Yesterday I watched Alfred Hitchcock's Notorious, a film way ahead of it's time and a huge box office success grossing $290 million on a production budget of $24 million in today's dollars, according to The Numbers. Now, I just happened to decide to revisit one of my favorite filmmaker's best Hollywood productions before I came across this article at Time.com, "Box Office Blues: The Blockbusters That Weren't," which mentions the year Notorious was released, 1946.
The article points out the downtrend in admissions, the current estimate for this year at 1.27 billion, far below the 4 billion tickets sold in 1946, a time before free television started to erode the movie-going audience. With attendance in May 2010 down 19% from May 2009, Time puts the blame on the releases this year compared to last year, a consistent message coming out of the media today, and one I'm completely inclined to agree with. But I think there's also a lot more to the story.
What the article failed to talk about was that big fat price hike that showed up before this summer. With tickets 4% to 10% higher and most Americans in not any better financial position then they were a year ago, is it really accurate to blame the release slate for the decrease in attendance? Because Hollywood struggles so dearly with their P&A on so many movies they seem to completely ignore the #1 rule in marketing anything: Pricing.
While the article does point out that attendance in 2009 was about equal to 1997, meaning the 62% increase in box office revenue ($6.51 billion to $10.65 billion) is completely a result of price hikes, no question on pricing is raised. Why does the media and the industry mostly ignore the question of pricing?
The industry likes to point out that a family of four can go to the movies for a lot cheaper than other entertainment options like amusement parks, sports events, and music concerts but to me that's not an apples to apples comparison. So what about that glorious year of 1946 when three times the amount of tickets sold with half the population of today?
I did some research, ok googling, and the numbers I found don't surprise me. Let's start with going to see Notorious in 1946. The average ticket price was $.10, so adjusted for inflation to 2010 that works out to $1.19. While in 1994 I saw Forrest Gump at a discount theater for $2, here in LA the lowest ticket price I can find is $5. I imagine that's similar to most cities around the country.
I know what you're thinking, yes we pay a lot for a movie ticket today but don't we pay a lot for everything else as well? Let's see. How about a car? I found the average price of a car in 1946 to be $1,400 which works out to $16,611. Gee, I can get a new car for cheaper than that. How about some gas to put in that car? In 1946 that'd run you $.21 a gallon, adjusted for inflation that's $2.49. Not so far off huh?
I know, movies and cars aren't the best comparison, so let's use what the studios use. How about a baseball game? According to this article I found, Yankees tickets just to get in the game cost $1.25 with the good seats running $2.50. So that shows a ticket price range of $15 to $30 in 2010 dollars. How does that compare to today? Well, getting the good seats is going to run over $100 with some as high as $300, but you can still just get in the game for $14 and the grandstand tickets that ran for $15 are now $20-25. So while the studios can continue to boast how going to a movie is cheaper than a baseball game, this doesn't account for the fact that the average movie ticket price, $7.50, has risen 530% versus 66% for baseball if we take the higher priced grandstand seats at Yankee Stadium.
With 3D being all the rage and studios basically saying everything will be released in 3D not long off, it seems to me Hollywood's pricing model is simply going to be raise, raise, raise the prices. Are you getting a 530% greater value at the movie theaters today? If every single movie was as good as Toy Story 3, sure, but when's that going to happen?