There’s an interesting piece in the Aug. 8, 2005 issue of Newsweek that talks about how the movie business is going to have to change over the coming decade. The pressure to change is coming from a number of directions. For one thing, technology is changing how movies are made and exhibited; film is becoming a thing of the past. For another, the home entertainment business is growing a lot faster than the in-theater business; “since 1975, ticket sales have grown very little—from about $6 billion then to about $9 billion today,” Newsweek reports. “Home viewing, meanwhile, has exploded, from virtually nothing 30 years ago to $28 billion today—more than triple the revenue from theaters.” And, it probably doesn’t help that the summer of 2005 has been a lousy season for movies, with box office numbers down compared to a year ago – which creates at least the possibility that the business is in for fundamental changes.
As interesting is the piece is, one of the things that intrigued us is the artwork accompanying the piece – it shows the movie complex of the future, and suggests the varying ways that theaters may have to change in order to keep attracting patrons. In addition to having theaters showing first-run films, for example, there may be stores selling a broad range of film-related items; cafés, bars and restaurants offering a broader range of better quality foods and beverages than generally seen today; kiosks that sell DVDs of the film just seen by the moviegoer, at prices that are high on opening night and decline during the movie’s run; state-of-the-art gaming facilities; high-tech theaters that could show live sporting events, like the Olympics and the Super Bowl, that might be marketed cleverly to consumers; and, finally, a broader range of films than one finds today at the multiplex, with art films and documentaries playing next to major studio releases.
As interesting is the piece is, one of the things that intrigued us is the artwork accompanying the piece – it shows the movie complex of the future, and suggests the varying ways that theaters may have to change in order to keep attracting patrons. In addition to having theaters showing first-run films, for example, there may be stores selling a broad range of film-related items; cafés, bars and restaurants offering a broader range of better quality foods and beverages than generally seen today; kiosks that sell DVDs of the film just seen by the moviegoer, at prices that are high on opening night and decline during the movie’s run; state-of-the-art gaming facilities; high-tech theaters that could show live sporting events, like the Olympics and the Super Bowl, that might be marketed cleverly to consumers; and, finally, a broader range of films than one finds today at the multiplex, with art films and documentaries playing next to major studio releases.
- KC's View:
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In part, we like this story because we’ve always loved the movies; while we’ve found the dearth of terrific movies this summer to be depressing, we’re also usually playing around with a screenplay or two – hooray for Hollywood.
But from a business perspective, we think that this article points out how changes in the customer are forcing changes in old fashioned and fundamental business models. It’s happening in movie theaters, and there is no reason to think it won’t happen to industries like the supermarket business. It would be arrogant for any of us to think that the supermarket of 2015 will pretty much look like the supermarket of 2005…and it will be the retailers who start to figure this out now who will be in a better position to win a decade from now.
