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Cinema attendance declines

Americans are going to the movies less each year. Per capita attendance has declined from 5.7 visits in 2002 to 5.4 in 2003 to 5.2 in 2004. That's a 9% decline over just two years. And 2005 is shaping up to fit the trend with current industry estimates showing a 6% decline in ticket sales.

According to a Harris Interactive poll, 30% of Americans say they've seen fewer films in the first half of this year than in the first half of 2004, while only 15% say they have seen more films. When those who saw fewer films were asked why:

• 66% indicated a shift toward home entertainment
• 53% were dissatisfied with the theatrical experience
• 44% cited time constraints
• 35% said this year's movies aren't as good as last year's films.

DVDs account for most of the answers about a shift toward home entertainment, from DVDs coming out so quickly that people don't mind waiting, to renting and owning more DVDs. When it comes to dissatisfaction with the cinema experience, ticket prices were cited as the predominant factor, followed by disliking advertisements that are shown before the movie.

While movie attendance declines, the number of movie theatre screens is increasing, from 35,280 in 2002 to 36,594 in 2004. Combined with the declining attendance, that means on average each movie screen had 9.5% less attendance in 2004 than in 2002.

Location-based entertainment facilities such as family entertainment centers are different than cinemas, especially from the standpoint of having no alternative to the experience, whereas cinemas now compete with DVDs in the home. However, the Harris Interactive survey results showing that some less frequent moviegoers cite time constraints as the issue could foreshadow a trend toward less time available for out-of-home entertainment. If this is true, then to maintain their attendance, LBEs will need to sharpen their acts to make visiting an LBE an even more compelling experience.

See following story for more about leisure time.

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