Movie Theater DeclineThe number of adults who go out to movie theaters is rapidly declining. The percentage of people who would go to a movie theater in an average week in 1948 was 65%. In 2008, this number dropped to 6%. The sale of home television sets is to blame for this significant drop in movie ticket sales. In 1948, ticket sales were at 4.6 billion. Ten years later, home TV sales were so significant that theaters only sold 2 billion tickets. In 1988, ticket sales dropped to only 1 billion.

Hollywood studios have tried in many ways to get their audience back into the theater. They added surround sound, wider screens and amazing special effects for visual stimulation. They even tried introducing epic, three-hour movies. Although some movies have had individual success, the amount of tickets being sold each week was still low. The studios were forced to come up with a new way to bring in revenue at the box office. They began to introduce movies through paid advertising.

The cost of advertising movies is extremely expensive. The average price for advertising a film in 2007 was $35.9 million. Studios felt advertising was worth the high price because this initial advertising would create free publicity after the opening weekend crowd would spread the word about the film. For example, Titanic only received $28 million during the opening weekend. Two weeks later, it took in $149 million and ended up grossing $600 million at theaters in America.

Top studio executives worry about the end of word-of-mouth movies. Former Paramount Vice President Thomas McGrath said, “Word-of-mouth is no longer a factor.” He said marketing chiefs try to hit the male teen audience through advertising. They seem to be the people they can still rely on for ticket sales. They know they cannot compete with high-definition television sets and DVDs, but still continue to spend millions of dollars in advertising in hopes of a future franchise.

In addition to the high cost of advertising, the production of movies is much more costly today. In the mid-1980s, studios only had to have several hundred prints for the initial opening. Now, 5,000 to 10,000 prints are requires to open movies. Each print costs approximately $1,500. After these prints are used some are sent to military bases, but most are scrapped. Each shredded print has a small amount of silver.

On the commodity market, silver is worth at least $30 an ounce so studios recover the silver as another means of revenue. Although this only brings in a small amount of money in comparison, the studios are doing all they can to find new sources of income. This will soon be a thing of the past as more multiplexes are switching from analog to digital projection.