Economist Writing Every Day

Economists talk about the ‘Covid Shock’ in 2020 because it was a mostly unpredictable event that had big, measurable effects. People spent a lot less time being in close quarters. Especially hit hard were movie theaters, and other events spaces.

In the several years prior to Covid, “Recreational Service” industry sales had been chugging along, growing at healthy annual rate of 3.4% (inflation adjusted). This category of services includes clubs, sports centers, theaters, and museums. In the blink of an eye, the covid shock drastically reduced spending in that category by more than 60%. See the graph below.

Unfortunately, we don’t have disaggregated series for the components of “Recreational Services”. But we do know that movie theaters were already well past their hay-day. Theaters had been closing and consolidating for more than a decade and ticket sales were down. Many give credit to the popularity of streaming video services and other digital media alternatives. Covid added insult to injury.

Now, going to a movie theater is exceptional. As a teenager in the early naughts, I’d go to the theater easily half a dozen times per year. Now, I don’t think that I’ve gone six times in the last five years. Real growth in the entire recreational service category has grown annually by an anemic 1.8% since 2019. It’s not dead, but that’s also the total industry. I’ve heard the news stories of sports events making a big comeback. I’ve not heard anything like that for movie theaters.

I went to the movies recently and it is not what you remember.

I owed my oldest children a date and I wanted something that wasn’t simply getting an ice cream and would be something memorable for them (remember that people don’t go to the movies anymore!). They can’t remember ever going to a movie theater.  Below is my total spend with a 6% tax rate. Before kids, I would *never* have purchased popcorn at seemingly extortionary prices. After all, a half cup of kernels fills a mixing bowl and costs a few cents. But this was a date, after all.

Let me contextualize how far the almost $50 went.

1. We went to an early afternoon show, so moods had not degraded.
2. We saw the original ‘Minions’ movie on re-release (pre-vetted by parents).
3. The movie lasted 2+ hours, including the previews.
4. We got a huge tub of popcorn to share, then refilled it for free. (Pro-tip: Bring solo cups)
5. The theater was only 40 seats or so. The seats were leather or pleather electric recliners with swivel-trays and a cup holder.
6. The atmosphere was super chill and low stress since we were half the people in the theater.
7. The kids loved every unique aspect of it. After all, they don’t have a memory of how it used to be!

I recommend going to a movie if you can replicate any substantial portion of the above details. Adding a 4^th kid would reduce the average cost even more. Of course, you could also take another adult! They might also enjoy the novelty. A decade ago, I took my wife out to see ‘Gone with the Wind’, which she had never seen, making it a memorable experience that we recall fondly.

There were some very small drawbacks related to children. This was an exciting and new experience for the kids. But it was also screen time. So, if your kids already get a lot of that, then maybe lower their dose leading up to the date. The previews are not skippable unless you walk out of the theater. So, you and your kids are a bit at the mercy of whatever content the theater owner believes is appropriate to put in front of children. They have an incentive to be careful, but judgement differs. Finally, I chose to leave the kids in the theater while I retrieved the popcorn refill. That’s a risk a took rather than haul them all out to interrupt their experience for an unknown length of time. You can make your own prudential decision.