HIGH COST OF SEEING MOVIES BLAMED FOR BOX-OFFICE SLUMP

Study Also Finds Young Men Staying Away From the Multiplex

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LOS ANGELES (AdAge.com) -- While major Hollywood executives have been blaming the quality of movies on this year’s box-office malaise, a study from research firm Online Testing Exchange fingers the cost of a trip to the movies, along with competition from other entertainment, as the more serious culprits.

The study, conducted via online interviews with 2,000 moviegoers between the ages of 13 and 54, found that the perceived value of seeing movies in the theater doesn’t stand up to other entertainment options like playing video games and watching DVDs on home-theater systems.

'Cost-value relationship'
“We’re in the digital age where moviegoers are often the early adopters of new technology,” said Bruce Friend, exec VP-managing director, OTX, as the Online Testing Exchange is called. “Movie theaters are facing so much more competition than even a few years ago, and people are very conscious of the cost-value relationship.”

The quality of big screen movies themselves, though, “has remained relatively the same,” said the study from the Los Angeles-based firm that tracks pre-release buzz for Hollywood’s movies and forecasts box-office results. OTX executives plan to release the study’s findings Oct. 10.

Participants in the study said they are more selective about which movies they see in the theater than they used to be because of rising ticket prices. Overall, 35% of those surveyed said they saw fewer movies this year than last; only 27% reported seeing more movies.

A product problem
Hollywood executives, after initially citing everything from high gas prices to population changes for the box-office slump, have lately been acknowledging it could be a product problem. Sony Pictures Vice Chairman Amy Pascal, whose studio unleashed the duds Bewitched and Stealth, said recently that the movies themselves caused consumers to stay away. Other executives and filmmakers have owned up to their recent flops.

Though the study results give Hollywood a slight reprieve on its much-maligned output, one finding could strike fear into movie executives’ hearts. The most prized movie-going audience, males ages 13 to 24, said they are seeing 24% fewer films than they did in 2003. Their Internet and video-game consumption, however, is up -- 62% now regularly surf the Web, 53% instant message with friends, and 53% play video games. Participants said they watched 47 movies on DVD this year, a whopping increase from the 30 DVDs they reported watching two years ago.

Also disturbing is a growing number of young male respondents citing a lack of appealing content coming from Hollywood. During the 2003 survey, 60% of under-25 males in the study said there was an “excellent selection of films to choose from.” That number plunged to 35% in the recent study.

Out of touch
With all the entertainment competition, it might be even tougher to roust young males out of the house, said Paul Dergarabedian, president of box-office tracking firm Exhibitor Relations Co., and filmmakers might not be as in touch with that demographic as they think. “You’d think that movies like Stealth and The Island would’ve appealed to that audience,” Mr. Dergarabedian said. “But they're changing, and they're not so easy to read anymore.”

Many people prefer to watch movies at home, knowing they’ll only have to wait a short time from the theatrical release to see it on DVD, the study found. They’re misinformed about that feature-to-DVD window, though. About 40% of moviegoers think it takes under two months for a movie to be released on DVD; 60% think it takes less than three months. The average time is about four months.

The study would seem to back up anecdotal evidence about consumers’ homebody tendencies -- 59% of participants said they prefer to see a new movie when it’s released in theaters compared to 79% two years ago.

A rough year
This year has been a rough one for Hollywood’s movie studios, especially considering the comparison to 2004 when moviegoers turned out in force, propelling $9.4 billion in box-office revenues on 1.5 billion admissions. After a dismal start this year and a disappointing summer, with a few solid-grossing exceptions, the box office is down about 6% so far and attendance is down 8%, according to Exhibitor Relations.

Box office has been on a see-saw in recent weekends, with some strong openings like Transporter 2 and The Exorcism of Emily Rose. The Sept. 23 opening of Flightplan and wide release of Tim Burton’s Corpse Bride caused a 40% surge year-over-year. This past weekend, however, was down 22% compared to the same weekend last year when Shark Tale and Ladder 49 led the pack with a combined $69.7 million.

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