Sisters Ornella and Yolanda Schinazi don’t eat out much anymore. They rarely go out drinking, and they have cut way back on shopping.
Like many Americans, the Glendale residents are feeling the pain of the economic downturn. Ornella, 28, recently took a $25,000 pay cut at her job, and Yolanda, 25, has been frustrated all year in her search for work.
But one thing the Schinazis haven’t cut back on is movies. In fact, they’re going to more of them than ever.
“We don’t really go out anymore. What we do is go to the movies,” Ornella said on a recent weekend as the pair waited in line at Pacific Theaters 18 at Glendale’s Americana mall. They were deciding whether to see “The Blind Side” or “Ninja Assassin.”
“When you go to a restaurant, you spend a lot more money. Plus, this lasts longer,” added Yolanda.
Such sentiments have been music to Hollywood’s ears all year. Despite a recession that has led to drops in nearly every category of consumer spending, box-office revenue is up 8.6% so far this year in the U.S. and Canada and is certain to ultimately top $10 billion, an all-time record. Unlike in many previous years, the increase isn’t being driven by rising ticket prices alone. Attendance is up 4.5% over 2008, according to Hollywood.com Box Office.
As consumers spend less on other leisure activities like travel, eating out, sporting events and shopping, they’re turning to the movies as a relatively cheap way to get out of the house, even with the price of tickets exceeding $10 in most Los Angeles theaters.
The box-office boom has not only surprised many in Hollywood, but provided a much-needed source of revenue growth as DVD sales have plunged more than 13% so far this year.
And it has proved that despite a digital revolution in the ways audiences consume content, one of the oldest methods has not lost its appeal.
“When the economy is down, people start cutting back, but after a while they want to go out and be entertained,” said Ed Mintz, the president of market research firm CinemaScore. “Even at $10, or $15 for IMAX or 3-D, going to the movies is still a cheaper night out than almost anything else.”
Americans aren’t the only ones flocking to the movies. Box-office receipts are up in local currency in nearly every major foreign market, including the United Kingdom, Japan, Germany, Australia, Mexico and Brazil. Some of the biggest hits overseas didn’t make nearly as much of an impact in the U.S., most notably “Ice Age: Dawn of the Dinosaurs” and “2012.”
The only other year in the past 20 when ticket sales have grown more was in 2002, during the post-Sept. 11 recession.
But this year marks a much more dramatic turnaround. 2002 was the culmination of a long-term rise in movie attendance that hit an all-time high of 1.6 billion tickets sold that year. Since then, attendance has dropped consistently, save for a small rise in 2006, leading some to speculate that the rising quality of home theater systems and new technologies like video on demand were making going out to theaters less appealing than watching at home.
“There was a feeling that the business was recession-proof, but this is more than that,” said Jeff Blake, vice chairman of Sony Pictures Entertainment.
“This is people rediscovering going to the movies.”
The rapid expansion of 3-D projection this year has undoubtedly helped the industry, offering a compelling experience in theaters that can’t yet be replicated in the home -- along with ticket price surcharges that help the studios’ and exhibitors’ bottom lines.
But the big story at the box office is that audiences aren’t only rediscovering movies, they’re seeing a broader group of them.
This year’s haul is not being driven by a handful of mega-hits. 2008’s No. 1 movie, “The Dark Knight,” grossed $533.3 million domestically, compared with $402.1 million for this year’s top performer, “Transformers: Revenge of the Fallen.” 2009 has seen an unusually high number of big but not blockbuster hits that grossed between $150 million and $300 million, such as “Star Trek,” “The Twilight Saga: New Moon” and “Fast and Furious.”
That has led to plenty of talk in Hollywood that recent movies might simply be better quality. But the average grade given by audiences to films this year has been a B, according to CinemaScore, the same as in 2008.
There has also been little change in the demographics of moviegoers, 53% of whom are female and 64% of whom are younger than 35.
The only difference that pollsters have found among the public is how they value going to the movies since the economy collapsed.
Research firm OTX discovered in a survey early this year that consumers ranked moviegoing as the best value for their entertainment dollar.
In early 2008, a similar survey ranked moviegoing fifth, behind going out to dinner, watching a DVD at home, watching favorite TV shows, and surfing the Web.
The result, said Kevin Goetz, president of the worldwide motion picture group for OTX, is that people who used to go to the movies only occasionally, which the firm defines as fewer than six times per year, are going more often in the recession.
“All indications are that there has been an increase in the number of people we define as ‘regular moviegoers,’ ” said Goetz. “There are people going who didn’t necessarily go in the past.”
New social technologies are also affecting moviegoing, many studio executives believe. Though there’s no conclusive evidence about their effect on the bottom line, it’s clear that word of mouth is spreading faster than ever via texting, Twitter and Facebook.
That may be one of the reasons for the unusually large number of pictures this year that played for weeks, riding strong buzz to more than $100 million, including “The Hangover,” “The Proposal,” “The Blind Side” and “Paranormal Activity.”
The trend is also being aided by a factor that, on its face, would seem to be a negative for the box office: Due in part to a reduction in private equity financing for production, substantially fewer films have come out this year than in the past. According to Exhibitor Relations Inc., the number of movies released by the end of 2009 will be down 14% from 2008.
“It’s a really good trend for us, because you have the opportunity to play your films longer,” said Jeff Robinov, pictures group president for Warner Bros., which released “The Hangover” and “Blind Side.” “Two years ago it was much harder to break through the noise.”
Back at the Americana, there was no indication that the box-office boom is merely a blip on the radar. Mother and son Jackie and Sergio Garcia of Glendale, who were waiting to see “New Moon,” said they were already making movie plans for the next few weeks, when a number of highly anticipated titles such as “Avatar” and “Sherlock Holmes” will be released.
“We’re spending less on travel this year, so we’re not going out of town for the holidays,” said Sergio, 27. “What else are we going to do after Christmas dinner? We’ll pop into the movies.”