Tuesday, March 14, 2006

Are DVDs the death of movie theaters?

There has been a lot of talk about how movie theaters are in big trouble due to the fact that people buy a lot of DVDs nowadays, can watch recorded TV shows on their TiVo or DVR, and can watch all of these media forms on big plasma TVs that are close to theater experience anyway.

Here is an interview in the NY Times with the CEO of Regal where he explains why he thinks DVDs are good for the movie theater business. Here is his response to the question of how much of a threat DVDs are to movie theaters:

I think DVD's have been the savior of not only the studio model but have been beneficial to theater owners, too, because it funnels more money back into the studios, which in turn fuels higher production budgets, greater numbers of films, and so on.

We have seen the window shrink from an average of about six months between theatrical to video 10 years ago to about four and a half months today. Some compression of that window over time is justified, or has been justified at least in the past, because we generate our piece of the pie at the box office much quicker today than we did a decade ago.

People who run the studios are smart people, and I think they realize the tremendous value of having that theatrical launch pad. And I don't think that's going to change. They make films to be released on the big screen.

Which side do you believe? The side saying that movie theaters are on their way out or the side saying that movie theaters are helped by the popularity of DVDs, etc.?

(Source: Marginal Revolution)


Rebecca said...

I don't think that DVDs hurt movie theaters because the movie theater is a different experience. Actually going to the theater, the theater food, and the fact that you see the movie first contribute to the movie theater experience. I know that my friends and I decide to go to the movie theater before we decide what movie to see, so it's usually about going to the theater, not about seeing the movie.

Anonymous said...

I agree with rebecca. I dont think movie theaters are ever going to go away because it's more about the experience. Although, I think that movie theaters could help their survival by lowering their prices. Because buying the movie is about $20, it's a lot more beneficial to buy the movie, because you pay about that much to go to the theater (the movie's like $8, then plus popcorn and a soda ($7?)) So really, you're only paying about $5 extra to buy the movie and watch it an unlimited number of times with your own popcorn and soda. So, maybe the theaters should become more competative in their pricing. That way, people would go to the theaters more often and still get dvds.
-emily freebairn

Anonymous said...

I don’t think that the movie theaters have seen a decline in business because of the increasing popularity of DVDs. Rather, I think that the expensive ticket and concession prices of various movie theaters have turned off a lot of people. I’ve seen movie theaters in Orange County that charge almost 10 bucks for a ticket and 5 bucks for a small popcorn. Some people are probably thinking that it is not worth the cost of going to the movie theaters when they can rent a DVD for less, even though they won’t have that movie theater experience. I don’t think that DVDs are having a great effect on movie theaters because many people go for the whole experience of watching movies in the theater that you can’t really have when you’re watching at home.

-Ravi Bhatia

Anonymous said...

I don't think movie theaters are hurt by dvds. Seeing a movie in theaters and on dvd is almost like a different product. People go to see movies for different reasons than for buying dvds, so dvds, tivo, etc will not have a dramatic effect on movie theater profits. The money from dvds and tv and stuff does go back to the production companies, so those companies can make better movies which will help both the theaters and dvds.


John Garrison said...

I agree with Rebecca. I don't think theres any way dvds will replace theaters because its all about the hype. Without the hype from the theaters, dvd sales wouldn't be as big as they are. Think about the movies that go straight to dvd, you never hear about them. Plus the theater in itself is an experience, the food, the sound, the huge screen, its all a great way to escape from your lame home.

John Garrison

Anonymous said...

I don't think DVDs will ever be able to destroy the theater industry, but I think in the future DVDs will take away a big chunk of the movie viewing audience. We can all admit that our society as a whole is fairly lazy, and DVDs just help add to this. Think about it, what person would want to pay gas money (especially with it going up)and then the expensive movie entrance when you can have all your favorite movies shipped straight to your mailbox. Also, in home theaters have become quite the thing to install in new homes which further pushes the DVD industry. The only reason movie theaters will survive is because the difference in the theater experience and the fact that most people want to be able to talk about cool new movies with their friends so they dont want to have to wait four or five months when it comes out on DVD

Brian Berkowitz

Anonymous said...

brian pretty much brought up the point i was thinking all along.. that people see the previews for new movies and want to go to them now.. not when they come out on dvd in 5 months. People get excited about NEW movies. It's not just a decision on whether you want to stay at home or go to the theater because you can only watch old movies at home. Plus as most everyone mentioned people go to the movies socially. You don't hear of many people going to movies by themselves, but plenty of people watch movies alone at home. So I don't think DVDs will ever cause an end to movie theaters, or any big change at all really.

Anonymous said...

oops.. that last one was by MARIA