Media & Entertainment

Netflix and Movie Theaters: A Love Story

Image Credit: Netflix

With news that a staggering 45 Million subscribers watched Netflix’s original film, Bird Box, over the holidays, media industry pundits immediately began pontificating on the threat Netflix might pose to the theatrical film business. If consumers can get high-quality first-run movies from the comfort of their own couch, why brave the costs and inconveniences of the cinema?

And, with movie theater attendance hitting a 25-year low in 2017, a narrative that draws a correlation between the rise of stay-at-home movie watching and the decline in movie ticket sales is an easy one to defend. Until it’s not.

Even as Netflix subscriber numbers continued their meteoric rise this year, movie theaters reported a banner year in 2018. Data from CivicScience suggest that out-of-home movie-going and on-the-couch streaming may have reached an equilibrium.

Movie Watching is Not A Zero-Sum Game
CivicScience has tracked movie attendance and frequency since 2012 and Netflix viewership numbers since 2014. When we look at the two trend lines, we see near-diametrically different stories.

Figure 1

Figure 2

Figure 1 above shows movie-going trends from over 1.6M U.S. adults between 2012 and 2018. You can plainly see a rise in the number of people who say they “never” go to the movies and a concurrent decline in those who say they only go occasionally. Notable, however, is how the frequent movie-goer numbers rebounded after 2015 and remained steady ever since.

Figure 2 shows Netflix usership trends among 234,000 U.S. adults from 2014 through 2018. This pattern is even more stark, as Netflix subscriber numbers climbed to nearly 60% of the U.S. population and weekly usage jumped to nearly 35%.

What these two charts seem to indicate is that, at some point, rising Netflix numbers no longer cannibalized the most frequent theatrical movie-goers. Movie enthusiasts are doing both – watching movies at home AND at the theater – simultaneously.

A Peaceful (And Beneficial) Coexistence    
It’s one thing to conclude that Netflix may no longer be harming the cinematic movie industry. But the CivicScience data can take us a step further: Netflix and movie theaters may actually be functioning in harmony with one another. Take a look at the chart below.

Figure 3

Here, we see a strong correlation between the frequency of movie-going and Netflix viewership, respectively, over the past 30 days. The more people go to the movies, the more likely they are to be a frequent Netflix user and vice versa. Makes sense, right? Some folks just love movies anywhere they can get them. As we showed in a study with Variety a year ago, some people simply love the theatrical experience, regardless of price and convenience.

More importantly, this relationship doesn’t appear to be changing over time. Here is the cross-tabulation of these same two questions during the 2017 calendar year:

Figure 4

These numbers look virtually identical to the most recent results highlighted in Figure 3. If anything, we can see that movie-going has declined – only- among people who DON’T use Netflix at all. In 2017, 42% of non-Netflix-users say they “never” go to the movies. That number jumped to 50% in the past 30 days.

The Rising Tides of Netflix
We reported a year ago how Netflix benefitted from the rise of other streaming services like Hulu and Amazon Prime Video. In short, the deeper people moved into the streaming universe – and away from linear TV, cable, and satellite – the better it was for Netflix.

We may be seeing the same phenomenon occurring now with feature films. Even as Netflix ups its game in the original full-length movie category, it may not only NOT threaten movie theaters but may actually serve to boost the overall industry and art form. Maybe sports, reality TV, music concerts, and other forms of entertainment should be the most afraid of Netflix’s rise.

Time will most certainly tell.

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