• by Wayne Friedman , Staff Writer, January 22, 2020

The premium video business is still in its nascent stage. Yet, many believe the streaming business will continue to have a major effect on the legacy theatrical film business -- including longtime distributors.

Then we have dollars and cents to consider.

In 2019, U.S. domestic attendance for theatrical movies was down 4.6% to 1.24 billion, according to the National Association of Theater Owners. At the same time, prices were up 4% (36 cents) to $9.37.

That last number may be key for future consumers. Not all of them, but a increasingly significant number. Older consumers who feel less engaged or addressed, or perhaps young consumers who prefer to look at another smaller screen.

Analysts now worry the average  $10 price per movie is getting to a consumer-sensitive level. Whereas, premium subscription services are cheaper. Netflix's basic plan is $8.99, Disney+ is $6.99 and Apple TV+ is $4.99.

Last year, U.S. domestic box-office revenue was down 4% to $11.4 billion. But don’t worry, say other experts; it was the second best on record.

Cutting back on theatrical movies has its issues. You won't be able to see the latest “Avengers” movie — should they ever make another edition — or “Star Wars” on those big screens.

That said, you might also miss “The Irishman” and “Marriage Story”  -- both Oscar contenders for best film of the year. Both are now at Netflix after a limited big screen release.

But increasingly, there is something else to consider: supply and demand. There is skyrocketing TV, movie and other entertainment content. Consumers are already complaining they can’t see all the content that interests them.

Media consumption is at an all-time high. Many believe we are at saturation levels. So, what gets cut back? Traditionally delivered TV shows, original streaming TV and movies, video gaming, social media — or theatrical movies?

Looking globally, movies studios don’t currently have a lot of worries. Worldwide box-office revenue posted a record $42.5 billion in 2019, up slightly from the year before, when it was at just over $41 billion, according to Comscore.

Still, U.S. theatrical movie traffic has seen a general decline in attendance over the last several years. But this isn’t new. You might point to a similar metric in the traditional TV space -- slipping overall viewership, as well as weakening national ad revenue.

Yet, given digital media expectations, with the emphasis on a key descriptive -- “direct-to-consumer” business -- it's worth asking: Who is going to be “directly” affected?  It may be theater owners and local TV stations that feel the pinch.