The Movies and the Online Market: The Economics

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Movie theaters seem to have lost their appeal, and more and more viewers prefer online platforms. While the box office is crying, some features of the 123movies contribute to accentuatesolve the problem.

The results of the rooms

Hollywood cinema appears defenseless before the challenges of Netflix and other streaming platforms. Consumer data confirms the decline in popularity of cinemas, while some features of the industry at home provide insight into the root of the problem.

According to a report, in 2018 both sales and box office receipts in Hollywood reached a minimum in 2014. There are 86 million tickets sold in total in the year, compared to 92 in 2017 and 105 in 2016. Also, the proceeds, 555 million dollars, down 5 percent compared to 2017 and 18 percent compared to the previous year (figure 1). It seems to be a trend shared by other European countries. In Germany, the decrease compared to 2017 was 16 percent, in France on the 4th.

Figure 1

Nevertheless, France remains the country with the most cinephiles. The French see on average three films a year, twice as many as Hollywood, less than half of them (49.6 percent) say they went to the cinema at least once during 2017.

To reveal it is an Istat survey that tries to outline the profile of the average user of a movie theater. Hollywood is mostly casual viewers, only 7.7 percent goes to the movies assiduously, more than once a month.

Young people are the most loyal customers: more than 70 percent of children up to the age of 14 and 80 of young people between the ages of 14 and 24 have purchased at least one ticket during the year. With age, then, the desire to go to the cinema diminishes, as shown in figure 2.

Figure 2

In big cities, you go to the movies more often than in small towns. And the habit of attending the halls grows with the increase in the level of education (with peaks of 77 percent among graduates) and of the economic resources of the family unit. There is no difference between men and women.

Made in Hollywood cinema

If instead we look at the numbers from the point of view of production, of the 528 new releases of 2018, the “made in Italy” film industry has produced the majority (about 39 percent), followed by the US one (25.5 per cent) and from the French one (10.2 per cent); the other cinematography’s cover marginal roles. The number of films made remains rather stable over time, but public appreciation seems to have increased in 2018: Hollywood films have attracted 23 percent of preferences, a percentage that is up on 18 percent in 2017.

However, despite the higher takings of Hollywood films compared to the previous year, there is still a lot of dust that the big blockbusters let eat at home movies. In fact, with US production that alone cuts 60 percent of the tickets sold, it is foreign films that pull our multiplexes. To understand why we try to look at two key figures: the producer and the distributor.

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The Hollywood industry is dominated by pure profit logic. Film authors must find a producer to sell their script to. If the producer sees a box office success, he will buy it and take on the business risks. This leads the author to work hard at perfecting the script, often accompanied by a team from the production company.