Cinema Attendance Case Study

Cinema attendance is starting to decline as Americans have only bought nearly 3.6 movie tickets per person by the end of 2017 compared to 5.1 in 2002, resulting in a 30% decline (The Economist, p. 2). The absence of people in the theaters can be clearly be seen, since there are so many substitutes such as streaming services now. The decline of cinema attendance is a great illustration of a change in taste and preference for consumers as substitutes, like Netflix, have caused the demand for cinemas and streaming services to change. Going to the movies was a popular thing to do, but consumers’ tastes and preferences have changed. In the article by “The Economist,” it states that “Americans are losing the film-going habit as new sources of
2). With the change in preference of consumers, film studios such as Fox, Time Warner, and Universal have to rely more on international market movie sales (The Economist, p. 3). Studio and Cinemas executives have tried to gain more attendance from consumers by adding more benefits like luxuriant comforts, IMAX, and 3D screens, but they were unsuccessful at changing the consumers’ taste (The Economist, p. 4). The demand for cinemas just isn’t rising as the market has collapsed to 12 billion dollars last year compared to 25 billion dollars in 2005 (The Economist, p. 3).This shows that consumers still continue to believe the opportunity cost is high even with the upgrades that the cinemas offer. The upgrades that the cinemas are making still aren’t attracting consumer since their preference in using streaming services cost them less and give them more options. Even though it may look like cinemas are going to go bankrupt because of their streaming services competitors, they can make some other changes to attract more