DVD, DVR and HD Blamed For Decline in Cinema Attendance

The DVD player--the fastest-selling consumer electronics product in U.S. history after cell phones--is being blamed in part for one of the worst summer seasons at the American cinema in years. The DVR, too, hardly ubiquitous yet but apparently widely used once it's inside the home, and even HD--again, with only limited rollout--are also cited by some film exhibitors for why people are staying away from the local multiplex in droves this summer.

Several motion pictures have done rather well at the box office for their opening weekends, only to drop off faster than usual in latter weeks. With the lone exception of the final "Star Wars" episode released several weeks ago, whose U.S. take approaches $400 million, there have been no break-out hits or sleepers--let alone anything else approaching blockbuster status--this summer compared to previous years.

Apart from the concession stand, theater chains make their profits from films that can sustain themselves for several weeks' running. On the other hand, Hollywood is said to not be overly concerned about a disappointing box office since studios often make up for it in DVD sales and rentals of the same films a few months later. (Some movies now make far money more in the DVD realm than in theaters. And some films, including some Disney theater-movie sequels, go straight from Hollywood to DVD.)

Published reports this week quote movie industry execs as claiming that while people still love the experience of watching motion pictures, they're increasingly doing it from the comfort of their own homes, encouraged by increasingly sophisticated entertainment systems that include larger screens in 16:9, with 5.1 surround sound. One investment banker told The Washington Post that "people still want to go to the movies, but HDTV and DVR and DVDs have siphoned off customers somewhat."

Other industry observers also point out that many cinemas are now charging $8 and up a ticket for evening show times, which is about twice the going rate of renting a DVD of the same movie a few months later for unlimited viewing over a week's time, by as many people in a household (or college dorm) as care to see it.

As new HD sets, next-generation DVD discs and DVRs steadily become standard hardware in the home, major theater chains--such as the newly merged AMC and Loews properties--will have to better entice customers where theaters still hold some advantage: huge screens, stadium seating and unmatched sound systems. And producing movies that large numbers of people can't wait to see on DVD might not hurt, either.