OPINION: Box office boon
By Paul Sweeting -- Video Business, 3/13/2009 1:47:00 PM
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That is: whether the downturn simply mirrors the general contraction in consumer spending since the onset of the current recession and will reverse itself when the economy improves, or if we’re seeing some fundamental shift in consumer behavior away from buying movies on DVD.
Time Warner emphasized the downturn’s cyclical quality in its fourth-quarter earnings call in January, while Walt Disney Co. CEO Robert Iger suggests we’re witnessing a more permanent change in behavior.
20th Century Fox parent News Corp. said in its last earnings call that it’s too soon to tell.
Maybe not for long, though.
The recent, unexpected surge at the theatrical box office could provide the industry an opportunity to observe a rare natural experiment.
Through the first two months of the year, total U.S. ticket sales are up 17% compared to the same period in 2008.
Ticket sales in February, according to Box Office Mojo, totaled $770 million, the biggest February gross take ever for the industry.
While some of the pictures in release during the period, such as Warner Bros.' Watchmen, were expected to be hits, others, like Fox’s Oscar-winner Slumdog Millionaire and Sony Pictures’ Paul Blart: Mall Cop have outperformed anyone’s expectations.
The prevailing theory in Hollywood and in the board rooms of theater chains is that, amidst the deepening economic gloom, people are turning to escapist fun in movie theaters even as they scale back their spending on other—often pricier—forms of entertainment.
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