Cinemas Going The Way Of Arcades
One of the things about being older is you are around long enough to see things transition.
Do you remember the film The Karate Kid with Ralph Macchio? The was released in 1984 although there was a remake in around 2010.
The reason why I mention this film is there was a scene where they went into an arcade. For those who are not familiar with this, that was a location where people use to go and play video games. This was before in home gaming systems like Atari and Nintendo. Basically you went with your quarters to play Pac-Man, pinball, and a host of other games.
It seems pretty archaic but that is how things were. Of course, this business was destroyed in the 1980s with the explosion of gaming devices. Suddenly, people could buy the system and get cartridges for the games.
Cinemas Are In Trouble
This is how technology can change things.
Many thought the VCR was going to kill the theater business. Ironically, due to an increase in distribution, that technology actually made the movie industry even more popular. People started to consume even more films. It caused a massive explosion in the creation of movies, with new studios popping up.
So what makes me question things this time?
Cinemas are in trouble. Without a crystal ball, it is impossible to know if this is just a temporary situation or if we are facing a change in behavior.
Unlike the arcade, where technology drove it, we have a change in behavior that I think is difficult to overcome.
Four years ago, the global economy was shut down. Obviously, people were not able to head to the movie theaters. The studios already had their streaming services in place, so what was released went right to streaming.
This is, naturally, not a model that is great for the theaters. While they were closed, it was what everyone had to deal with.
The challenge arose after things reopened. While new films did not go right to streaming, the studios were losing a fortune on those services. For this reason, they had to do what they could to try and stimulate interest.
Here is where things get tricky. In the studios' estimation, the way to do this is to get the films on there in a quicker period of time. This is a practice that started so long ago people are conditioned at this point. When a new film comes out, it will likely hit streaming within a couple months.
Therefore, the incentive is not to rush out to the theater. This is coupled with the fact that a movie ticket can easily run $25 per person. Add in popcorn and sodas and you can see how it could be an expensive night.
All of this is putting cinemas in a tough position.
The Industry Fragmentation
Another factor in this is the fragmentation of Hollywood. It is a topic I wrote a great deal about so I will not dive too deeply into it.
The point being is that we can find entertainment in many different areas. As the fragmentation occurs, what happens to these theaters. In many instances, they were part of the distribution channel for the movie studios. If those entities do not have a monopoly on content distribution, there are other channels to consider.
One final point is the televisions themselves.
In the developed countries, $500 can get one a 60 inch television that has a terrific sound system. While this might not compare to the theater experience, it can be paid for with a few trips to the cinema with the family.
The point is we came a long way from watching on a 21 inch television.
We are seeing some horrific numbers out of Hollywood ticket sales. Obviously, the success of Barbie and Oppenheimer means that people will turn out when so moved. The problem is, according to many, that not enough movies are of that quality.
While this could be the case, perhaps it is even more basic than that. It might be the situation where someone will take the plunge once in a blue moon. This means a visit for a major blockbuster but the other fringe films, wait until it hits streaming.
Ultimately, we saw the movie and television industry make some major strategic errors. The push into streaming, promoted as the golden goose, ended up being a major money loser. They companies took a wildly successful television model and blew it up.
Are they doing the same with movies?
In the past, they could get away with errors since there was basically a monopoly. That is no longer the case. Competition is coming from many sides.
Who is going to survive?
For the moment, we will question the viability of the theaters.
Are they going the way of the video arcade?
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I'm glad I don't live wherever they are selling these $25 movie tickets. Tickets at movie theaters near me are $4.50 o $7.50. It's only more than that if I want IMAX and that's still under $15...not $25. They gouge you on concessions of course but that has always been the case. Near me, a night out for two at the movies with popcorn and drinks will set you back $30-$40. You can save more if you go on Tuesday nights or for a matinee.
I think movie theaters can still make money but they are going to have to actually release good movies and keep them off of streaming services for the first several months. I don't know if it will last forever though.
Though COVID may have been a trigger to some extent, I think long term the threat to movie theaters is technology driven just as it was for arcades. I grew up with a few channels (eventually getting cable) and our family had to rent a VCR along with movies we rented for a while because VCRs were so expensive. Seeing a movie in the theater was a pretty special thing. Kids today are growing up with virtually unlimited media from a wide variety of sources. For many of them, going to a theater is just an expensive inconvenience. On the other hand, if there is something they really want to see and they aren't going to be able to easily see it anywhere else for several months...
Where you at bro? I haven't seen a theater ticket cost $4.50 since 1994.
About 13 years ago you could go to a $4 movie.
It was 10 AM start time on a Tuesday.
Good for retirees I guess.
Exactly! One cool thing our theater here in Cheyenne is doing to try to get more business: Since most new movies are just too woke for Wyoming audiences, they are replaying old 60's, 70's, 80's and 90's movies in the theater. It's fun.
Yeah. These actually werent old but the same ones they play at night. It is a way to get more revenue from the dead times.
East Central Florida. 10 minutes from the beach, about an hour from Orlando. $4.50 is a matinee or Tuesday evening price but even at peak times, tickets at most theaters near me are below $10.
