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.