Movie attendance is shrinking, whether studios want to admit it or not

From the November 18, 2005 issue of Entertainment Weekly comes this little tidbit buried away in a small text box on page 109: Exhibitor Relations states that overall movie theater attendance is down 8% in 2005. That's on top of an already widely reported - and widely disputed - account that box office grosses are down 6.1%.

There's been dozens of heated debates about whether or not box office grosses are truly down. Statistics can say just about anything you want them to say and this summer, some reporters seemed to have a lot of fun poking a stick at the Hollywood studios and their so-called "slump" (the string of many weeks in the spring and summer in which 2005 box office grosses each weekend failed to match their counterpart weekend from 2004). Those stories drew attacks from Hollywood insiders who claimed the numbers were misleading, which then drew counter-attacks. Blah blah blah. In a town where creative bookkeeping is artform, it's hard to know what's really going on in the exchange of money between exhibitors, distributors, and studios.

The Entertainment Weekly blurb notes also that thanks to a 2% increase in ticket prices this year (the average is now $6.34 per ticket) it now takes fewer moviegoers to spend the same amount of money as they did in 2004. Which means that about 102 million fewer tickets have been sold in 2005 when compared to 2004. That's a lot of people. Multiply 102 million times $6.34 and you get $646 million in lost revenue.

Even taking into account the fact that statistics can be twisted, these two facts (box office down, attendance down) may well suggest that the movie business is about to be in trouble. The evidence seems to be becoming less and less anecdotal and more impossible to ignore. People aren't going to the movies the way they used to. Whether it's because of bad movies, competition from the Internet and video games, or the growing phenomenon of thousand-dollar home theater systems, it's hard to say. Big branded event films can and will still draw huge crowds, whether it's a giant ape or a wizard named Harry, which is why Hollywood is more and more trying to turn every single movie into an "event" that has to be seen. Soon, though, there will be some real audience fatigue and smaller films will increasingly get lost in the shuffle.

We're at a brink of a huge transformation in the movie business. No one can say for sure where this is going, but the old days are over. Whether Hollywood likes it or not.

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