• by Wayne Friedman , June 14, 2006

The movie business is still under the gun this year. But despite predictions that new technologies could be to blame, a new survey says more traditional reasons prevail.

Consumers still weigh price, quality, and the cost of time going to movies as a big part of their calculations, according to Nielsen Analytics, part of VNU's Media Measurement & Information division, and the Movie Advisory Board, a joint initiative between Nielsen Entertainment and MovieTickets.com.

"For the movie industry, it would be really nice to blame other technologies rather than take a look at the product up on screen," said Larry Gerbrandt, senior vice president and general manager of Nielsen Analytics, who headed up the study.

Beyond price and quality, the other major effect on theatrical movie business has been with DVDs, even with the leveling off of that business this season.

"To the extent that there is technology competition, it comes from DVDs," said Gerbrandt. "Wait for a couple of months and you have the movie. It's cheaper for two people to buy a DVD then to go to the movie theater."

But some worse news will come for the movie industry should they run theatrical movies on the same day that the movie is released on DVD. Respondents said thirty-six percent would not go to theatrical movies, and instead buy DVDs. "It would potentially crater the business," said Gerbrandt.

So far this year, U.S. box office receipts are up nearly 4 percent--but attendance has been going in the other direction--declining by single-digit percentages for each of the last few years. Studios have typically made up for the lower attendance with increased ticket prices. Sales of DVDs also continue to handsomely feed the studios.

A survey of 2,500 respondents said the more avid a moviegoer--someone who goes nearly 10 times a year--the less of a chance that the consumer will be persuaded to abandon traditional theatrical movie-going.

However, the lighter moviegoer--someone who goes to movies anywhere from one to five times a year--is more likely to use alternatives such as Video On Demand or pay TV as a substitute for theatrical viewing.

Marketing-wise, the biggest influence on people going to the movies is in-theater trailers. This is followed by word of mouth. In third place, the decision rests on the actors' performances. Then comes the movie's title or theme. A critic's review is in fifth place. Then comes TV or Web ads, Internet blogs, and billboard posters. Last place of influence: Local newspapers.

Good news for movie studios: "The critics don't nearly have the impact they did," said Nielsen's Gerbrandt. He points to this year's "X-Men" and "Da Vinci Code" as movies that shrugged off a plethora of bad reviews in getting big box office paydays.

In a finding that has been partially revealed before, Nielsen Analytics says that younger movie consumers (18-24) are the greatest threat to the theatrical movie business, with its ability to consume entertainment on new digital platforms.