Study Shows That No, Netflix Isn't Killing Movie Theaters

from the synergistic-not-cannibalistic dept

It’s odd how conventional wisdom usually isn’t all that wise. For example the entertainment industry for years has proclaimed that piracy was killing numerous business models, despite record profits and a steady parade of studies showing that pirates routinely buy more legit content than their non copyright-infringing counterparts. The entertainment industry willfully ignored for years (and often still does) that many of these users were engaging in copyright infringement because owners and distributors were failing to provide this content at a reasonable price via legitimate means.

The chicken-little argument then mutated over the years to imply that streaming services like Netflix were also killing traditional brick and mortar movie theater attendance. That, too, simply isn’t true.

For example, a new study by EY?s Quantitative Economics and Statistics group (funded by the National Association of Theater Owners) found that young people that stream a lot of content at home are also more likely to go see movies in brick and mortar theaters, showcasing how different methods of media consumption are complementary, not automatically cannibalistic. More specifically, the study found that users who visited theaters nine times or more in the last 12 months consumed more streaming content than consumers who visited a movie theater only once or twice over the past year:

“The message here is that there?s not a war between streaming and theatrical,? said Phil Contrino, director of media and research at NATO. ?People who love content are watching it across platforms and all platforms have place in consumers? minds.?

This study also showcased how claims that young people specifically don’t go to the theater because they have more choices and a better experience at home (as if that would be such a bad thing in the first place) aren’t true either. In fact, the study found that survey takers between the ages of 13 to 17 went to a mean of 7.3 movies and consumed 9.2 hours of streaming content — notably more than any other demographic. The lesson, again, is that most media consumption sources are synergistic, not cannibalistic. That said, the study does try to suggest that there’s an area where home streaming is having a notable impact, and that’s on traditional TV and the rate of cord cutting:

“There?s data to suggest that one way they?re cutting costs is by cutting the cord. The number of consumers who have ever cancelled cable or other pay-TV services in 2018 is projected to climb 32.8%, to 33 million adults, according to recent estimates from research firm eMarketer. Contrino said he thinks that?s where streaming?s influence is clearest. He argues its upsetting the balance in the home entertainment space, not in the theatrical realm.”

But even here there’s a number of reasons that people are cutting the traditional TV cord (apocalyptically bad customer service, high prices) that has nothing to do with them having more options. The traditional cable industry could also operate synergistically with the rising tide of streaming options if they were simply willing to compete more seriously on price and listen to consumers. But here too, entrenched industries would prefer to hyperventilate about the end times instead of simply realizing there’s still ample money to be made all over if you’re willing to be competitively flexible and adapt to voracious appetites.

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Companies: netflix

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Comments on “Study Shows That No, Netflix Isn't Killing Movie Theaters”

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49 Comments
Anonymous Coward says:

The phonograph didn’t kill the symphony hall, the microwave oven didn’t kill restaurants, Netflix isn’t killing movie theaters.

It’s almost as if despite being able to do things at home conveniently and cheaply, the experience of going out cannot be sufficiently replicated and still (and will continue to) provide lots of value to consumers.

cpt kangarooski says:

Re: Re:

On the other hand, the moving pictures did kill vaudeville and home video largely killed off porn theaters with the Internet killing off the adult sections of video stores, and digital cameras killed off the chemical film industry (minus a tiny handful of hold-outs)

Sometimes this kind of thing does happen.

PaulT (profile) says:

Re: Re: Re:

That’s true, but the key is what people feel is superior, or the experience is good enough to do both.

People who go to live shows will often do both things, and may prefer the live experience. Most people will use a microwave for convenience, but believe that restaurant food is better. Netflix is great, but doesn’t have the blockbuster selection and other things that people who go to the cinema regularly may prefer.

On the other hand, the things you mentioned either offer inferior products or an inferior experience. Vaudeville didn’t just die because of cinema – it died because its stars moved to film and often got more money / bigger audiences. Porn theatres and video died because ultimately most people watching porn would rather be doing it in private without asking other people for the titles. Meanwhile, for the average consumer photo film offers zero advantages over modern digital (although some professionals and hobbyists will argue over this).

IMHO, if you’re scared that the advent of streaming video means the end of cinema, you’re admitting that they are offering an inferior experience. I don’t believe that is true, which is an opinion backed up by pointing at the industry’s own figures.

PNRCinema (profile) says:

As someone who keeps close tabs on the movie industry...

I think the survey is good news…IF it’s accurate. And to me, it’s accuracy is thrown into serious question by the fact that it was commissioned by the major theater owners group, in the way that telecom surveys funded by Verizon are questionable at best…

It reeks of NATO trying desperately to convince people that theatres are still viable. I personally think they are, but I can say this – NONE of my friends who go to the theater on a regular basis stream all that much, most of them still use Redbox for home viewing. And the ones who stream regularly rarely if ever set foot in a multiplex, although some of our areas’ smaller indie-centric theaters benefit from them more often…

Just my 2 cents…

Anonymous Coward says:

Re: Re: Re: As someone who keeps close tabs on the movie industr

why would any totally unrelated entity pay for such a thing? it happens often enough, frequently through universities and such, but if industries do not get research done on themselves… well, should they just wait until someone else does? And in the exact scope they were hoping for?

