Huffpost Business
Ron Dicker Headshot

Movie Ticket Sales Slump: Theater Owners Try Booting Texters, Digital Upgrades, More Popcorn

Posted: Updated:
Print Article
SMURFS
Getty Images

During a nationwide 16-year low at the box office, Alamo Drafthouse theaters increased their sales by 2.6 percent. Tim League, CEO and founder of the Texas chain, credits a take-charge approach: His theaters threw out more than 100 moviegoers for talking on cellphones or texting because they distracted other viewers.

"It's one of the big factors that's turned people away from the movies," said League. "I think we've won back the 30- and 40-year-old clients that stopped going to the movies because it is so unpleasant."

A stale economy, rude patron behavior and competition from home entertainment battered the multiplex in 2011, but theater owners are ushering in the new year with optimism. In some cases, they're ignoring industry hand-wringing over current ticket sales at the country's 39,600 multiplex screens by looking ahead. Or they're questioning the downturn's real meaning.

Gerry Lopez, chief executive officer of AMC Theatres, touted his company's aggressive digital projection changeover, which will reach all 5,325 AMC screens by the end of this year.

"As we head into 2012, we've invested millions of dollars and introduced a number of game-changing initiatives to ensure guests who visit AMC Theatres are enjoying the best possible moviegoing experience," Lopez wrote in an email.

But as 2011 faded to black, the numbers still reflected a disconnect between movie houses and patrons. The Los Angeles Times reported ticket sales sagged by 3 percent last year, to $10.2 billion, and admissions dropped 4 percent, from 1.33 billion in 2010 to 1.28 billion in 2011. A record-setting summer take of $4.4 billion, fueled in part by Harry Potter and the Deathly Hallows: Part 2, could not make up for a nosedive in winter ticket sales.

To Patrick Corcoran, spokesman for the National Association of Theatre Owners, last year's decline was a blip in the big picture. The box office has increased every decade since the 1970s, and the trend should continue, he said.

Other industry observers take a dimmer view, fearing the digital revolution at home is cannibalizing the in-person cinema experience. Corcoran said that inexpensive streaming services such as Netflix have undermined in-cinema viewing.

Some, like movie critic Roger Ebert, have taken aim at ticket and concession prices.

"We still are the least expensive out-of-home entertainment," Corcoran snapped back. He cited a few statistics for good measure: The average ticket in 1971 cost $1.65, which is $9.22 today adjusted for inflation. Yet the average ticket today costs less than $8.

Whatever factors are to blame for the down year, the subject is clearly touchy among theater owners. Several declined comment. Regal, the nation's largest chain, didn't respond at all to phone messages.

While acknowledging that a clean, safe environment, crisp film projection and courteous service still matter, Corcoran emphasized that the allure of the movie theater hinges ultimately on what fans watch from the velvet seats. The cineplex's roller-coaster past year -- way down in the first quarter, up in the second and third quarters, and back down again in the fourth -- mirrored the quality of the releases, he said. "When the movies have been there, so has the audience. It's not as if movie theaters suddenly gave better service in the second or third quarter."

"I think people are overreacting a bit to the decline [last] year," Corcoran continued. "If you look through the year, the deficit came because we didn't have 'Avatar.'

That 2009 mega-blockbuster about blue beings from another world let the entire industry bask in its revenue glow, but the only blue beings that movie fans saw in 2011 were "The Smurfs."

Corcoran believes Hollywood should change its scheduling to release potential hits all year round. Superhero franchises virtually trip over each other in the summer, making it difficult for many of them to "have legs."

As for the price of popcorn, the trade group spokesman had an explanation slicker than hot butter: Higher snack costs keep the price of tickets down. Corcoran referred to a study by the Stanford Graduate School of Business and the University of California-Santa Cruz. Theaters retain all profits from concessions whereas they have to share ticket grosses, so chains seek to reap more revenue from such items as popcorn, according to the study.

"Even though nobody has to buy concessions, those who do are actually subsidizing a lower ticket price for everybody else," Corcoran said.

Around the Web

Movie ticket sales decline: Movie industry hits ticket sales decline on ...

2011 Saw Least Movie Tickets Sold Since 1995 | Moneyland | TIME ...

The Numbers - Movie Market Summary 1995 to 2011

I'll tell you why movie revenue is dropping... :: rogerebert.com ...

Movie ticket sales down half a billion dollars this year - WKOW 27 ...

Why Are Movie Ticket Sales Down 20 Percent This Year? - The ...

US theater owners get lump of coal at box office

A Year of Disappointment at the Movie Box Office