Are big-screen TVs killing the film industry?

Theaters have turned to digital 3-D to give movie fans a reason to come back to the theater.
Theaters have turned to digital 3-D to give movie fans a reason to come back to the theater.

In 2000, big-screen TVs were a luxury. Rear-projection DLP TVs produced an HD picture, but they cost a fortune and were extremely heavy and difficult to transport. Plasma televisions, on the other hand, suffered from screen burn-in that could permanently discolor areas of the electronic display. And LCDs didn't offer the picture quality of plasma sets. But what a difference 10-plus years makes. Today LCDs are the dominant player in the HDTV arena and clunky rear-projection sets have all but vanished.

But with gigantic televisions now affordable enough for most average consumers, movie theaters are now in a bit of a bind. How do theaters continue to attract customers, especially when the average movie-going experience inevitably involves paying a small fortune for tickets, and dealing with crowds and disturbances during the film? With theater-to-DVD turnarounds taking only a few months, and services like Netflix providing inexpensive ways to watch movies at home, the movie and theater industry has had to adapt to the rapid evolution of television technology that has put the movie-going model in danger.

Theaters have turned to digital 3-D -- something most TVs still don't have -- to draw in crowds and give movie fans a reason to come back to the theater. And so far, the strategy has worked -- sort of. While pricier 3-D ticket sales helped drive high revenues for films like "Avatar" and "Toy Story 3" in 2010, those higher prices might end up backfiring on the movie industry in the future [source: The Wrap]. Keep reading to find out why.

Why the Movie Industry is in Trouble

The movie industry is still making money. Lots of money, in fact. LCD TVs really took off in 2006, and every year since LCD technology has been improving and coming down in price, leading to heavier adoption of HDTVs than ever before [source: MSNBC]. During that same time, though, the United States box office upped its gross from $9.2 billion to $10.5 billion [source: Box Office Mojo]. But those numbers don't necessarily mean all is well in movie land. Overall revenue dipped slightly in 2010, despite the fact that movie ticket prices rose from an average of $6.55 to $7.89 between 2006 and 2010. While 2009 was a banner year for movies, in general the 2000s have shown a trend toward fewer tickets sold [source: Box Office Mojo].

By selling pricier tickets, the theaters have managed to keep their profits high. Higher-priced digital 3-D tickets has helped with that, adding several dollars to the average ticket price and driving sales of movies like "Avatar"  [source: Box Office Mojo]. As a short-term solution, movie theaters can compete with the living room big screen by offering 3-D movies, and the extra profit helps them make up for slightly lowered attendance. But 3-D sales trended downward overall in 2010, and certain poorly-reviewed films like "The Last Airbender" don't help build buzz for the technology [source: The Wrap]. High-profile releases like "Avatar" will likely still draw viewers to 3-D movies, and theaters will likely continue to add 3-D screens to support them. But the remains will audiences stay interested or will they start watching at home?

Why Home Theater Has an Advantage

Home theater have two big advantages over movie theaters: convenience and affordability.
Home theater have two big advantages over movie theaters: convenience and affordability. kruger

Every year, while movie theater ticket prices go up, HDTV prices come down. That gives the home theater two big advantages: convenience and affordability. At home you can watch what you want, when you want, and movies are making the journey from the silver screen to DVD or Blu-ray faster than ever. Those lower prices also apply to the digital 3-D phenomenon. That's right -- you can get 3-D TV in your home, too. That gives home theater another advantage, no matter how public opinion on 3-D changes.

If digital 3-D truly becomes a must-have part of the movie experience, 3-D TVs will grow more affordable year after year as the consumer technology improves. If it proves to be nothing but a gimmick, non-3-D plasma and LCD sets will still be around at even lower prices than the more complicated 3-D televisions. The pace of technological progression will always favor home cinema; in 2006, LCD TVs were just taking off as viable HD solutions. In 2011, many TVs now use OLED backlighting for superior image quality in dramatically thinner packages and screen sizes continue to grow while the bulkiness of TVs decreases. For example, Samsung offers a 2011 model 65-inch 1080p TV that's less than 1-inch thick [source: Samsung].

Even if theater profits are still high, lower attendance numbers could eventually become a concern. Theater attendance was down 5.2 percent in 2010; the question is, can theaters remain profitable if that trend continues [source: Box Office Mojo]? Between big-screen TVs and home theater projectors, the movie theater industry has to find new ways to draw people to the theater if it wants to keep pace with the appeal of relaxing on the couch with an endless stream of Netflix content.

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  • Frankel, Daniel. "3-D at the Box Office: Down, Down, Down." 2010. (March 24, 2011).,0
  • Reuters. "Shift to large LCD TVs over plasma." Nov. 27, 2006. (March 24, 2011).
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