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Right in front of our eyes, Hollywood—which prospered during the Great Depression—is collapsing. How much will be left when theater chains can reopen is anyone’s guess. Right now, AMC Theaters have “substantial doubt” they can remain open, having lost between $2.1 and $2.4 billion in the first quarter of 2020.

The second quarter was not looking any better. The industry, on the whole, was seeking a federal bailout. Making matters even more difficult for reopening is the fact they will have no product, as movie production has been almost entirely shut down for months. Nothing is in the pipeline, save some animated pictures that are going straight to streaming, such as the new “Trolls” movie.

However, long before the China Virus, Hollywood and the movie theaters were in trouble. It was seen in the sales of Twentieth Century Fox’s movie studio as well as Disney. Right now, Disney is safe, with ABC and a stable of kid-friendly movies and shows that can be streamed; and Sony Pictures has the electronic giant behind it. Warner, as a subsidiary of Time, may have deep pockets, but all three had seen total attendance dropping in recent years and managed to make up for the shortfall with higher ticket prices. In 2019, for example, attendance fell 4.6%, while the average price of a movie ticket rose $9.37. 2019’s number had actually marked an increase from the 2017 low (1.2 billion movie-goers vs. 1.3 in 2019), largely because of two tent-pole blockbusters, Star Wars: The Rise of Skywalker and Avengers: Endgame, which alone accounted for $1.3 billion in sales.  Indeed, “Avengers: Endgame surpassed Avatar (2009) as the all-time highest-grossing movie at $2.79 billion.

Industry experts for some time had blamed the demise of Hollywood films on new streaming and cable services. This is certainly a component. Beneath that were two other large-scale trends that it appears Hollywood has failed to recognize.

First, and most notably, Hollywood has forsaken the great American middle class, particularly Christians and conservatives. Privately, insiders will admit to the success of many of the Christian films over the years, particularly when contrasted with their lean budgets:

  • War Room Budget: $3m, Box Office $67m
  • Miracles from Heaven (with Jennifer Garner): Budget: $13m, Box Office $73m
  • God’s Not Dead Budget: $2m, Box Office $61m
  • God’s Not Dead 2 Budget: $5m, Box Office $20m
  • Heaven is for Real Budget $12m, Box Office $91m
  • Facing the Giants Budget: $100,000, Box Office $10m
  • Fireproof Budget $500,000, Box Office $33m
  • Courageous Budget $2m Box Office $34m
  • I Can Only Imagine Budget $8.7m, Box Office $86m

These nine films were made for a combined budget of $44.8 million (an average of under $5 million) and have returned $476 million for a return on investment of 10.62%. If one assumes that all the same people saw all nine movies (unlikely) it still means that each film was viewed by about six million viewers. These are almost exclusively Christian viewers.

Consider that Donald Trump got elected by almost 63 million votes. That would mean that if only one-third of Trump voters saw a movie—or 20 million viewers—and you subtract the Christian audience of about six million, then there is an “overflow” of unserved viewers to the tune of 14 million. That is, there are 20 million Christian and secular “conservatives” who would constitute a movie-going public for films that did not mock their views or inundate them with veiled jabs. This is an audience that can be addressed, one that can be lured back to theaters and one that would make a fairly reliable base for virtually all “family-friendly movies.

Now consider a second factor that apparently the film industry has missed . . . or ignored. According to Jean Twenge’s study of kids born after the year 2000, iGen, the iGeners are quite different from the Millennial’s (and certainly the Boomers) at the same point in their lives. They mature much later in most ways: they date, on average, a year to a year and a half later; they have sex later in their adolescence; they don’t learn to drive until about almost two years later than previous generations; and perhaps most shocking of all, they don’t mind going to a mall or hanging out with their parents in public! (Any Boomer certainly would have been horrified at this prospect).

Most of all, due to the arrival of cell phones as a necessity for the iGeners, they don’t go to movies nearly as much. (Well, that makes sense since they don’t date as much: Twenge found that iGeners will often textually “date” for six months or more before actually going on a physical date). In short, one of the most reliable groups of movie-goers, younger people, are going to be less reliable than ever as a source of revenue. This is especially true since they are far more likely than their parents or other generations to actually go to a theater. Or, put another way, the older people are more valuable as customers than ever before.

It might be worthwhile for the studios to consider the very real and painful costs of alienating up to 20 million ticket buyers and to consider making products that they would, as they used to, find attractive.

 

Larry Schweikart is the co-author of the New York Times #1 bestseller A Patriot’s History of the United States with Michael Allen, author of Reagan: The American President, and founder of the history website the Wild World of History that specializes in high-school US and World History curricula that includes student guides, teacher guides, and video lessons (www.wildworldofhistory.com).