A Blog by Jonathan Low

 

Dec 21, 2018

Study: Netflix Is Not Killing Movie Theaters. Neither Are Milllennials Or Gen Xers

Streaming is not cannibalizing movie theaters. And young people are not staying at home to watch films on their smartphones.

The entertainment industry has been blaming viewership problems on new technology ever since talkies replaced silent films. Maybe its finally time to take a really hard look at pricing and content. JL


Karl Bode reports in TechDirt:

The chicken-little argument mutated over the years to imply that streaming services like Netflix were killing movie theater attendance. (But) users who visited theaters nine times or more in the last 12 months consumed more streaming content than consumers who visited a movie theater only once or twice. (And) the ages 13 to 17 went to 7.3 movies and consumed 9.2 hours of streaming content, notably more than any other demographic. The lesson, again, is that most media consumption sources are synergistic, not cannibalistic. “People who love content are watching it across platforms."
It's odd how conventional wisdom usually isn't all that wise. For example the entertainment industry for years has proclaimed that piracy was killing numerous business models, despite record profits and a steady parade of studies showing that pirates routinely buy more legit content than their non copyright-infringing counterparts. The entertainment industry willfully ignored for years (and often still does) that many of these users were engaging in copyright infringement because owners and distributors were failing to provide this content at a reasonable price via legitimate means.
The chicken-little argument then mutated over the years to imply that streaming services like Netflix were also killing traditional brick and mortar movie theater attendance. That, too, simply isn't true.
For example, a new study by EY’s Quantitative Economics and Statistics group (funded by the National Association of Theater Owners) found that young people that stream a lot of content at home are also more likely to go see movies in brick and mortar theaters, showcasing how different methods of media consumption are complementary, not automatically cannibalistic. More specifically, the study found that users who visited theaters nine times or more in the last 12 months consumed more streaming content than consumers who visited a movie theater only once or twice over the past year:
"The message here is that there’s not a war between streaming and theatrical,” said Phil Contrino, director of media and research at NATO. “People who love content are watching it across platforms and all platforms have place in consumers’ minds.”
This study also showcased how claims that young people specifically don't go to the theater because they have more choices and a better experience at home (as if that would be such a bad thing in the first place) aren't true either. In fact, the study found that survey takers between the ages of 13 to 17 went to a mean of 7.3 movies and consumed 9.2 hours of streaming content -- notably more than any other demographic. The lesson, again, is that most media consumption sources are synergistic, not cannibalistic. That said, the study does try to suggest that there's an area where home streaming is having a notable impact, and that's on traditional TV and the rate of cord cutting:
"There’s data to suggest that one way they’re cutting costs is by cutting the cord. The number of consumers who have ever cancelled cable or other pay-TV services in 2018 is projected to climb 32.8%, to 33 million adults, according to recent estimates from research firm eMarketer. Contrino said he thinks that’s where streaming’s influence is clearest. He argues its upsetting the balance in the home entertainment space, not in the theatrical realm."
But even here there's a number of reasons that people are cutting the traditional TV cord (apocalyptically bad customer service, high prices) that has nothing to do with them having more options. The traditional cable industry could also operate synergistically with the rising tide of streaming options if they were simply willing to compete more seriously on price and listen to consumers. But here too, entrenched industries would prefer to hyperventilate about the end times instead of simply realizing there's still ample money to be made all over if you're willing to be competitively flexible and adapt to voracious appetites.

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