My best guess is merchandising. Aren't toys, clothing and other movie branded swag a huge part of the final take for a property? And even though adults are the ones who buy most of that for children, the kids drive the sales. There probably isn't as much market for movie related items aimed at adults.

My guess? Dating. Young adults seek out relatively cheap opportunities to spend time together, especially in smaller communities where there aren't that many options. Movies are a perfect excuse to be in a darkened room with other young adults. Contrast that with adults (who have generally less time and are more discerning with how they spend it), movies are competing with nice dinners, live theater, live music, family events, tv, staying in, sexy times, etc.

Per the graphic, the demographic is of those who saw at least one movie in the previous year. I wonder how much the demographics change if it were narrowed to frequent movie-goers, say even just six movies in a year (averaging one every other month). I'd bet that demo would skew quite a bit younger. And the people who go to the movies fairly regularly are more valuable to the studios than the ones who go only once or twice a year. Those infrequent (one, two per year) movie-goers are probably only going to be drawn to an 'event' movie as well. I wonder too, if the Young Adult cohort is the only group that can be consistently targeted with subject matter by age. They like action, they like stories about people their own age, etc. In the adult range, individual tastes become more pronounced and stories that draw one 40-year old male don't necessarily interest another. So while you could target smaller demographics groups (with correspondingly smaller revenue potential) the largest and easiest group to target with traditional mass advertising ends up being YAs. My question is can someone (besides Tyler Perry) make smaller budget films and use micro-targeting marketing techniques to drive an audience to the theater and profit?

You can't only blame the public's consumer behavior. For example, Latinos are not only 17% of moviegoers, but they also buy relatively more tickets than other ethnicities (25%), and it's known that they pick movies that have Latino characters playing positive roles. But still if you take a look at the scripts that the white, male, straight establishment is excited about, few of them have minority characters. I'm particularly pissed with all the buzz that a certain script with a Latino villain is getting. You know, nothing sophisticated, just the super cliché and offensive Latino tough who kills people just because in the WASP's head that's what Latinos do.

Two words: disposable income. You also have the benefit of an older audience being able to relate to something geared toward a younger crowd because they've gone through the period themselves. A younger crowd, however, may feel alienated/disinterested with more mature subject matter because they haven't had any relevant experience and simply can't relate.

Generation specifics + inaccessible data + paradigm shifts. Generation specifics. The youth you refer to are right behind the Mellinial Gen/Eco Boom. They come from smaller families and were raised inside the house with electronics as playmates. They come from single-parent homes or homes where both parents work and were told to stay inside and amuse themselves. They grew up with violent video games, cable TV, and social media. They're now at an age where they have expendable income and mobility and use it to venture outside the home to something familiar -- the flat screen. They don't yet have mortgages and student loans or any other pressing financial concerns. They're used to "connecting" with friends without speaking to them and take that to the movies. Older viewers have financial responsibilities and a strong reaction to the financial uncertainties we now face. Overall spending has gone down dramatically and will continue to do so as the current tax situation digs deeper into their sense of security. They'll see a preview and ask if they can wait to see it on DVD or if it's worth the money to see it on the big screen. They also don't have the time to go to the movies. Average work week for most is around 60 hours. They'll wait and press a button to see what they want at home rather than haul it out to the theaters. Inaccessible data. The amount of money a film generates over time can't yet be counted. Netflix cancelled their Netflix Prize 2 because of the FCC ruling on privacy. We have no way of knowing who is watching what and calculating revenue. This is industry wide. Hulu, vudu, Sony, Amazon Prime and on and on data has not yet been around long enough to include those contracts in how much is made. What is known about this revenue is not yet included in a film's overall profit. I tweeted an article about this the other day. Paradigm shift. Look at the history. The first time (in modern history) audiences of all ages went bonkers over a film was with the release of Star Wars, released in 1977. Multiplexes started aggressive growth in 1970, often connected to indoor malls, and could offer multiple screens for a single movie, starting the "on demand" trend that continues. No longer were movies an event you stood in line for hours waiting to see with street performers adding to the experience. Now that has evolved to people sitting side-by-side with ear buds and watching VOD on their phones. Maybe they're watching the same film, but most likely not. Often movies are watched at work (too often). That brings us back to inaccessible data. All of those private experiences of film are not currently included in the profits of film. The paradigm shift is not represented in earnings over time. In general, there's a global financial shift towards long tail theory and we have no way of accurately monitoring revenue. The Hollywood machine is too big to respond fast enough to these changes and keeps cranking out the familiar, just as the youth keep returning to the false security of the familiar. The shift is well under way but not reflected. The studios and vendors are being squeezed, and both could disappear within 5 years. Seems impossible? Didya ever think Goldman Sacks would be a Kayser Soze? Poof.

