Have Americans REALLY stopped going to the movies?
This week’s headlines (see screenshot above, and here’s the article) gave the impression that movie attendance has collapsed in North America, and that the internet, Netflix and millennials were to blame. The number of people who went to a movie theatre in North America in 2014 was the lowest it has been in 20 years: that is true. But just how brutal a ‘collapse’ was it?
As you can see from the chart above, the number of US movie tickets sold annually varies a bit year over year, depending largely on the economy and the slate of titles available that year: movies ARE a popularity contest. But instead of freaking out about the 2014 decline, it is much more accurate to say that while it was a weak year, it falls within (albeit at the low end) the historical range of 1.2-1.6 billion tickets per year. No dramatic collapse that I can see.
As the next chart shows, there is even a positive way of seeing it when we look at both admissions and revenues. Total movie box office dollars have gone from under US$6 billion in 1995 to over $10 billion in 2014. Yahoo – that is a growth industry!
Not so fast: the value of a dollar changes over time, and I recalculated. In the chart above, all revenues are now re-stated in constant 1995 dollars. As you can see, looked at this way, revenues grew quickly until 2002, and have been declining since then. Not quickly, and the 2014 figure is still nicely up from 1995. Higher ticket prices and 3D movies, almost certainly.
But we need to back up a second. Although the number of tickets sold in 2014 was flat with 1995, there are more Americans too. We need to adjust our numbers again, and look at the per capita purchases of movie tickets, and only for Americans over the age of two, since kids younger than that get in free or don’t go at all. As the chart above shows, the picture for moving pictures is suddenly less positive: Americans used to buy nearly five movie tickets per person per year, and that is down to about four. Even so, that is a pretty gradual decline, and hardly ‘brutal.’
The last chart above puts it all together, and is really the most useful way of examining the industry and discerning the long term trends. We now show the box office revenues in constant dollars and adjusted for population. It’s not the most exciting pattern I have ever seen, but it is (yet again) not terrible. In 1995, Americans spent a little over $20 per year attending movies in theatres. That rose to just a shade under $28 in constant dollars by 2002 (which was a banner year: Spiderman, a Lord of the Rings movie, a Harry Potter movie and a Star Wars flick!) and has since declined back to just over $21 in 2014. That is quite a stable range for 20 years of consumer spending on any given medium.
Three final thoughts:
That’s not brutal – this is brutal: if we compare the numbers (properly analysed, adjusted for population and inflation) we can see that movie theatre attendance is in a range, not free fall. For a traditional medium, that is a heck of a lot better than CD sales, DVD sales, movie rental stores, newspapers, magazines, and so on. I don’t think a movie theatre owner would be ‘Trading Places’ with any of those!
I’ve got a bad feeling about this too. The decline isn’t brutal, and it’s not the end of the world. But the trend is fairly clear from 2002 on: the internet and things like piracy and Netflix aren’t positives for movie attendance. I think it would be reasonable to expect that the per capita attendance of movies is likely to continue to decline slowly, and that per capita spending in annual constant dollars may continue to be under pressure. Don’t get me wrong: there could still be years with very strong slates, but the overall trend seems slightly down.
Won’t somebody please think of the teenagers? When we talk about changing media habits for traditional media, the assumption is that millennials have stopped paying entirely, and the medium is being propped up by older generations. What about movie attendance? False: while the population as a whole went to about four movies per year in 2014, those 12-24 (which aren’t quite the definition of millennials, but we have to work with the data we are given!) went to about 7.1 movies each. That’s down from last year, but it is interesting to note that younger consumers still over-index on attending movies.
For data geeks only. My figures are for the US box office only, and are from The-Numbers.com. The figures that most of the articles written this week were based on are from the Motion Picture Association of America and are North American stats, and include Canada. Which is fine, but calculating per capita and constant dollar numbers for combined US & Canada stats would have been too hard, so I used the USA only data.
[Edited to add: This post might be seen as an attack on the journalists who are writing the stories (to deadline!) on the attendance figures. In all fairness, journalists have two problems with this kind of story.
1) The headlines about ‘brutal declines’ get WAY more clicks than my kind of analysis. This isn’t new or related to the internet: journalism has ALWAYS been “if it bleeds, it leads.”
2) They have deadlines. And reporting a year over year decline is fast. Finding the 20 year data, rebasing it for constant dollar and population growth takes time. I spent about two hours doing the data analysis for my post. Very few editors would stand around waiting for their reporters to do the same!]