A very interesting new report at the Wall Street Journal has thrown a
huge assumption from 2009 in the face of itself. If you'll remember,
many entertainment analysts said that consumers could be spending more
time in front of the television (instead of at the box office) during
2009 as they struggled to curtail entertainment spending in the face of
the recession. It all made sense--consumers looking to cut back would
be likely to stay at home on a Friday night and watch something on ABC
instead of shelling out $15 per ticket (in large cities, anyway) at the
In fact, that's exactly what didn't happen. 2009 marked the first year
since 2002 that U.S. consumers spent more money buying movie tickets at
the theater than they did to watch movies at home. $9.87b was spent at
the cinema (a 10% increase over 2008), while sales of DVDs sank 13% to
$8.73b. Now analysts are suggesting that shifting trends in the way
consumers engage and consume media are to blame/thank, and movie
studios are scrambling to alter their business models to compensate.
Without a doubt, the massive success of Netflix
which offer extremely cheap rental rates of new and old movie
releases--has had something to do with this. What evidently happened
was that instead of cutting out the cinema in '09, consumers simply cut
their spending on those massive DVD collections. They decided to rent
instead, and that's definitely hurting the bottom line of the studio.
Now, those same studios are looking to at-home rental options that
generally charge a bit more in order to get movies in front of faces
faster. Call it the "instant gratification premium."
And with boxes like the Apple TV, Vudu and Roku getting hotter by the
day, we're not surprised to see studios moving in this direction. It's
clear that downloadable media is the future, and it already has a place
in the lives of those on the cutting edge of technology. Broadband
connections in the U.S. still need to get a touch faster overall before
it's more commercially viable, but we're certain that'll come in due
time. What about you? Did you spend more or less at the cinema in '09?
Did you spend more or less on at-home entertainment compared to '08?