I'm sure most of you have seen this already but EVERYTHING we've all been positing and predicting and crystal balling around here for, oh, say the past 3 years... Well kids... It's happening. Now. http://www.vulture.com/2013/07/lone-ranger-is-everything-wrong-with-hollywood.html It's one thing for a bunch of amateur to semi-pro screenwriters like us to accurately comment on the state of Hollywood but when it starts becoming accepted FACT that the system just doesn't work anymore, when everyone starts believing it to be true, when it becomes axiomatic that Hollywood is indeed BROKEN... Well. We're either entering the dark ages or the enlightenment. As Letterman used to say, "Hang on to your wigs and keys."

And I guess this leads me to inquire... Is it (or has it EVER BEEN) in Hollywood's best interest to allow reportage of their inner workings and machinations, especially when it comes to budgetary concerns and especially when it comes to box office??? Yes, there's always been some form of Hollywood press, from the scandal rags to the casual special interest stories but how does it benefit Disney to let it be known that "John Carter is wildly over budget" or "The Lone Ranger had production problems from the word go?" I suppose some of these stories are just the collateral damage/baggage that goes with generating a 'hype machine.' One could also argue that they are helpless to control stories such as these but ultimately the information has to be coming from somewhere or someone internally. Worst of all, it has turned the moviegoing public into armchair executives and turned multiplexes into nothing more than Churchill Downs, everyone waiting to see who will win, place, and show. Anyway, just something to think about...

Love this comment. The system is broken, but it's not bad news. I've been through two revolutions within the arts, and there is a pattern, even if the specifics and reasons differ. The first was with photography, and we're now in our 15th year of that revolution. The pieces have settled, but not without there being a lot of destruction first. We continue to have our stars and those who have seen new ways of managing the upheaval, as opposed to hanging on to their hats and wigs. We now have a MUCH bigger middle class of photographers producing work that is far beyond what used to be produced by the best of the best. It's long tail -- more people making less money while producing more. In terms of Hollywood, that's a pretty good deal for a lot of people. In publishing, we're still in the blood bath stage, with nobody knowing which of the long-standing publishing houses will crash (two have disappeared so far) or the specifics of where the pieces will land. But it is falling into the pattern of more people making less money than the few who were inside the old system, and an overall raising of the quality of product. New stars are rising; old stars are wondering what hit them. In both situations, we had a HUGE surge in cottage industries springing up around the breakdown of the old model. I've been away from screenwriting for a decade and have been overwhelmed by the bombardment of the cottage industries that now exist around filmmaking. In both photography and publishing, one of the biggest changes has been the loss of the middle person -- agents, managers, publicists, marketers. Those have been replaced by those in the cottage industries, or they've started working as guns for hire on a per-project basis. One author has nine agents selling her project. Only one will earn a commission. Things are looking good for the artists, but not so hot for those standing between them and their audience. You bring up an excellent point about releasing all the inside numbers. The industry needs those numbers. We don't. This change is happening regardless of the numbers or any efforts made by any party. There's no way to know the movement of each brick in the battlement, but the shift of that movement is often felt long before it can be seen moving, as those actively involved in this community have obviously been sensing for years. As you say, it's now here. From my experience in like fields, I say it's not a bad thing at all. It's a very old, very good, dynamic story filled with lots of conflict but ultimately better than what we had. One word: Phoenix.

The nice part about this revolution, Cyd, is that you and I get to enjoy franks on the grill and fireworks this holiday weekend. The execs at Disney whose signatures are on the documentation reading, "The Lone Ranger will be a great tentpole for us!" are currently hiding in their bathrooms, weeping into a balled up copy of Variety. See! Screenwriting IS a good life! ;)

Fantastic comments, everyone. Really, great analysis. Thanks especially to Cyd who has helped to put things in a meta perspective. As we ride these choppy waves, I am more convinced than ever that content creators will have -- indeed, ARE having -- a major say in how things play out. So while it's a tough time to be a writer per conventional model, it's a great time to be out on the edge living per The Spirit of the Spec. BTW check back at 6PM EDT / 3PM PDT today. Something fun I came up with yesterday that we can do NOW to take a personal stand - at least for one weekend - re all of this stuff. I actually think it's kind of clever... Again thanks, all.

