business. With the advent of the home theatre €" be it on a 60-inch plasma TV with surround sound or a more modest 32-inch Sony with a stereo speakers €" it is increasingly more convenient, more enjoyable and less expensive to sit in the comfort of one€™s own home than to trek out to the local movie theatre and drop 10 bucks a ticket and 6 bucks on popcorn and soda. Increasingly, the consumer is in control, able to trade one venue (the home theatre) against another (the movie theatre); one format (film) against another (digital); and one experience (watching in public) against another (watching in private).

Just another industry that might want to wish away the Internet.

This Post Has 3 Comments

  1. Robert Iger's quote, while encouraging in its acknowledgement of the abilities of the Internet and new mediums, is also somewhat depressing. Instead of writing off the theater as a lost cause and seeing home movie viewing as the future, I'd be more interested in a compromise….

    There are definitely some demographics that are much more prone to view a movie at home (parents with small children, for example), but I don't believe this is true for all demographics. Others are always looking for affordable ways to get out of the house (teenagers?).

    As an avid movie-goer myself, I would LOVE to see a situation where I could pay a monthly membership fee (30 dollars or so) to get unlimited viewing access at a movie theater… They'd be making more money off of me than they do now, but I'd be far more likely to pay 30 dollar a month with that deal than I would in individual movie viewings.

    They could even continue to overcharge me at the concession stand. I wouldn't complain, though I think that's also just getting a bit greedy.

  2. how about an annula movie pass – any theatre any time. now if you caught confiscate cell phones and pagers at the door, perhaps it would be a better experience all around.

  3. Yeah, annual would work well, too. People may be less prone to purchase it, though, as it would cost a lot more up front. A smaller monthly charge is easier for most people to determine how it fits into their finances.

    I've seen some theaters where they do something that basically nulls out your signal on your cell phone when you're in the theater… that works for me. If someone wants a call, they just have to step outside and talk.

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