MPAA Glickman 2006 Showest 'State of the Industry'

2005 MPAA Theatrical Statistics:

In 2005, total domestic box office was down, but remained near $9 billion, a barrier broken for the first time only three years ago. Global box office is down, but remains 46 percent higher than it was in 2000. The cost of making movies has flattened, and declined from the $100-million-PLUS-perpicture price tag from a few years ago.

Eight movies grossed more than $200 million last year - a new all time high for mega-blockbusters in a single year.

Americans bought more than 1.4 billion movie tickets last year. And over 80 percent of moviegoers say the overall movie-going experience is time and money well spent. But our numbers could and should be better. Average theater attendance per person is down – for the third year in a row. To state the obvious: this is a trend that needs to be reversed.

Changing Landscape of Distribution:

We have some significant challenges ahead. Change is afoot. There is no question the evolution of the on-demand world and the new and enhanced power of consumer choice is impacting the habits and preferences of the audiences we serve – not to mention the internal dynamics of new production techniques, marketing methods, financing of film and distribution strategies, including the current discussion of window lengths.

But it’s just a matter of time until the competitive marketplace makes high-tech home entertainment more affordable and accessible to everyone. Not to mention the expanding competition for our customers’ time and entertainment dollar - from video games to pay-per-view sporting events, to the Internet.

Theaters must add value in the Experience Economy:

All the modern technology in the world notwithstanding, Americans will come to the movies if they think they have value. But if they don’t, they will stay home.

So the question we must answer is what are we going to do to make sure our customers are getting a valuable experience and that they appreciate the value of the experience?

But the critical role you play as exhibitors in giving the audience a place to come and connect with that story should not be underestimated. It is your job to ask, why should they come to my theater rather than staying at home? Why should they sit in my seats and eat my popcorn rather than on their sofa with the microwave variety? If you can’t give them good answers to these questions, they won’t come.

I was home in Wichita recently and was visiting with a theater owner who said to me something very obvious that I think is important. He said, “We’ve all got to be thinking creatively about providing a good value. People have to think, it‘s worth my time to go there.”

There are other things that exhibitors are experimenting with to provide their customers added value. For example, offering concierge services that actually make dinner and babysitting arrangements for their patrons.

Theaters must look for market retention:

We should be looking at other industries who have aggressively courted loyalty. I think of the airline industry and its frequent flier program that rewards repeat business.

The goal of this research is not to suggest to theater owners how you should do business. We want to be armed with data that will inform our efforts to accomplish two things: First, to foster an environment in which our companies and all producers and distributors of movies can continue to thrive. Second, to better communicate the value and rewards of the movie-going experience.

Re-establishing and branding the theatrical experience:

We as an industry collectively spend hundreds of millions of dollars promoting individual movies, but very little promoting the value of the movie-going experience or the movies in general. Why not?

Piracy of Intellectual Property in the Creative Economy:

There is a reason I am a broken record on this subject. Copyrighted works like movies are unique cultural and economic assets that deserve protection. And making sure consumers actually pay for the movie experience continues to be at the core of our mission. On this front we have launched a multi-pronged approach – one that includes enforcement, litigation, legislation, education and innovation. And we are making progress on a global scale.

We are advocating legislation at the federal and state levels to fight movie piracy. From enacting anti-camcording laws that punish people who go into your theaters with the sole purpose of stealing movies, to promoting digital anti-piracy laws designed to stop people from stealing movies from the comfort of their homes, we are aggressively moving forward to protect the value of the movies we all love.