Hollywood just celebrated its biggest year ever. With an estimated $5.24 billion in North American ticket sales in 1993, the movie business seems to be booming. But some in the industry are worried about its future.
U.S. ticket sales have remained flat for the last 20 years or so. Theatrical grosses keep going up because ticket prices keep increasing. This year's record box office owes more than a little to the fact that this year's average ticket price of $5.05 was also a record high. Indeed, if one takes out the sales of one movie--Jurassic Park--1993 doesn't seem like a terribly good year for the theatrical-film industry.
It is too soon to proclaim the death of film. But a convergence of technological changes and economic forces is presenting the greatest threat to cinema-going since the introduction of television in the late 1940s.
Since the 1960s, the core of the movie-going audience has been young people, particularly young men, ages 13 to 25. But that is changing. As late as 1983, according to Motion Picture Association of Am-erica figures, young people accounted for 55 percent of all movie tickets sold. That was way above their proportion of the population. But by 1992, the latest year for which figures are available, young people accounted for just 38 percent of all tickets sold, while their proportion of the population had shrunk only slightly.
A problem for the movie industry? You bet.
Historically, people go out to movies less and less frequently as they grow older. That's still happening, though older baby boomers aren't cutting their movie attendance as much as their parents did. The fact that today's youth don't go to the movies that much bodes ill for the future of Hollywood. In effect, they are the first generation of Americans who don't participate in the tribal ritual of going to the movies on most weekends.
These young people have been lost largely to video games and videotape rentals. The movies have, in effect, priced themselves out of competition for teen-age dollars.
Video games are now a $7-billion industry. The main consumers of video games are the young males so coveted by the movie industry. And one of the big attractions of video games is the price. The cost of admission to a feature film that will probably last about two hours can range from about $4.00 to $7.50. But for well under half that amount, a person can rent a video game cartridge for a whole day. This is an important consideration for young people with their relatively small disposable incomes.
Price is also the advantage of videotapes. Again, young people make up the biggest segment of the videotape market. If a group of five young people wants to see a film, it would cost them about $25 to see it in a theater. But it would cost no more than $3.00 to rent it on videotape.
Virtually all theatrical films now become available on videotape about six months after their initial release. Since people know that they can eventually see just about any film on video, they are becoming pickier about what they will see in a theater. If a film doesn't have spectacular effects like those in Jurassic Park or The Fugitive, or some other elements that are best appreciated on the big screen, people will likely opt to wait for the film to appear in the cheaper medium of video. These factors have helped push video rentals and sales to $11 billion a year, more than twice the dollar amount of theatrical ticket sales.
And even if people have to see a film on the big screen, they are increasingly choosing to wait until a film appears at a second-run theater, where tickets usually cost about half what they do in regular theaters. Ticket sales for these venues have about doubled over the last decade, according to some industry analysts.
The prognosis for theatrical films seems to be dim. The coming information superhighway, with its linking of computers and television, cable and telephones, and entertainment and information poses a threat in several different ways.
First of all, it will, probably within a few years, make available true video on demand. In the best possible scenario for film, pay per view simply displaces video rentals. The market for theatrical film is unaffected, and studios can cut out the middleman and actually collect those rental dollars themselves.
But that isn't likely. As it becomes even easier to see any movie or episode of any television series one wants without ever leaving the house, people will likely choose to see more of their entertainment at home. Indeed, advances in high-definition television will reduce one of theater's big advantages over home viewing by making it possible for people to have wall-sized televisions screens with motion-picture quality images. This will certainly hurt the theater business, though it is difficult to predict to what degree.
Perhaps even more ominous are the future generations of video games that can be delivered into the viewer's home. In the very near future, cable systems will deliver into homes games whose advanced graphics and scripts will make today's games look like toy logs. These more interesting games will probably tempt people away from theaters. But more important, children weaned on this interactive form of entertainment may never develop the taste for the traditional linear narrative of film. Why would someone want to watch a film about Indiana Jones when he can be Indiana Jones within the confines of a very realistic and unpredictable game?