The movie industry has been in a tailspin. The recession, and the downward trend in overall economic activity have been bad for the movie industry. But what can the movie industry revenues do to recover? There are a number of possible answers, and they will be explored in this article.
To begin, the obvious is that movie studios can raise ticket prices to generate new business. Theaters are competing with each other for new business, and it is no secret that movie business is up and down all the time. In fact, there was a recent report that theaters are cutting back on screen time and menu selection in an effort to stay afloat during the current recession. However, this may not work. Ticket prices have been rising and so has studio revenue.
For the studios, one option is to create new platforms to release their movies. Theaters have been releasing movies on DVD for some time now and with every new platform comes new distribution fees. These fees go up each year as well, but it seems that studios are going to have trouble keeping up with increased costs. This is one of the reasons why attendance at the movies has decreased. Theaters have had to increase their prices for movie tickets in response to this increased competition. One solution that has been suggested is to launch new outlets for the movies that have been generating less revenue.
Another option is to start a lottery ticket drive. A recent New York Times article suggested that the entertainment industry should look into the idea of creating “levine systems” to get moviegoers from theater to different venues. This would allow the moviegoer to commute from the theater to the different venue without having to drive. This may not fly with the movie studios, because the current recession is directly correlated with a drop in ticket sales. If the movie industry was to launch such a scheme, it would likely face the same fate as the stock market during the recession – it may suffer as a result, but not by the same amount.
Perhaps the most interesting suggestion comes from a former Disney executive. Kevin Costner says that the movie studios need to focus on “stuffing more in the movie.” He points to the success of the Harry Potter series, which includes a large cast of complex characters. Instead of spending money developing these characters, the studios should invest in better visual effects, more realistic acting, better special effects, and a better new technology that allow for “faster action.”
There are many suggestions out there about how to improve the movie industry, but what about the studios themselves? One solution comes from Walt Disney CEO and chairman emeritus Chipotle Macaskill. According to Macaskill, the movie business is in a “downward spiral.” He argues that the major studios are focusing too much on the “effects.” Instead of investing in the “emotional hooks,” Macaskill suggests that the studios should spend more on the “hook” – the ability to build a brand.
As a result, studios should consider investing in video games, home theaters systems, and similar products. In other words, the entertainment business has woken up to the fact that people want to have experiences that enhance their movie-watching experience. The studios need to take this into consideration. And to do so, they should consider investing in new technology.
According to Macaskill, the major movie theater chains can survive for a few years, but they will ultimately be swallowed up by digital distribution companies like Netflix and Hulu. He maintains that the way to increase revenue ticket sales is to focus on creating new game content that can be played on existing movie theaters. He makes this comment while acknowledging that Disney does have a good movie library, and the company also has a rich history of producing popular television programming. However, he argues that the company has yet to reinvent itself in the modern era of internet culture and video games.