Reel Blog

"Anonymous" wonders if studios are trying to kill the movie theater business

Anonymous writes in The Wrap:

In a stunning suspension of disbelief, many studio executives argue that an enhanced early at-home alternative will encourage MORE people to go to the movie theater — do people this naive really exist? It sounds exactly like the last ten years of internet gurus and solons calmly insisting that free (stolen) music would encourage higher CD sales. See how well that worked out. Fool me once … call me a record executive; fool me twice … what do they think, we’re politicians?

Anonymous goes on to offer a truly disturbing view of the current thinking at the studios:

As for the impact on theatrical attendance, I believe it will be devastating. However, among studio execs the best case quoted to me was a 10 percent drop in attendance with the executives insisting that, “Some theaters will close, others will raise prices … it’s all good.”  The reality is that a 10 percent drop in total attendance, across the board and permanent, will cause 2/3 of all the theaters in the U.S. to close their doors and never open again. 

When I brought this up, the response was that movie theaters were just a real estate play anyway so profits didn’t matter to the theater companies — something which hasn’t been true for 30 years. Today, virtually all theaters are in leased premises rented from mall owners with only older, outdated facilities still existing on owned property.

The lack of knowledge of the economics of the theaters is stunning – but it pales in comparison to the lack of interest in hearing any point of view other than their own.

Read the whole thing. It’s some of the best analysis of the economics and value of the theatrical space I’ve ever read.