Lawny (profile) says:

I can only speak from personal experience...

…but I don’t really hear much from anyone any more about the whole ‘downloading and storing’ deal. It’s just so much easier and convenient to find a streaming service for the times when you don’t want to go out to find a film, anyway.

Not to mention most of the films I watch on, say, Netflix, are no longer even available in theaters.

Anonymous Coward says:

I don’t go to movie theaters often because of the ticket price and because I find the overall quality of movies lacking in recent years. It’s difficult for me to justify spending $6-12 for a single movie ticket when I can get a month of Netflix for the same price, and very likely be able to see that same movie eventually, or wait for it on Redbox and see it for $2. I also get a bit of buyer’s remorse when I do go to a theater and see a movie that isn’t all that great, so it makes me not want to take the risk again.

That said, for me it’s not home viewership that prevents me from going to the theater (although that’s a factor), it’s that very few movies make me think “ooh I want to see that on the big screen.”

mcinsand (profile) says:

Re: 20 $ popcorn and pop is killing movie theatres

You hit the nail on the head. If drinks and snacks were priced at market value or if they had current movie pricing with cheap tickets, then I’d be fine. However, I feel like overcharging for refreshments on top of current ticket prices is unacceptable, and I wait to see movies after they’ve left the theater by Redbox or whatever.

Stephen T. Stone (profile) says:

Re: Re:

In the tiniest bit of fairness, theatres typically sell those items at higher prices to turn a profit, since the movie studios do not take half of that specific income stream for themselves. I agree that overpriced snacks is a bad move, but theatres still need to make money, and until they can come up with a better revenue stream than $20 popcorn/soda combos, well…

¯(ツ)

That One Guy (profile) says:

Re: Re: Re: Kill one golden goose and another pops right up, right?

In a way you could say that it’s the studios and their short-sighted greed that are a much bigger threat to movie theaters. If they were willing to share the profits more evenly then movie theaters wouldn’t have to charge such insane prices for stuff like snacks, which in turn would make people more likely to go there.

GJ Guepe says:

Pirates spoil vastly more sales than non-infringers.

pirates routinely buy more legit content than their non copyright-infringing counterparts.

First, there is NO "counterpart" to pirates. It’s metaphysically absurd and philosophically repugnant, indicative of the Marxist thesis and anti-thesis framing, to cast ordinary honest people as "counter". Yeesh.

Here’s some new boilerplate which you’ll see again:

) That pirates are also among the largest purchasers. — Though may be true (since pirates are the biggest addicts to empty entertainments), it’s legally and practically irrelevant for any work that they don’t pay for, which still has no actual income. Besides that, almost by definition, any pirate will upload the work (they call this "sharing") so that others don’t have to pay. A single pirate can spoil millions of potential sales. (That point is of course never addressed in the pirate-friendly studies.)

GJ Guepe says:

Re: Pirates spoil vastly more sales than non-infringers.

potential sales

Left in from prior where apt, but sure to draw the usual gainsaying, so in hopes that pirates will stop for a moment and think, I’ll just state that at some point ALL sales are only "potential". That pirates SPOIL sales is NOT in question.

Anonymous Coward says:

Re: Re: Pirates spoil vastly more sales than non-infringers.

When I buy eggs from the supermarket, I do not suddenly owe the cashier thousands of dollars for the chickens that might have hatched from those eggs, or the eggs those maybe chickens might have laid.

Arguing potential sales is an underhanded way to demand a blank check.

Anonymous Coward says:

Re: Pirates spoil vastly more sales than non-infringers.

Do pirates pirate movies about pirates pirating things that pirates usually pirate? That sounds like a good pirate movie, maybe the pirates will not pirate that pirate movie because of your above comment condemning piracy. So listen up pirates, no more pirating .. even those movies about pirates pirating.

That One Guy (profile) says:

'And don't even get me started on those newfangled 'cars'.'

Even if Netflix was ‘killing movie theaters’… so what?

Old business models are replaced by newer, better ones all the time, that’s just how it works, so if streaming services like Netflix were supplanting previous ways to watch movies that would just be how the market has evolved.

There’s nothing so special about movie theaters that they need ‘protection’ against competition that might undercut it, and if a new service does do that oh well, that’s just how it works.

Johnny Shade (profile) says:

Theater vs. Streaming

The only reason I go to a theater is for an experience, not necessarily the movie in question. My wife and I tend to go to Alamo Moviehouse to have dinner and watch a good movie. Don’t have to cook or clean afterwards. They are strict about cellphones. Worth the money. Most theaters still seem to be locked into the old models of how customers want to experience the movie.

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