People still want the TV and movie experience offered by traditional studios, but social platforms are becoming competitive for their entertainment time—and even more competitive for the business models that studios have relied on. Social video platforms offer a seemingly endless variety of free content, algorithmically optimized for engagement and advertising. They wield advanced ad tech and AI to match advertisers with global audiences, now drawing over half of US ad spending. As the largest among them move into the living room, will they be held to higher standards of quality?
At the same time, the streaming on-demand video (SVOD) revolution has fragmented pay TV audiences, imposed higher costs on studios now operating direct-to-consumer services, and delivered thinner margins for their efforts. It can be a tougher business, yet the premium video experience offered by streamers often sets the bar for quality storytelling, acting, and world-building. How can studios control costs, attract advertisers, and compete for attention? Are there stronger points of collaboration that can benefit both streamers looking to reach global audiences and social platforms that lack high-quality franchises?
This year’s Digital Media Trends lends data to the argument that video entertainment has been disrupted by social platforms, creators, user-generated content (UGC), and advanced modeling for content recommendations and advertising. Such platforms may be establishing the new center of gravity for media and entertainment, drawing more of the time people spend on entertainment and the money that brands spend to reach them.
Our survey of US consumers reveals that media and entertainment companies—including advertisers—are competing for an average of six hours of daily media and entertainment time per person (figure 1). And this number doesn’t seem to be growing.2 Not only is it unlikely that any one form of media will command all six hours, but each user likely has a different mix of SVOD, UGC, social, gaming, music, podcasts, and potentially other forms of digital media that make up these entertainment hours.
No one is pointing out that this was inevitable result of having more options.
When I was a kid, sure we had TV and video games, but they weren’t much. There was no big library, all the better graphics games were recent, and realistically you got a few games a year.
Me and my friends went to the movies cause there honestly wasn’t much better things to do. Having a home theatre meant having a tiny screen and a handful of movies you’ve seen many times if you happen to have a VCR. TV reruns were super old and had 5 mins of ads every 15 mins.
Did they really expect teenagers to be desperate to see a new flic when it’s no longer the only way to see new content?
Let’s not forget cost, either. Most movies back then, even in a theater, were dirt cheap. A summer job or allowance would be enough to pay for a movie, popcorn, drink, and you’d still have plenty leftover for arcades or the mall. Some tiny theaters in small towns would be a dollar or less for admission.
Now? You’re talking $20+ per person for the same experience. Why would anyone spend that kind of money, when that’s three or more hours of work at minimum wage?
I think that’s an issue with whatever State / jurisdiction you’re in.
When I was a teenager it was ~$12 to get a normal (non-VIP ticket) at the big multiplex and minimum wage was $9.50 / hr.
Nowadays it’s $20 to get a normal (non-VIP ticket) at the big multiplex and minimum wage is $17.50.
Literally almost identical, if anything it’s actually slightly more affordable now. I think what you’re describing is entirely an issue with your state government not making sure its citizens are paid fairly, not an issue with the movie theatre industry and their pricing.
You young’n. 😉 I’m talking about when minimum wage was, like, $5 and movie prices were $2.50 or less.
But let’s take your example. I’m willing to accept the premise that movie prices have kept pace with wages (they haven’t, due to the varying pay standards you pointed out, but I’ll assume for the sake of argument). What stays relatively consistent are costs like food. Excepting the turmoil of the current US economy, those $20 would go further towards food and other necessities.
So theaters are no longer vying for discretionary income at a few dollars here or there, they’re directly competing against necessary expenses. They’ve priced themselves into a different market, and the idea that they’ve kept pace with wages is too simplified, the way I see it.
As a side note, I would love to see an economist study this. It seems really interesting.
Yes, but the point is that movies are primarily made in California, so if California raises its minimum wages, then the cost of making movies goes up, and so the cost the consumer would experience at the end is increased. If you live in California and your government increased minimum wage that’s not a big deal, but the issue is arising because some states haven’t raised minimum wage to keep up with inflation, so consumers there see a real cost increase that California consumers don’t.
But at a fundamental level, the problem there is not with California raising their minimum wage to try and keep up with inflation / cost of living, but with the other states for not raising theirs. Those states are effectively artificially lowering labour costs, which makes their consumers pay effectively more for imported goods, so that businesses in the state can be more profitable.
If a state does that to support home grown businesses that keep profits in the hands of workers, that can be a path for establishing an industry that will sustain itself and enrich the state, but in most US states, the companies that benefit are big corporations that funnel the profits to the executives and investors (often out of state) rather than average people, so the average worker is just poorer for no reason and sees inflated costs everywhere.
But yes, overall I generally agree with you that the increased costs people are complaining about are real, just that those costs aren’t the result of the movie industry being greedy, so much as they’re the result of the state level governments and corporations that campaign against minimum wage increases.
I like the way you think
Same can’t be said for the snacks though. Highway robbery, I tell ya.
I don’t have historical pricing on movies theatre snacks available off hand, but I would be willing to bet money their pricing is 100% consistent with what it was 15-20 years ago as well.
Movie theatre popcorn and drinks have always been over priced (at least in my lifetime) and have always been where theatres recoup a ton of costs.
If anything, these days theatres shouldn’t have to charge quite as much for popcorn now that they can make money selling alcohol and food and such as well (at least where I’m at, you can now buy beers and cocktails at the theatres).
Because this isn’t research, its Deloitte selling itself. Obviously, as newer forms of media eclipse the current access means of film and television, the newer generation is going to find itself interested.