Sunday, 1 July 2012

Are opening weekends a zero sum game? Does every ticket sold for one movie come at the cost of another?

No.  The moviegoing audience expands when there are movies they want to see, and contracts when there are movies there aren’t.

This is because regular theatre-goers have the option of not seeing a movie this weekend (or seeing more than one movie) and people who don’t regularly go to the movies have the option of turning up at the theatre and buying a ticket.

Every weekend, between 15 and 30 million people in North America buy movie tickets, which is about 5 to 10 per cent of the population.  The people you see in theatres this weekend are a different set of people from the ones who saw a movie last weekend.

Here’s a chart of the total box office for each weekend in 2011.  You can see there are some huge peaks in summer, while other summer weekends weren’t that much better than your average spring weekend.

The market is expanding when there are movies people want to see – like Hangover 2, Transformers 3, Harry Potter 8 and Twilight 4 – and contracting when there are movies that audiences are less excited about.

But wait - all of those peaks are on major holiday weekends.  Isn’t the market expanding because audiences go see movies on Memorial Day, July 4 weekend and Thanksgiving?

Well, here’s the chart with 2010 box office. 

This tells quite a different story from 2011.  There are some huge peaks in spring thanks to a huge President’s Day weekend, Alice in Wonderland and Clash of the Titans. Memorial Day was a disappointment with Prince of Persia and Sex and the City 2.  The weekend box office topped $250 million only once, with the release of the third Twilight movie, compared with three times in 2011.

The moviegoing audience expands when there are movies they want to see, as it did in spring 2010, and it contracts when they don’t want to see the movies that are out there, like in early summer of the same year.

We also see how the moviegoing audience expands when there is more than one movie that audiences want to see.  This last weekend, with Ted, Magic Mike and Madea’s Witness Protection opening and Brave’s second weekend is only the most recent example.

Just three weeks ago, both Prometheus and Madagascar 3 opened over $50 million.  That was a bigger 3-day weekend than Memorial Day weekend.

In April, Think Like a Man exploded with a $33.6 million opening weekend and The Lucky One still managed a $22.5 million opening.  Both were way above expectations.

Back in February, The Vow and Safe House both took over $40 million each, with another $27.3 million for Journey 2 and $22.4 for the 3-D re-release of Star Wars Episode 1 that same weekend.

And these are only the examples from the first half of 2012.

When you look at the number of times this happens, it’s pretty clear that opening weekends are not zero sum games.  One more person buying a ticket to see Ted doesn't mean that it's one less person seeing Madea's Witness Protection.

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