That's incredible. No wonder so many people are moving to FL.
I would say prices are typically relative.
$25 in San Francisco or New York is different from $25 in a rural town.
There are a lot of triggers we could point to but the end result is the same: as of this moment, it seems like the traffic is declining.
Will they reverse it?
The comparison to arcades is interesting and nice. There are still arcades in Japan and the Philippines, and while there are still some arcade games there like Tekken and racing games, they have shifted to include a lot of claw games. While I agree that the availability of movies in streaming, and people being able to easily make movies in the future hurts cinemas, I don't think all is lost for them.
Like what arcades did with the claw games, cinemas need to improve. They need to make going to cinemas a big deal again. One funny example was the Dune popcorn bucket. Dune was a great movie, but a lot of people were also lining up in cinemas because of how insane the bucket was. They need to make watching in cinemas an experience again. Maybe they can offer other merchandise.
The business model could change, that is true. And, it looks like that is what will have to happen for it to succeed.
Anecdotally, I used to LOVE going to see a movie in the theater. Maybe it's just because I'm old, but these days, I'd rather watch the movie at home. At home I can get drunk and not worry about driving anywhere (all movies are better drunk). Also, movies in a theater used to be affordable, but these days, if I take my family, it's $100. I'm poor now with the rise of grocery prices. I'll still go see a movie in the theater, but it's rare. I used to go every week or two. Now it's once or twice a year.
All valid points and working against movie theaters.
The experience is still good but there is a lot to offset it. The problem is convenience will always win out and that is something that at home offers.
I remember in the 1980s I would throw a coin into a machine and play computer games for 2 minutes. Then I was a schoolboy and one 2-minute game was expensive for me, about 1 pack of ice cream. Nice memories. Recently, I played these slot machines again with my children at a hotel.
Yep.
The advantage to being older is remembering things like that. It is incredible how things changed over the years.
Watching society habits become obsolete is an educational situation.
I'd say that cinemas are more in danger to lose the fight in comparison to theaters, as people still want to visit there opera, ballet and such. But cinemas might become obsolete, as you mentioned, people can stream films whenever they want and don't need to follow a given time schedule given by the cinema. This is a major concern about cinemas, at least for me. At home I can stream whenever I got the time to do so, I still do enjoy a movie at a cinema, but it's more for the nostalgia and to be somewhere else than home, e.g. a date night or so. But I could recognize even cities like berlin have trouble keeping cinemas open as the amount of customers drops.
That is true. Theater in this instance is cinema.
Live entertainment is going to be desired. That is something that cant be replicated by AI.
Don't say that, aren't some big musicians already performing via VR glasses? But obviously it's different than #IRL.
I am sure VR is going to be a big thing at some point and offer a hybrid experience.
It will be great for artists. Can put on a concert of a million people with 15K at the show and the rest in VR.
I am pretty curious about that, as I really enjoy being somewhere in person #irl but I do see chances for ppl around the world regarding this! 😀
I think it is logical.
If an artist has the pull, there will be live attendees for $100 but a VR ticket might cost $10.
Imagine something like that for the Super Bowl.
Yeah, huge opportunity for scaling the event even more and charge even more $ per 30s advertisement spot.
I never realized how much arcades and cinemas have in common until now. It's kind of bittersweet to think about the changes happening in the entertainment industry. But hey, at least we have streaming services to keep us entertained, right?
Potentially could have in common. It is not a guarantee that the movie theaters will collapse.
They could also change their business model to something that works better. I dont know what that would be but that is always a possibility.
Exactly, It's like we're all part of this evolving storyline, wondering what twists and turns the future holds for movie theaters and also It's fascinating to imagine how movie theaters might reinvent themselves
In the past, they could get away with errors since there was basically a monopoly, this era indeed is not one that comprehends mistake. You'll get punished and the wounds are always deep.
The case of them bouncing from here is based on how they can convert strategic innovations without that, it will be a permanent goodbye
Yeah. A lot more options today vying for people's attention.
And much less costly.
Cinemas is really changing the world around and making a massive wave even beyond we can ever imagine. It is just a matter of time actually
Could be. Things do change especially when the habits of people are altered. It is hard to change it to start and even harder to change it back once they switch.
The world of cinema is gradually evolving as I have come to discover it is not really where it was years ago
The title of the post reminds me of early cinema history, when the film itself was supposed to be an arcade-like business. At least, that was general idea of Thomas Edison who in early 1890s experimented with film and had the idea of Kinetoscope devices showing films to individual viewers, very much like later peep shows. In 1895 Lumiere Brothers in France have their films projected on screewn in theatres which proved to be much more practical and cheaper way of distribution.
I don't think the theatres will completely disappear, just like regular theatres didn't disappear. But the people who go there will most likely resemble people who go watch opera, ballet and Broadway musicals today. An average Joe will stay at home watching Netflix, or, more likely, short Tik Tok vidoe on the phone.
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I have a feeling there will be an adaption towards more live events.