Are Movies About To Go The Way of LPs?

If you happened to be in West Orange, New Jersey, of late, you’ve probably noticed a rumbling as Thomas Edison is rolling in his grave. Digital technology has completely disrupted two of his most-notable inventions—the phonograph (1878) and the motion picture camera (1897).

The music industry took it on the chin first and has managed to recover very handily. According to the Recording Industry Association of America (RIAA) in 2023, recorded music revenues were up eight percent to a record $17.1 billion. In 2021 it was $15 billion. In 2022 it was $15.9 billion.

The thing is, were we to go back 10 years, you would have imagined that physical media sales—CDs and vinyl—would have been the media of choice going forward. In 2013 172.2 million units of physical music media shipped in the U.S. Yet in 2023, the growing overall music market and the “resurgence” in physical product notwithstanding, record companies shipped 80.2 million physical units, accounting for 11 percent of the recorded music revenue.

Where is the money coming from in recorded music?

Streaming. 84 percent of the $17.1 billion.

The movie industry is pretty much where the music industry was a decade or so ago.

The numbers don’t look bad. In 2021, the domestic box office gross was $4.5 billion; theaters sold 444 million tickets. In 2022 the total U.S. box office gross was $7.4 billion on ticket sales of 702.5 million.

And in 2023, the numbers, according to The Numbers, were $8.9 billion box office gross and 830 million tickets.

Looks good, right?

But here’s the thing: there are signs that people are becoming more resistant to “going to the movies” when they can simply sit at home and watch it on their 65-inch TV through Netflix, Amazon Prime, or another digital service.

Consider last year’s so-called “Superhero Fatigue.”

Last year there were The Flash, The Marvels, Ant-Man and the Wasp: Quantumania, Shazam! Fury of the Gods, and Blue Beetle, all of which ended up as box-office disappointments, to put it mildly.

This past Memorial Day weekend, despite the openings of Furiosa: A Mad Max Saga and The Garfield Movie, potential movie viewers stayed away from theaters in droves. It was the worst box office weekend in nearly 30 years.

So does this mean that the summer movies now are much worse than they used to be?

Maybe. But Furiosa also has a 90 percent score on Rotten Tomatoes. So if potential audience member saw and believed in that, then where were they?

I’d argue sitting in chairs that are more comfortable than even the cushiest theater seat, chairs that countless others haven’t previously occupied for hours.

Consider: the average price of a movie ticket in the U.S. is approximately $10.50.

The Netflix Premium plan—unlimited ad-free movies, TV shows and mobile games; Ultra HD; ability to watch on four devices at a time and to download to six supported devices; spatial audio—sells for$22.99 per month. Or two bucks more than a pair of movie tickets. The Netflix Standard plan gets you the unlimited viewing, but viewing and downloading on two devices, and “Full” not “Ultra” HD viewing, comes at $15.49 per month. In other words, the whole family can watch for $5 more than a single person.

But isn’t there something to be said for the communal experience? Yes, but there is also something to be said for the fact that the latest Gallup Economic Confidence Index stands at -29—that’s a negative 29. Economics are a huge issue for Americans, so clearly a few bucks can make a big difference.

Or consider this: Netflix’s market cap is $279.6 billion.

The market cap for AMC Entertainment Holdings, the biggest theater chain in the world, is $1.5 billion.

To be sure, people are still going to make movies. But will the nature of these productions be what they were?

It isn’t likely.