Rising Costs of Going to Movies, Improving Home Media Experience are Major Factors in Movie Audience Decline, According to New OTX Research

Rising Costs of Going to Movies, Improving Home Media Experience are Major Factors in Movie Audience Decline, According to New OTX Research

Young Male Audience 24% Lower in Summer 2005 than Summer 2003; Movies Now Battle Digital Entertainment Options to Attract Critical Demographic

LOS ANGELES, Oct. 10 /PRNewswire/ -- OTX (Online Testing eXchange), a leading global consumer research and consulting firm, said today that new research shows rising overall costs of going to movies and the improving home media experience, which increasingly features on-demand digital entertainment options, are the major factors in the decline of the theatrical movie-going audience.

The OTX research compares moviegoers' responses to similar questions posed in 2003 to gauge how behaviors and attitudes about movies have changed over the two year period. Researchers surveyed more than 2,000 consumers who said they had seen at least six movies in the past 12 months.

Consumer attitudes about the quality of theatrical movies did not change. Most believed that the quality of movies remains relatively good. But the most commonly agreed to statement among consumers was that "with the price of tickets being so high, I'm more selective about which movies I see (in the theater) than I used to be."

"Consumers are saying that when they get to the theatre what they see there is as good as it's ever been," said Shelley Zalis, Co-Founder and CEO of OTX. "But the rising cost of tickets, gas and babysitters, combined with the improving nature of the in-home media experience are major factors keeping consumers from leaving the living room."

Overall 35 percent of moviegoers reported seeing fewer films this year than in the previous year, compared to only 27 percent who reported seeing more. The consumer perception driving this box-office decline is the feeling that "it has become too expensive to go see a movie at the theater." Another key factor is the perception that, "the perceived waiting time for a DVD/VHS to be released after its theatrical run has shortened."

Costs and the increasing competition from in-home entertainment had its most dramatic impact on the most prized movie going audience -- males 13 to 24 years of age. In the summer of 2005, male moviegoers between the ages of 13 and 24 reported seeing on average about 24 percent fewer films than they did in 2003.

Primary factors contributing to the growing absence of young males in theaters in 2005 include:

-- Lack of appealing, targeted content: In 2003, 60 percent of males under 25 said "there was an excellent selection of films to choose from." That number dropped to 35 percent in 2005.

-- DVD consumption: In 2003 this group reported watching an average of 30 films on DVD/VHS. That number soared to 47 in 2005.

-- Videogames and the Internet: This demographic also shows a rising interest in home-based entertainment options: 62 percent now regularly surf the web, 53 percent Instant Message with friends, and 53 percent are now playing console video games (Playstation, Xbox, Gamecube, etc.).

"The perception among young male moviegoers that there wasn't much to see this year was a difficult barrier to overcome, regardless of price," said Vincent Bruzzese, Senior Vice President, Entertainment Research of OTX. "But this demographic, more acutely than any other, is weighing the value of the in-theater movie experience compared to many other lower cost, more immediate and convenient entertainment options. And increasingly, young males are deciding to grab a DVD or video game to watch or play at home."

The study also identified other causes for lagging movie attendance, including:

-- Rising cost vs. value of movies: While the overall costs of going to the movies (ticket prices, concessions, babysitter, gas prices, etc.) have steadily increased, the quality of movies has remained relatively the same, according to OTX survey respondents. This suggests that the moviegoing experience has to be perceived as offering more for the entertainment dollar than other competitive options.

-- Misperception of DVD window: Roughly 40 percent of all moviegoers believe it takes under two months for a movie to go from the theater to DVD, with close to 60 percent believing that less than three months is the average length of time. (Average length of time is actually about 4 months.) This misperception, combined with concern about the cost of going to the movies, has lead many respondents to claim that it is not worth the money to go to the movies, when they feel it will be out on DVD within a very short period of time (30 percent feel this way).

-- Preference for movie-viewing in the home growing: In 2003, 79 percent of people said that they prefer to see a new movie when it is released in theaters, versus only 59 percent in 2005. Those who prefer to wait until the movie is out on DVD/VHS (33 percent) or on TV (5 percent) recorded a 17 percentage point gain from 2003. The primary reason for watching a film on DVD is the convenience of being able to see a movie 'whenever they want' (66 percent).

OTX will present the complete results of this study, "The State of Moviegoing in Today's Digital Age," to a group of industry executives and professionals this week. The company also will announce a commitment to make the moviegoer study an annual project for gauging consumer viewpoints on the movie experience and content.

The Good News -- Moviegoers continue to enjoy going out to the movies

When asked which activities moviegoers find most enjoyable, going to the movies was a close second only to going out to dinner -- 48 percent of all moviegoers choose it as one of their normal weekend activities.

The primary reasons consumers go to the movies are centered on an experience that cannot be duplicated in the home. Wanting to see a film on the 'big screen' is a primary driver for going to the movies (67 percent vs. 80 percent in 2003), using the movies as a 'good opportunity to go out' (61 percent vs. 69 percent in 2003), wanting to experience 'better sound quality' (44 percent vs. 58 percent in 2003), the whole moviegoing experience (43 percent vs. 50 percent in 2003) and 'getting to see a movie when it is released' (37 percent vs. 53 percent in 2003) are all the top reasons for wanting to see a movie in the theater, none of which can be experienced anywhere but at the movie theater. While all of these reasons to go to the theater have registered a decline over 2003, they all still remained the top reasons for going to the theater.

Survey Methodology

This survey was conducted by OTX from August 12 to August 16, 2005. OTX conducted 2000 interviews among moviegoers 13 to 54 years of age. To be qualified as a 'moviegoer' a respondent must have seen at least six movies in a theater in the past 12 months. The respondents were 50 percent male and 50 percent female in the U.S. All interviews were conducted online using a nationally representative random sample. It included many questions that were identical to a similar OTX study conducted in 2003 in order to provide a longitudinal view of the market.

About Online Testing eXchange (OTX)

Online Testing eXchange (OTX) is a global consumer research and consulting firm that has established itself as a leading provider of online-based research. The company specializes in providing innovative, cutting-edge online technology, products and analysis to the marketing, entertainment and advertising communities. OTX has developed the most innovative products available for online research today -- products that work to uncover deeper and more profound consumer insight. http://www.otxresearch.com/

Source: OTX

CONTACT: Amy Janzen for OTX, +1-917-209-6819, amy@sutherlandgold.com

Web site: http://www.otxresearch.com/

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