Hollywood is beginning to freak out because the box office revenue is down 20%. Movie companies, directors, and producers, are beginning to get nervous about the drop in Hollywood revenue. The first quarter of 2011 was not nearly as successful as the first quarter of 2010, but we have to remember that the demand for each movie varies based upon personal liking. Movies such as Avatar and Alice in Wonderland that were released in the first quarter of last year, created a large viewing demand, but many of 2011s great hits haven’t hit the big screen yet. Since we are still in the recession, it makes sense for people to cut down on extra expenses, such as movies that they really have no desire to see. The income effect helps us understand that if a person’s income decreases, then they will cut down on extra expenses that will make them feel poorer, such as movies. Another alternative to sitting through a movie in the theater is getting a movie through DirecTV. DirecTV’s new option of purchasing a film two months after its release in theaters contains a series of possible trade-offs. If you were to wait the two months to see the film on DirecTV, you would not be able to talk about it with friends or even understand what they’re talking about. Another trade-off would be getting to see the movie in the comfort of your own home as opposed to the possibility of a noisy theater. Also, if your family exceeds four members, then it may actually be cheaper to buy it on DirecTV.
Written by: Arin McGovern
I really like this article; partly because movies and hollywood are somethings that really interest me. This is true though, if you think about it, there are on average about 3-4 movies that are HUGE box office hits every year. This means that the amount of income that pours into theaters after these movies is dramatically increased. These movies are the movies that a lot of people, despite the economy, will still go and see because of their high acclaimed success and popularity. Arin is right, their honestly hasn't been any "box office hits" this year yet. There have been movies which have done better than others and made a nice profit such as Battle Los Angeles which remained number 1 at the box office for several weeks. I don't think there is too much to worry about though, many people will continue to go to the movies and continue to enjoy them. There may be a slight decline in profit for directors/movies but every profession has slumps along the way and if the movies people make are good and appeal to their audiences then I have no doubt the the movie business will end up just fine!
ReplyDeleteAlex Y