Movie theater companies didn’t see it coming. It's a bit like a horror movie, where shadowy figures are jumping out of dark alleys at the same time.
There are 40,000-plus U.S. screens -- up 13% since 2000. All the while, U.S./Canada cinema attendance per capita has sunk from a 5.0 rate in the early 2000s to under 3.5 versus, according to Cross Screen Media data.
Total admissions were at 1.24 billion in 2019. The Motion Picture Association says in 2020, only 3% of the U.S./Canada population (12 million) were frequent moviegoers -- those going at least once a month.
Guess what happened to the average ticket price? It climbed 70% over the period, to $9.16.
Now, factor in the growth of major streaming platforms, where a sizable portion of the movie business' film-going audience realizes they can get high-quality theatrical movies at home — at the same time those films are played in theaters.
In the recent past, movie theater locations have looked at big-screen live events -- music concerts, sporting events, and the like -- to bring in crowds in low-performing times of the year.
In the last two years, we had the pandemic, which accelerated the attendance drop, coupled with the rapid rise of streaming.
We suspect capital expenditures going into building these big movie screen locations will need to be remonetized to some degree. The bottom line: Should we be bracing for even higher movie-ticket pricing? It now averages near $12. Can it go to $15? Or $20?
This comes down to marketing -- something movie chain AMC Entertainment started doing in fourth-quarter 2021 -- in part to get people to come back after the pandemic period.
If the movie industry continues to believe the quality of its out-of-home exhibition of films -- larger-than-life screens, state-of-the-art audio, premier seating -- is worth more money, that is going to be a heavy lift.
For some customers, that might be a scary movie ending.