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Netflix Isn’t Killing Movie Theaters, Study Shows

Netflix isn’t killing movie theaters. At least, that’s the take-away from a new study conducted by EY’s Quantitative Economics and Statistics group, which finds that people who go to movies in theaters more frequently also consume more streaming content. That flies in the face of the “conventional wisdom” of box office sages, who grimly ascribe flatlining theatrical attendance to the growing popularity of digital entertainment companies.

If the study’s findings are accurate, it would appear that the two forms of entertainment consumption are more complementary than cannibalistic. The study found, for instance, that respondents who visited a movie theater nine times or more in the last 12 months consumed more streaming content than consumers who visited a movie theater only once or twice over the past year. Those who saw nine or more movies at the cinema averaged 11 hours of weekly streaming compared to the seven hours of streaming reported on average by those who saw one to two movies at the multiplexes.

To get its results, researchers surveyed 2,500 respondents in November — 80% of whom saw at least one movie in theaters over the past year. The study was commissioned by the National Association of Theater Owners (NATO), a lobbying group for the exhibition industry, that has been particularly outspoken in its critique of Netflix’s decision to forgo traditional theatrical releases for movies such as “Roma” or “Outlaw King.” The streaming service has allowed a few of its movies to have small exclusive theatrical runs, but largely adheres to a policy of debuting films in theaters at the same time they premiere on Netflix.

“The message here is that there’s not a war between streaming and theatrical,” said Phil Contrino, director of media and research at NATO. “People who love content are watching it across platforms and all platforms have place in consumers’ minds.”

In fact, people who skipped the movie theaters also tended to avoid watching copious amounts of shows and films on streaming services. Nearly half of the people who said they didn’t visit a movie theater in the last 12 months also didn’t stream any online content. Just 18% of those who avoid theaters streamed online content for eight or more hours per week.

Nor does streaming appear to be inspiring some sort of exodus of teenagers. Respondents between the ages of 13 to 17 went to a mean of 7.3 movies and consumed 9.2 hours of streaming content, the highest of any age group. There was some softness in consumers between the ages of 18 to 37, however. The average for respondents in this group was six theater visits in the past year, the lowest among any age group. At the same time, they watched 8.6 hours of streaming content a week, the third most of any demographic.

The report hits as the North American box office is nearing record levels, fueled by hits such as “Avengers: Infinity War,” “Venom,” and “Incredibles 2.” Soft box office returns for 2017 battered the share price of exhibitors such as AMC and led to a general feeling of pessimism about the vitality of the sector. Those fears have been alleviated somewhat by the ticket sales rebound.

Of course, Americans have a limited amount of disposable income. If they’re shelling out for a monthly Netflix, Amazon Prime, or Hulu subscription it stands to reason they may need to economize elsewhere. There’s data to suggest that one way they’re cutting costs is by cutting the cord. The number of consumers who have ever cancelled cable or other pay-TV services in 2018 is projected to climb 32.8%, to 33 million adults, according to recent estimates from research firm eMarketer. Contrino said he thinks that’s where streaming’s influence is clearest. He argues its upsetting the balance in the home entertainment space, not in the theatrical realm.

“It’s siphoning off viewers from broadcast television and cable,” he said. “That’s where it’s being disruptive.”

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