In my previous installment of this probing into the health of the movies in theaters business, we looked at two rudimentary charts that showed that, though the industry touts the fact that box office goes up each year (kind of like a public company report that wants to say all is rosy), we found that, in fact, in equal dollars, years bounce up and down all over the place, even as some have said in the past, somewhat counter-cyclical to the overall economy (SEE 2009). This was always touted as folks want to be entertained in bad times, so the movie business is good, or something along those lines, almost no matter what.
Along with that, though, we saw that there are two generally downward trends
Box Office rises and falls, but in real dollars, 2016, and the teetering/dancing 2017 box office look like we might be in a trend, a slow one, but a trend. Per capita spending of Americans on going to the movies is a decided downward trend.
More People, But They Are Each Spending Less By The Year
I also assembled a chart that looks at the trend of ticket buying illustrated alongside the Dollars per citizen. Now, I did not “adjust” the ticket buying numbers, but they show a real movement, a sharper decline in the consumer activity regarding box office attendance. There is no masking the fact of this set of numbers shown below. Fewer transactions each year, with a higher average ticket price can mask the general downward trend of movie ticket sales.
Continuing in another vein, and wanting to understand this phenomenon even further, as movie theater attendance is definitely seasonal, and tied to things like kids being out of school, holidays (somewhat the same, but for the whole populace, generally). Since the discussion of the third quarter of 2017 being kind of what set off this “freak-out” discussion in the trades and elsewhere, I decided to look quarter by quarter over the last fourteen years (again, 2003 through 2016). What would we find in that? I assembled all four quarters for each year, but that creates a very, very busy chart, which I may share later, but I think a more salient and rapidly understood initial chart is the one below. I charted here just the average quarterly box office for each of the years, to see if that would better help us understand how things are going.
You can see that the peaks and valleys still remain, relatively identical to the up and down of the box office total (as this can be gained by dividing each year by four) but what bears understanding is the beginning average quarter for the year of 2003 of $3.034 billion dollars, and the average quarter box office of 2016, which is $2.928 billion, a difference of $106 million per quarter, or a difference, in constant dollars of $424 million annual take by 2016. This is not a rise. It is not a plummet, either, but it is definitely no rise.
But, what about 2017, as well as we now know? What is going on there as far as the average quarterly box office take?
This bears up under looking at more granular data.
In the chart above, we see from 2010 through the first three quarters of 2017. 2017 would have skewed the other charts, but here we can see that, though there have been more than a handful of lower first quarter box office performances (in constant dollars) than that of 2017, the second quarter was middling bad, quite a bit below most others, besides Q2 2016, but middling bad. But here is where the train went off the rails, in Q3 (orange arrow), well below any other Q3 in the last seven years.
Now we know why some folks feel like their hair is on fire. Kind of big time. But exactly whose hair is on fire? And whose hair is on fire the most? I want to talk about that the next time, along with some ruminations about why I think that is.
END OF PART II
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What originally caused me to begin FilmProfit® was my noticing that the studios and big players had lots of folks to help them figure out how to make their films profitable. Indie producers were in a gunfight with rubber stage knives. I wanted to give them some weapons to begin to level the playing field a little. The things I do, whether for rump indies or mid-level players, or even the studios are meant to get down under the hood, not just numbers, although numbers tell a story, but to get at the functions, of moviegoers, exhibitors, distributors, and all the working parts of the industry, to help my clients see better what they are getting into and how to prepare for it.
Onward and Upward