Great Year for Hollywood

Scott Bowles writes for USA Today that Hollywood made more money in  2007 than in any year ever before, according to the Motion Picture Association of America. MPAA chief Dan Glickman says that studios across the United States and Canada brought in $9.6 billion last year alone. 

"While the figure is $300 million more than any other year, rising ticket prices — the average cost was $6.88 a ticket — meant attendance has remained relatively unchanged over the past three years. Roughly 1.4 billion million tickets were sold in 2007, well below the record 1.6 billion sold in 2002."

Although ticket sales were well below average in recent years, Glickman is confident in the success of Hollywood in 2007 with the rising competition from the internet and the home video phenomenon.

"Meanwhile, studios are spending more than ever to lure audiences. The average Hollywood film cost $106.6 million to produce and market, about $6 million more than 2006." With studios spending millions more on marketing films each year, why is it that the ticket sales are declining? This could be attributed to the fact that as production and marketing prices increase, so does the cost of each individual ticket, with some movies costing upwards of $15 in major markets. 

Maybe a solution to this problem would be to spend less on marketing and thus, charge less for admission. As crazy as this sounds, it just might work.