The movie theater fights back

Movie Theater

Fears that DVDs could spell the end of the movie theater may have proved premature. For the first time since 2002, US citizens spent more money at the box office last year than on DVDs.

According to Adams Media Research, the total spent on tickets at US movie theaters was $9.87 billion in 2009, up by 10% on the previous year. Meanwhile DVD sales dropped by 13.7% to $8.73 billion.

The DVD sales figures include Blu-ray sales. They don’t include DVD rentals (either physical discs or through downloads and on-demand services), which the Wall Steet Journal notes are on the rise but offer far lower profits for movie studios. The number of rentals rose by a much higher rate than the total rental revenues, suggesting there is greater competition in the marketplace.

There are some other potential explanations for the change of trends. One is that DVDs are increasingly being used as a way to get shoppers into stores, with the retailers taking little profit or even using movies as a loss-leader. Another is that movie theaters are doing well thanks to films in 3D or with other spectacular visual effects which are less impressive on a home screen.

The overall US spending on movies was only barely down during 2009 ($28.38 billion from $28.47 billion). That might seem odd given the economic conditions but may back the idea that movies are seen as an affordable form of escapism during tough times.

Across the Atlantic, movies had a strong year in the United Kingdom but have now been overtaken by video games as the third highest-grossing form of entertainment (behind TV and music). Gaming is now worth $1.73 billion a year in the country, compared with $1.2 billion spent on cinema tickets and DVDs. That appears to be down to a combination of more people owning consoles (particularly the family-friendly Wii) and major grocery chains offering discounted games alongside CDs and DVDs.

[Picture credit: Flickr user Gailf548]

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