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Movie theater revenue declines, may point to digital shift

updated 01:45 pm EST, Mon December 26, 2011

Hollywood may face cost of 3D, Internet in 2012

New estimates compiled by point to the movie industry facing a rare decline. Assuming the last week of the year reflects trends, movie theaters will have made $10.1 billion in 2011, or 4.5 percent less than in 2010. AllThingsD didn't glean explanations from the research.

The drop may have been a virtue of a lackluster movie season. While there were well-received movies, the season didn't encounter runaway successes as in past years, such as 2009's Avatar.

However, the slump might also have been affected by digital movies and the attitude towards 3D movies. Most 3D movies almost always carry a premium in theater over their 2D versions and have typically been promoted first, making a trip to the theater either more expensive or undesirable. Prices occasionally get close to the cost of buying a movie on DVD, iTunes, or even Blu-ray copies, increasing the incentive to wait for the home release.

Internet video is currently led by Netflix, where major movies usually come late. Much lower prices on Netflix, as well as access to new releases on services like iTunes and Vudu, has reduced the need to see a movie in theaters first.

Other forms of entertainment, also digital, might be dampening theater expectations. Games like Modern Warfare 3 beat Hollywood records, earning $400 million in one day and beating Avatar to $1 billion by one day, reaching the figure in 16 days. They're helped by much higher asking prices but also have much longer lifespans.

It remains too soon to tell if the movie industry fill follow the path of music, where a reluctance to encourage legitimate digital sources early on and clinging to the traditional promotion model have commonly been attributed to Internet music growing more slowly than CDs have declined. Theaters provide a very different business model, and studios have been more willing to adopt Internet sources early on.

by MacNN Staff



  1. facebook_John

    Via Facebook

    Joined: Dec 2011


    Maybe run away ticket prices

    More than $10 a ticket can rent a lot of videos. The movie industry makes lots of money with video sales and rentals. Maybe they should think about reducing Theatre ticket prices so people can afford to go see a movie.

  1. ruel24

    Joined: Dec 1969


    comment title

    Too expensive, and many theaters in my area are known for bedbugs. When Rave took over the Showcase cinema in my area, ticket prices for movies jumped $3. And they want me to actually go pay them to watch one? I'll wait for it on Redbox...

  1. chas_m



    All the year's best movies

    are actually just out NOW. Well maybe not ALL the best, but there's an incredible number of actually-good movies out just this month: Hugo, TinTin, The Artist, Midnight in Paris, the Descendants, Sherlock Holmes, War Horse, MI: Ghost Protocol (which I'm told is the one that's finally really good), My Week With Marilyn, Melancholia, The Muppets, Shame, The Iron Lady and Coriolanus -- all out in most cities just within the last few weeks!

    It's stupid of the studios to have lumped all the quality movies in such a short span, most of them won't do as well as they would have otherwise because there are simply too many to see in the few weeks they will be available in cinemas, particularly given current high cinema prices!

  1. gprovida

    Joined: Dec 1969


    Reluctant to adopt digital

    And make it painful to use. Try ordering a movie in the US for family in Scotland arrghh or buy a 1935 movie Midnight Star with William Powell and Ginger Rogers. I had to buy it in Italy and play on a Eurozone DVD player. Check out on where iTunes can provide app, music, movie, and TV service. Then compare revenue growth in apps, music, movies, and TV interesting correlation. In the meantime after the Blueray copy protection mess now ultraviolet mess is coming.

    Just time before the current models collapse with a defensive strategy to protect old model delaying and crippling adoption of new model. The industry is unable to realize it will be disrupted and do the disrupting itself.

  1. GreenMnM

    Joined: Dec 1969


    ticket price

    I agree with some of the others. I have specifically NOT gone to the theater because of the price. $15 to watch a movie and $13 for a medium soda and popcorn? I could buy the DVD or blu-ray disk for that. Sure, I don't have a movie theater screen at home and I'll have to wait six months, but it sure seems like a better deal to me.

  1. chefpastry

    Joined: Dec 1969


    Home is better

    My home is cleaner, more comfortable, has better food, better picture quality, and, most importantly, the ability to pause when I need to use the rest room!!

  1. xmattingly

    Joined: Dec 1969


    It's greed

    Maybe the greedy m#####f#####s ought to think about lowering ticket prices to get more meat in the seats. The chain in my area is constantly toying with prices, per venue and per time of day, and SURPRISE!-- most of the time their blockbuster showings are only half full.

  1. ClevelandAdv

    Joined: Dec 1969


    Movie theater revenue declines, may point to...

    ...$12 Popcorn and bad movies.

  1. LMGS

    Joined: Dec 1969



    Went to see Arthur Christmas with my son.. Went to the matinee, and it was over $20 just for tickets.. If it was 3D, it would have been $3 more... The kids deal with a small box of popcorn, small drink, and a bag of fruit snacks was $5... And on top of all that we had to sit through 20 minutes of ads, before the previews and the movie even started...

    I have a nice home theater at home, with a Panasonic front projector and Klipsch speakers... I hate the quality of streaming movies, but I may make the move to waiting for the the Blu-ray to show up at Redbox.. Then if it's a movie I want to own it would still be cheaper to buy than paying to see it at the theater...

  1. Grendelmon

    Joined: Dec 1969


    I know a few people who manage

    ...a theater here in the Twin Cities, and according to them they make their money on concessions, not the ticket sales. From my understanding, they about break even for their "license" to play the films, and then make their money on the overpriced popcorn and sodas.

    If this is correct, you don't have to purchase concessions to watch a movie, so blame the movie companies for forcing the theaters to charge what they do for tickets.

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