LAS VEGAS (Reuters) - People have historically turned to movies for a cheap thrill when times are tough, and the current economic slowdown is no exception, movie studio and exhibition officials said at an industry gathering on Tuesday.
"In the past four decades there have been seven recession years in this country and box office climbed strongly in five of those years. I am confident that our industry's growth will continue," John Fithian, president and chief executive officer of the National Association of Theatre Owners (NATO), said at the annual ShoWest convention.
"Consumers cut back on expensive purchases during recession, but also typically shift what discretionary spending money they have left to affordable activities, such as going to the movies," he said.
U.S. and Canadian movie ticket sales rose 5.4 percent in 2007 to a record $9.63 billion, continuing a recovery that began in 2006 after an industry-wide slump in 2005.
But the rise was due to higher ticket prices as domestic theater admissions -- the actual number of people attending -- held steady at about 1.4 billion.
Theater owners attribute the leveling off in attendance more to competition from video games and growing sophistication in home entertainment systems than to the economy.
MPAA Chief Executive Dan Glickman cited the vast job losses that have occurred in other industries due to the economic turbulence.
"Fortunately, our industry has acted in a countercyclical way," Glickman told an audience of about 2,000 movie exhibition and studio industry members at ShoWest.
MPAA members include the film and TV units of major media companies Time Warner Inc, Sony Corp, Walt Disney Co, News Corp, Viacom Inc and General Electric Co and closely held Metro-Goldwyn-Mayer Inc.
The movie exhibition industry is on the cusp of a major upgrade to digital. Several studios and the Digital Cinema Implementation Partners -- wholly owned by theater chains Regal Entertainment Group, Cinemark Holdings Inc and AMC Entertainment Inc, which together operate more than 14,000 screens -- are close to a $1.1 billion financing deal to deploy digital technology in cinemas.
Access Integrated Technologies Inc on Tuesday said four studios -- Disney, Fox, Paramount and Universal -- made deals to provide movies to up to 10,000 digital cinema systems.
The ultimate aim within the industry is to transform all 125,000 screens worldwide to digital projection, and many hope to add 3-D capabilities.
"The industry's move to 3-D will benefit even further in a tough economic climate because it will offer the best experience outside the home at lower prices than say, sporting and other events. In terms of piracy, you can't capture a 3-D movie on a camcorder, so I think the future is very strong," said Michael Lewis, chairman of Real D, whose digital projection 3-D technology was used in most theaters showing the wildly successful 3-D "Hannah Montana" concert film.
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