The recession-like “stimulus” of recent vintage doesn’t seem to have affected the movie business. The Thanksgiving weekend is typically devoid of tremendous or blockbuster new titles for obvious reasons. However, just like people failed to show up at the mall they also skipped the theater. As I have noted before, this is not because movies are mostly narrowly-tailored junk, as they are, but that 2014 has seen a conspicuous drop in theater revenue despite offering largely the same junk as last year.
The weekend following Thanksgiving 2014 was 20% below 2013. But we also have an almost direct comparison of “blockbuster” activity as the second installment of the Hunger Games is nearly 25% behind the first in the same number of days. Having taken in about $257 million (which is still quite good) in 17 days, the first version grabbed $335 million in the same timeframe.
Revenue over the summer was already 15% below 2013 despite having about the same number of “can’t miss” titles. Every single one underperformed every expectation. The “mystery” persists as the only plausible explanation offered is that people are staying home and watching Netflix or Amazon Prime. I think that is a big part of it, but, just as online shopping takes the bite out of holiday spending in-store, that isn’t enough for me to explain the size of these declines. Both movie revenue and bricks and mortar shopping are so far far below all expectations, as especially online spending has failed tremendously to fill the gap this year. Maybe people aren’t doing much at home either.
But with retailers extending their online deals into “Cyber Week” and even “Cyber Month,” early reports indicated shopping was less robust online on Monday compared with prior years. As of 6 p.m. ET, online sales rose just 8.1 percent compared with last year, according to IBM Digital Analytics. The figures don’t take into account the many shoppers who plan to head online after work or in the evening. But a year ago, Cyber Monday sales jumped 20.6 percent, according to IBM.
That seems to be the commonality, as shoppers may in fact prefer to stay home for more and more “activities”, but in 2014 they just aren’t acting like they have a lot of disposable income. I go back again to the track of revolving consumer credit and how much that seems to confirm marginal households using debt only as a last resort. That is not something you would expect to see in a robust economy, since debt and wages have traditionally been tied tightly together (a simple solution to the “break” in Okun’s “Law”). These are all discretionary purchases that seem to be emphasizing that there is actually very little discretion in the consumer economy.
There are a lot of variables in the movie business, including the appearance of star power and actual movies that are watchable. However, in conjunction with spending so far in the holiday season it seems as if the economy in actual dollars is yet again not living up to the hype of adjusted statistics.