Some industry analysts, including Hal Vogel of Vogel Capital Management, dispute the link between economic pullbacks and rising movie attendance. But for me, the evidence is strong:
- In 1974 and 1975, as the economy contracted 0.5% and 0.2%, respectively, after 5.8% growth in 1973, the annual box-office take rose 25% and 11% as Americans sought refuge from reality in hits like "Jaws," "The Towering Inferno" and "Blazing Saddles." Movie-theater attendance rose 16.9% in 1974 and 2.2% in 1975.
- In 1982, the economy contracted 1.9%, after 2.5% growth in 1981. Box-office takes shot up 16.4% as hits such as "E.T.: The Extra-Terrestrial" and "Porky's" offered escapes. The number of moviegoers was up 10%.
- In 2001, economic growth slowed to 0.8% from 2000's 2.7%, but box-office spending on movies such as "Monsters, Inc.," "The Mummy Returns" and "Ocean's Eleven" rose 9%. This was also the year the "Harry Potter" and "Lord of the Rings" film franchises were launched. Then, the box-office take rose 14% in 2002 as economic weakness lingered, growing only 1.6%. Movie-theater attendance went up 4% in 2001 and 11% in 2002.
All told, box-office spending went up during five out of the seven recessions or pullbacks over the past 40 years, according to the National Association of Theatre Owners. The pattern is so consistent that you can't write it off by saying moviemakers just happened to release better films.
If it is not the particular mix of films that accounts for the upswing in box office during recessions, what does? Sony's Jeff Blake suggests
"Movies offer something completely separate from what you are dealing with day to day. So they really become worth the money when money counts."
Lionsgate's Michael Burns concurs, saying
"When things are tough it is nice to be able to go into a dark theater and get lost in great entertainment, to be moved or scared and all those great things."
So weigh in if you're so inclined. Why do movies do well in bad economies? Is it the movies? The price? A desperate need to escape a stack of bills on the kitchen table?