Box Office Meltdown

Matthew Milko

Movie Theaters 1896 – First Movie Theater – Vitascope Hall

in New Orleans, Louisiana

Movie Theaters 1957 – First North American Theater with 2 screens –

The Elgin Theater in Ottawa, Canada

Movie Theaters 1963 – AMC Theaters creates first Multiplex

Movie Theaters 1995 – First Megaplex (18 or more screens) in United

States is opened by AMC in Dallas, TX

How do Theaters make money? A movie theater will split the gross ticket

revenue 50/50 with the Movie Studio. Some studios demand 70-90% of the Ticket Sales.

Concession Stands – Popcorn, Coke, Candy, etc.

Movie Theatres depend on high ticket sales in order to make money.

Why do People go to the Movies?

Movie Theatre Experience Event (Family, Dating, Friends, etc.) Large Audience Large Screen Comfortable Seats Popcorn/Candy High Quality sound system

Why do People go to the Movies?

Why do People go to the Movies?

Why the Low Ticket Sales? 2005 – Largest box office drop in Two Decades

$9.4 billion down to $8.9 billion From 2002-2006 there was a 14.6% decrease in

ticket sales 2000-01 – 6% drop in attendance put many

theatre chains in bankruptcy.

Why the Low Ticket Sales? High Ticket Prices ($8 or higher at night) High Concession Prices (Lg. Popcorn and Lg. Coke ~ $9 Increased minutes in Advertisements and Previews (15-20min

before Feature Presentation) Growing use of Cell Phones Talking Over seating Problems with Audio or Projector Bad Seats Film Quality Declining

Why the Low Ticket Sales? Short Term Profitability in Exchange for

Alienating Core Audience

Improved Home Theater Viewing Lower prices in Hi-Def Widescreen/Flatscreen

TV’s Lower Prices in High Quality Sound Systems Private of own home Netflix and Blockbuster Online feed DVD’s to

Home Theatres

Improved Home Theater Viewing

Improved Home Theater Viewing

Improved Home Theater Viewing Window between Movie Theatre release of a

Movie to DVD Release is decreasing Used to be 6 months Now Usually around 4 months Children Movies – 3 months Less Time in Theater = Less Money

Solutions? Lower Ticket Prices Extend Matinee (afternoon hours) Lower Concession Prices Assigned Seating Ban Cell Phones Improve Quality of Films

Box Office Meltdown Movie Theatres and Movie Studios must work

together to raise Movie Attendance. If not, Movie Theaters will go out of business

and Movie Studios will have to restructure their whole business plan.

Box Office Meltdown 1940’s – 60% of population went to the movies Today – 9% of Population

Box Office Meltdown http://en.wikipedia.org/wiki/Movie_theatres www.slate.com http://www.thehilltoponline.com http://www.thebigpicture.com http://www.imdb.com http://www.boxoffice.com