Going to the movies is undoubtedly a great American past time. However, in recent years, this past time has faced significant challenges due to decline in theater attendance. This decrease can be linked to the growth of technology and consumption of the Home Entertainment market. Additional threats include the increase in movie piracy, the increase in cost for the movie going experience, the excessive cost of food and other snacks, the lack of engagement for movie goers, and many other factors.
Of the threats identified above, currently none poses the harshest threat than the increase in movie piracy. The Motion Picture Association of America [1] reports that the film industry has lost over $6 billion in revenue in 2005 due to movie piracy. Of course, this piracy takes many forms – bootlegging, Internet piracy, and illegal copying. However, this threat is likely to slow in the near future as the cost to rent DVDs decreases and as movie studios begin to release films on DVD and at movie theaters simultaneously.
The rapid growth of technology for the Home Entertainment market encourages consumers to view films from the comfort of their homes. Technologies such as improved input devices (HD DVD and Blu-Ray), amplifiers, sub-woofers, HDTV or projector devices all make up a theater system that threatens the studios and theater owners.
Investors should no longer expect a significant increase in movie attendance. Instead, there will be significant increases in sale of Home Entertainment Systems.