What strikes me as odd is the rather remarkable stasis in the Nielsen data over the three-year period, when we know that the video-on-demand (VOD) market has changed dramatically during the same period. Consumption of VOD movie content nearly doubled between 2009-2012. (It had already doubled in the preceding three-year timeframe.*) We're looking at this form of entertainment called film or movies, based on content delivered initially at an external location in approximately two-hour long chunks. But this product and industry appears to be benchmarking against itself when it has other more challenging competition in the form of VOD. This may be one of the answers in itself as to why the industry pitches to the same market; they either cannot get a bead on VOD due to its newness and volatility, or they are blind to it. Take a look at this presentation by the American Advertising Federation (AAF): http://www.aaf.org/images/public/aaf_content/images/future%20board/Part%20III_Team%20A_FB.pdf The numbers are quite different and are extremely fluid, changing substantially over the last three years Think Netflix, Amazon Instant Video, Hulu, and YouTube as primary examples; how much have their audiences’ consumption patterns changed? The movie industry’s favorite demographic is the one most likely to watch VOD. At some point, traditional movies as currently formatted will not sync with their lifestyle. Why is it that the film industry does not appear to be targeting the audience least likely to shift? Why is it that the film industry is not encouraging development of products that are inherently more flexible in response to their current target demographic before they screen in a traditional theater? Or is the film industry relying on its traditional products aimed at young adults to continue to appeal in spite of the dramatic shift in digital delivery? This approach leaves a more mature market under-served at both the box office and at home. In theory, advertisers should be pressing the film industry to do better by women with hybridized VOD-movie products as they are the largest group of VOD consumers in terms of consumption of both entertainment and attached advertising. We can see AAF has the numbers, but we can’t yet see any shift in how financing of films may be changing in response to advertisers’ understanding of the marketplace. There’s unarticulated disparity and tension here. Entertainment industry creatives, whether attached to film or VOD, would do well to position themselves for an earthquake when the tension releases. __________ * source: http://www.pewinternet.org/Reports/2009/13--The-Audience-for-Online-VideoSharing-Sites-Shoots-Up/1-Overview.aspx

Great post. Had no idea VOD had achieved that much growth. Funny, you just don't see ANY of that in the trades, which supports your thesis: either they don't get VOD or aren't on top of it. Thanks for that link, too. Can't wait to see where we are 5 years from now. In fact maybe I'll do a blog post on that, asking people to forecast what the movie business is like in 5 years, 10 years... Again great comments, Femme_Mal. I'm forwarding this to Franklin for his observations.

From my experience working with the studios on the marketing and test screening side, it's because numbers crunchers have a ton of power. It's all about the box office. See the recent NYT article.

Thanks, Scott, glad this encourages more thought and discussion. Another tidbit popped up on my radar this morning germane to this topic. Richard Brody at New Yorker tweeted, Richard Brody @tnyfrontrow Le Monde: France has more age 50+ moviegoers than 25-. http://t.co/fRlBb5X8NB The article is behind a paywall (and I don't have a subscription to LeMonde), but the lede translates,

"The world population is aging. Inaugurated significantly in the twentieth century, the phenomenon mechanically grows. There are now 600 million elderly people in the world - three times more than fifty years ago, three times less that there will in 2050. There is no need to wait until then to see the effects of this silent revolution that is the prolongation of life in almost all fields, including culture. And, of course, in the art of representation cinema excels."

[Original text: La population mondiale vieillit. Inauguré de manière significative au XXe siècle, le phénomène prend mécaniquement de l'ampleur. On compte aujourd'hui 600 millions de personnes âgées dans le monde - trois fois plus qu'il y a cinquante ans, trois fois moins qu'il n'y en aura en 2050. Point n'est besoin d'attendre cette date pour constater les effets de cette révolution silencieuse qu'est l'allongement de la vie dans à peu près tous les domaines, y compris celui de la culture. Et, bien évidemment, dans cet art de la représentation qu'est par excellence le cinéma.] What I believe this says to us (admittedly based only on this superficial bit) is that 1) the creatives of cinema as well as the business of cinema must come to terms with the growing aggregate of aging viewers, by providing them with content that reflects their lives; 2) cinema must come to terms with big differences in audiences by country, as indicated in big data. These differences may be based on consumption shaped by technology or culture, or both, as well as the age of the audience. (The U.S. has pathetic distribution of quality broadband as compared to other countries; this may have suppressed changes to VOD consumption greatly.) Further, with regard to both the need to respond to audiences by location and to their consumption patterns by demographic, cinema’s creatives need to consider leaving a bit of "fat space" in which to negotiate shifts. By which I mean: -- screenwriters should consider the effect of scene transitions not only for traditional theater, but for optimum consumption in digital format used most frequently (i.e., smartphone, tablet, home flat screen monitor); -- editors should consider enabling two (or more) modes of consumption, optimizing scene transitions; -- technologists developing streaming formats as well as equipment and hosting should consider differentiating delivery based on consumers’ platform of choice on demand. I’m sure there’s more to this concept, but I know I cannot stand cutting into key scenes and losing my place with VOD content regardless of device used. There must be some way to ensure the content is not denigrated by changes in consumption methods, which in turn increases audience’s interest and demand for content.

:-)

I suspect that the vision of the market has not caught up to the reality. Large corporations are slow to shift perspective.

[…] "Why are the studios NOT making more movies for the largest demo groups?" by Scott Myers (Black List) on Nielsen data earlier this year for movie goers (who have attended once between 2010-2012) and how what they see compares to what studios tend to greenlight. […]