Movies in a recession

Do people spend more on movies when there is a recession? If they do, why is it so?

The New York Times had this interesting observation about the box office collections last week:

Overall the Top 10 films took in $134.4 million, according to Screenline. That is about 10 percent higher than the $122 million in ticket sales for the top 10 films during the equivalent weekend last year, when Evan Almighty held the top spot.

One cannot base observations from one weekend alone, of course. Perhaps last year, the weekend was rained out in many places, or there were no good movies (not that that has stopped anyone on a summer weekend). But even with assuming all this, a 10% increase this year seems to be rather high, especially if we are in a recession.

Why would people spend more on movies during a recession?

– Is it that movie watching is a cheaper option than other forms of entertainment? Cheaper than going to amusement parks, or going to the opera or a concert? Or going to the mall?

– Do gas prices come into the picture? Do people prefer going to a nearby theater rather than, for instance, go camping or fishing (inexpensive but far), or spending a day at the beach?

What do you think the reason is?

Does it also mean that we will see more movies this year that are geared towards a family audience?


16 thoughts on “Movies in a recession

  1. So box-office sales are the new hemlines? (hemlines supposedly rise and fall with the economy).

    We’re looking at just one summer’s data. Perhaps this analysis could be extended to the last 60 years? (’70s and ’80s should provide some valuable data points, as they were also “down” years in the USA.)

  2. I don’t think that it’s enough data to really have a theory (and then corelation and causation…), but assuming that people really go more to the cinema in a recession (which I actually doubt), I’d probably explain it with a bit of escapism, as ??! mentionned, but mostly I’d think it would be the price. Cinema is still comparatively cheap (and it hurts me to write that as my purse bleeds from my escapades…).

  3. ??! That is definitely one possibility. Then we have to also ask if alcohol sales go up too, and lottery sales too,maybe.

    km: You know, I have been seeing longer hemlines for about 2 years now – you know, those long skirts? Maybe it’s just because I see a lot of Somali women.
    I will gladly extend the research for another 60 years. Just send me the data 😉

    kalafudra: I agree it’s not enough data 🙂 But when you say cinema is comparatively cheap, what are you comparing it with? Another form of entertainment? Or say, retail therapy, or something else that makes you feel better?

    La vida Loca: Well, we are in a war too 🙂 So maybe that’s twice the reason. But I always thought escapism works best if you have Bollywood-like films that have a lot of song and dance and are completely unconnected to reality. Or wait, is that why we have movies like “Ironman” and “Kung Fu Panda” doing well now?

  4. may be its just a weird coincidence 😛
    i have heard that unemployment has increased in US ..may be the unemplyed ppl are going to theaters a lot more to kill their time..
    there are lots of may be’s
    but no sure reason..

  5. I would say this is an interesting observation. Recession and increase in movie viewership. Yes, it could be because of easy accessibility of movie theaters. Are movies really that expensive in US?

  6. arvind: The unemployment rate did increase, but that could be a factor of many things – more people actively seeking employment will increase the rate, for one thing (i.e. if people want to come back into the workforce). Like this movie data, that recent jump is also actually inconclusive 😦

    Poonam: Well, of course it varies by city, by time of day and by day of week (weekends are more expensive, of course), but anywhere between $7 and $12, I’d say. Add a few more bucks for the popcorn and the drink.

    Billiflug Vietnam: OLS – Ordinary Least Squares? Oh yes, I think someone should do a detailed regression analysis on this 🙂 The weather is definitely a factor, but I am not sure how that would work. People do like to get out of the house if it’s gloriously sunny outside, but would you then want to be cooped up in a movie theater (as opposed to, say, go fishing) ? Or would you rather go watch a movie on a rainy weekend when there’s nothing else to do?

    kalafudra: I see what you mean. I agree, movies are definitely less expensive than concerts or plays! Or going to a game – any basketball, whatever.

  7. Not enough data, I’d say. Shouldn’t there be additional data that shows correlation between movie-goers and how they’ve been affected by the economy? Maybe those who have been blessed by the economy decided to splurge on movies.

  8. I would like to think of the two as unrelated. Evan Almighty was a bad movie in a line-up of other placid ones. This year has seen some better material in the movies translating to more ticket sales.

  9. Amit: Is there anyone who has been really blessed by the recession? Short-sellers, perhaps. Even they would bear the impact of the housing price decline. Who else?

    Vijay Kumar: Yes, that’s possible. So then what you are saying is that we shouldn’t compare it with last year because it was a weaker year, but should also compare the data with similar weekends 2 years back, and so on..

  10. “So then what you are saying is that we shouldn?t compare it with last year because it was a weaker year, but should also compare the data with similar weekends 2 years back, and so on..”
    adjusting to inflation, yes. Any law, has a disclaimer like “under standard conditions of temperature and pressure” or something similar. So, if you are going to form a proper comparison the variables too should be comparable. Take a year that had equal number of successful movies and then adjust to inflation to see if recession plays a role in the final numbers.
    I think I just burst a vein there.

  11. I have read somewhere that the ticket prices have increased in the last one year. I am not sure about US, but the prices have definitely gone up here in Australia.

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