Secular Decline in the Movie Business

S&P’s biannual Movie and Entertainment Industry Survey came out last Friday, and it’s the financial chronicle of an industry under crushing change and in secular decline. Here are some excerpts from a Hollywood Reporter article:

Preliminary estimates from Adams Media Research found
a third consecutive year of declines at the boxoffice in North America,
with a 6.2% dip in boxoffice receipts to $9 billion for 2005.

A problem plaguing studios and exhibitors is increased
competition for consumers’ attention from emerging media platforms, the
S&P report pointed out.

… “The movie business is in the midst of a transition,”
Amobi said. “We believe declining theater attendance could be a secular
trend. Additionally, flattening DVD sales, rapid technological
advancements and evolving consumer habits are forcing movie studios to
reinvent traditional business models.”

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Comments

  1. konaman says:

    Excellent article in the NY post which reflects the broader theme: “Viacom – After the Split, WHere is the Value for Shareholder.” Big media simply doesn’t get that their current business model is dead. Note the “study” claiming people who have DVR still watch commercials………that is me scratching my head! Interestingly we see little to no private equity action in the space as valuations continue to perplex. I suspect Disney may be onto somehting with the free content online, but we are destined for a renewed content versus distrubtion argument, only this time maybe the Bells and their wireless like will finally have their day in the sun. Good hunting….