Can Hollywood Lure Consumers Back to the Movies?

What online conversations can tell us about why consumers are ditching the silver screen

It wasn’t too long ago that a night at the movies was a common and crowd-pleasing choice. Whether for date night, family night or a way to pass a rainy afternoon, a good movie has been a staple in the American media diet for decades.

But in recent years, the silver screen’s dominance has shown signs of waning. More and more, consumers opt for the endless scroll of Netflix and the comfort of their own couch over a trek to the local multiplex.

Cinema is not dead, not yet; The highest grossing movie of 2017 was Star Wars: The Last Jedi, drawing in an estimated $533 million in US and Canada. But that’s a far cry from the $2.98 billion that Netflix earned in a span of three months. In between those two figures, lies the story of the changing consumer, and their evolving entertainment preferences.  

Last summer, the US box box office suffered its worst results in almost two decades, and a 35% drop in earnings from 2016. Like every other industry, Hollywood also has a millennial problem — where the most important demographic to Hollywood, 18-to-24-year-olds, is abandoning movies faster than any other group.

We don’t have to look further than social media conversations to understand how the cinema crowd is changing. As audiences change, the market changes, but consumers drop a lot of clues about their changing behavior.

In this post we look at what the online conversation about going to the movies vs. streaming can tell us about changing consumer preferences, especially in terms of:

  • Convenience
  • Cost
  • Content

Bring the movie to my couch

Hollywood’s changed audience is a chained audience — they’re used to ordering groceries online, calling a cab on their phones and binge watching entire seasons of television shows at once.

They are sold on the ease of on-demand content, always instantly accessible on the device of their choice. For those who have already cut the cord, ditching movies doesn’t seem to be a big deal. Especially when the entertainment industry is willing to disrupt itself over for this new audience. For instance, Sean Parker of  Napster-fame is at it again, this time antagonizing Hollywood. His latest venture Screening Room is a streaming service that will allow users to watch new movies running in theaters for $50 from the comfort of their couch.

Pay-TV providers have always had to fight with the age old annoyance of   too-many-ads-on-TV. Users today are less willing to put up with interrupted content when they they can Netflix all day long without looking at the Geico gecko once.

As we can see from the chart above, “watching in bed” had the most share of voice on social among audiences.

This shift is evident in cinema’s prime audience — families. As events become harder to plan for busy family members, streaming content seems to be the happy compromise.

Give me more for my money

The convenience-of-the-couch charm of TV entertainment would be harder to resist if it also wasn’t great value for money. In summer last year, movie prices hit a record high of $8.84, spiked by releases like Beauty and the BeastThe Lego Batman Movie and Get out. That makes a movie outing for four a $40 outlay, without food. A basic Netflix plan costs $7.99 for being ensconced in your favorite spot at home — for a month.

This doesn’t mean audiences have given up on cinema completely, they just expect more bang for their buck — they want movies to enthrall them again. Maybe it’s with hot meals and alcohol service or experiential entertainment like watching a horror movie in an abandoned warehouse, or interactive movies with elements of virtual reality. It’s not that audiences won’t pay for movies, they just expect movies to be more impressive for the price.

As we can see from the chart above, the discussion around movie ticket prices have steadily risen from less than 5% in 2010 to over 30% in 2017. Audiences are always weighing the pros and cons of experience with that of convenience and cost.

Change the channel

Netflix and its ilk is the video that might kill the radio star of cinema. Even as cord cutters consider streaming to be expensive, studies show that 67% of millennials said they pay for anywhere between one to three streaming services, even if they find it expensive.

Why is it that audiences who are willing to pay up to $20 a month on streaming services are hesitant to make more trips to the movie theater? Social media conversations show that it’s about value more than cost and, today’s consumers value content that Hollywood doesn’t serve them anymore or as well.

Netflix’s chief content officer, Ted Sarandos, said the company plans to spend around $7 billion on content in 2018, up $1 billion from its spending in 2017. The company spends a quarter of its content budget on original programming for its growing subscriber base.

Netflix’s constant content churn has worked well for the company. Data shows that original content is rated higher than the syndicated stuff, averaging 3.87 out of 5. It’s not just tv shows that people are digging on the service, the most popular category on Netflix is documentaries — another cue for Hollywood.

Content distributors like Netflix and Amazon have overhauled the mid-budget and indie movie genre. In 2017, Sundance showed 119 feature films;  Netflix bought 10, Amazon Studios five. Those are by far the highest acquisition totals. They replaced Miramax and Sony Picture Classics as the power brokers of the festival.

Filmmakers feel empowered by this — with Netflix as a partner, they find a global audience, an assured paycheck and insights into consumer preferences, which only bolsters others to join this revolution.


Celluloid has long captivated minds and has been the jetpack that transports audiences to another world. However brief, the respite from the mundane humdrum was something everyone looked forward to. But are people calling quits on cinema? What else is grabbing their attention away?

Technology is upending the way entertainment is created and accessed. As content consumption goes a la carte, audiences are changing not only how they consume media but also what they consume.

Today, in the US, Netflix has more subscribers (50 million) than cable TV (48 million) and over 100 million subscribers around the globe. Will Netflix eat Hollywood’s lunch while it’s not looking?

Streaming services like Netflix and Amazon attribute much of their success to big data analysis — whether it’s to predict viewing habits, finding the next blockbuster or for improving the quality of content and experience. Can Hollywood take the cue? Movie studios do not have to look much further than social media conversations to understand their changing audiences and their viewing preferences.

For more consumer insights on media and entertainment, download the full report.


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