Why No One is Going to the Movies

05/25/2011 11:45 am ET

So Hollywood is getting anxious about the fact that no one is coming to see its movies, according to Sharon Waxman in today's Times. But no one is quite sure why, or if the decline is real.

I suspect it is, and here's why.

In the short run, because movies have sucked lately. For example: "The Amityville Horror," "Sahara," "A Lot Like Love," "Fever Pitch," XXX: State of the Union...." (And as for "Kingdom of Heaven"—in this case, Chris Rock was right; Orlando Bloom is no leading man. He's an elf.)

No one's going to rush to the theaters for Miss Congeniality II. By contrast, television has actually gotten better in the last year or so. And if there's no good regular programming to watch, it's easy enough to order a movie on demand.

In the long run, more important is something I'll call customized entertainment. (And this pertains to yesterday's discussion of iPods as well.)

As the public entertainment experience gets increasingly expensive and unpleasant, and the private, customized experience gets better and cheaper, more people are, um, entertaining themselves. Here in New York City, tickets purchased online now cost about $12. (Rather than discounting your ticket for an online purchase, as even the airlines do, the movie theaters actually charge you about 15% more.) Concessions can easily add another $10. The same price will buy you two months of Netflix. Just like the record companies did, this is a business acting as if it has an endless monopoly.

True, there's an old-fashioned appeal to seeing a movie in a theater. But Hollywood shouldn't take this for granted; mass behavior can paradigm-shift. And the appeal has decreased as the experience has become more unpleasant—lousy seating, crying babies, fifteen minutes of ads before the movie starts....

Americans are currently paying more than they've ever paid for the price of their homes. With Hollywood and movie theaters treating consumers with contempt, is it any wonder that they're choosing to stay in them?