The Box Office Indicator?

A colleague asks about the "box office indicator" of economic health/weakness:

"Do the current weak openings and poor attendance of recent movies lately mean much of anything?  I realize home theaters may be doing damage to household balance sheets as well as the desire to go out for a movie when Netflix and a widescreen TV would make do, and I thought movies did okay in recessions as people wanted to "go numb" a bit and have some entertainment."

We first looked at the issue of declining Movie Theater Attendance this past summer; We know that numerous factors — mostly non economic — were at work. Incidentally, the turnaround time for Netflix seems to be about 24 hours . . .

I asked Mike Panzner of Rabo Bank Securities hsi views on this; Mike observes:

"While movie ticket sales still seem to be in a long-term uptrend, the recent years’ decline amid strong economic growth is a development that bears watching…"

Mike whipped up this chart for us:

U.S. Movie Ticket Sales vs. GDP

click for larger graphic


Data source: Box Office Mojo, Bureau of Labor Statistics

Bottom line: The timing of this economic "tell" is probably too generalized to be of usage for shorter term traders.

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