Nielsen Analytics and The Movie Advisory Board Release New Study on 'The Modern Movie Experience'

Nielsen Analytics and The Movie Advisory Board Release New Study on 'The Modern Movie Experience'

Analysis Examines How Changing Consumer Attitudes and Digital Technologies are Affecting Box Office Returns

First in a Series of Reports from Nielsen Analytics to Investigate the Impact of the Uber-Media Consumer

HOLLYWOOD, June 13 /PRNewswire/ -- Nielsen Analytics, part of VNU's Media Measurement & Information division, and the Movie Advisory Board, a joint initiative between Nielsen Entertainment and MovieTickets.com, today released The Modern Movie Experience, a new study that explores how shifting consumer behavior and digital technologies are affecting the theatrical film business. The analysis is the first in a series of reports from Nielsen Analytics examining "uber-media consumers" -- the most avid users of media on multiple platforms -- and how they are driving change across the entertainment industry.

The analysis was based on a survey of more than 2,500 moviegoers nationwide. It concluded that, while recent declines in motion picture attendance are due largely to a perceived disconnect between the price moviegoers pay, both in money and time, and the value they derive, an equally important challenge to the movie industry comes from new forms of digital distribution. Key findings include:

* Despite concerns about the potential for new technologies to disrupt
traditional business models, the primary reasons given by respondents
for the drop in movie theater attendance all relate to a new equation of
decision-making for the moviegoers. Paying attendees assess movie
quality, price and the cost of their time as they decide whether to see
a movie outside of the home.

* The more avid a moviegoer, the less of an impact experimentation with
non-theatrical distribution platforms has on moviegoing; and conversely,
the lighter the moviegoer the greater the impact.

* Moviegoers who attend films in a traditional theater setting more than
five times a year were less likely to have downloaded, rented or bought
a DVD or VOD than lighter moviegoers.

* However, moviegoers who attend films in a traditional theater setting
more than five times a year rent more DVDs on an annual basis than
lighter moviegoers.

"Although the ebbs and flows in the fortunes of the movie business are nothing new, the forces currently buffeting the industry are raising fears of a fundamental and lasting sea change," said Larry Gerbrandt, general manager and SVP of Nielsen Analytics. "By focusing our research on the 'Uber-Media Consumer' - or those at the forefront of change in media and entertainment consumption who are uniquely faced with abundant choice - we aim to provide new insights into where such change may lead the media industry, as well as how the industry can best respond and adapt."

"The shared experience of movies is starting to feel anachronistic with increasing abundance of choice and control," said Adrienne Becker, GM Nielsen Entertainment's Strategic Development Group. "But as the motion picture industry turns to digital distribution, all players have an interest in identifying and developing the levers of sustainability for that shared experience. This analysis focuses on some areas which need to be re- calibrated, and at the same time, highlights the point that elements of community - such as the theatrical experience - will not go away; but we will have to work at it."

Report Findings: Moviegoing, Digital Distribution and Windows

"The Modern Movie Experience" provides an in-depth look at recent trends and metrics among changing moviegoers, specifically the moviegoing experience, the impact of digital technologies, and the simultaneous distribution of movies across multiple windows of exhibition. Among its principal findings:

* Among those who said they attended fewer movies this year than last
year, the top reasons given were that the quality of movies are
disappointing, ticket and concession prices are too high, and most
interestingly, their lifestyles have changed.

* All varieties of moviegoers appear to be willing to try and buy movies
across multiple platforms; therefore the fine tuning of windows can have
either a cannibalistic or expansive effect on revenues depending on each
consumer's prior affinity for moviegoing.

- Fifty-three percent of respondents said they would still go to the
theater and not skip theatrical releases if a movie was released in
theaters and on DVD simultaneously.

- Another thirty-six percent said they would skip theatrical releases
altogether and rent the movie on DVD instead if a movie were released
on both platforms simultaneously.

- Twelve percent said they would go to the theater but not buy the DVD.

* Because of their lack of commitment to the in-theater movie experience,
and lack of passion for moviegoing in and of itself relative to other
age segments, younger movie consumers (18-24) possess the greatest
threat to the exhibition community and the greatest opportunity for
those involved in emerging platforms of film consumption.

* The respondents who are most susceptible to alternative forms of movie
consumption, driven by new technologies and subsequent changes in movie
distribution windows, are those who attend films 1 - 5 times a year.
Lighter moviegoers were more likely to have downloaded, rented, or
bought a DVD or OnDemand movie than heavier moviegoers. According to
the survey, 18 percent of moviegoers have already downloaded at least
one full-length film.

* Those who go to movies most often (10 or more times a year) are less
likely to be swayed by changes in movie windows or delivery platforms as
they are passionate enough, and therefore more committed, to moviegoing.
But attempts to compensate for box office declines by raising ticket and
concession prices will hit this same group the hardest.

* At a time when movie theaters face growing competition for audiences'
time and dollars, the quality of the moviegoing experience is becoming
increasingly important. Every effort needs to be made to manage all
aspects of the theatrical experience - from the consumer's point of view
- which are tractable. Respondents overwhelmingly indicated that they
select a movie theater based primarily on two factors - a wide selection
of movies, and a clean and comfortable setting from which to watch them.

In the age of consumer as entertainment programmer, respondents also provided new insights into how digital distribution platforms are influencing their movie-watching experience. Highlights include:

* Nearly half of moviegoers reported "frequently" purchasing the DVD of a
film they saw in the theater. This number jumps to 83 percent when
those who indicated they "sometimes" buy the DVD of a film they saw in
the theater are included.

* Conversely, only 13 percent of respondents said they frequently rent the
DVD of a film they have already seen in the theater.

* More than half of respondents have ordered movies through VOD services,
having ordered an average of 4.3 VOD movies in the last twelve months.

* Digital projection presents opportunities to expand film theater
offerings to include both new movie and non-movie experiences, but
perhaps the greater opportunity is using digital capabilities to better
serve the traditional film customers, employing content that is more
relevant to the particular audience members based on their demographics
and preferences.

Methodology

The "Modern Movie Experience" study was based on a survey designed by Nielsen Analytics and Nielsen Entertainment that was completed by 2,687 members of the Movie Advisory Board (MAB) between Feb-March 2006. The MAB is a moviegoer community comprised of consumers who either buy movie tickets online or who search for movie information online, formed from a partnership between Nielsen Entertainment and MovieTickets.com, a leading Internet movie ticketing service.

The survey oversampled some of the movie industry's best customers, with 70% attending a movie 10 times or more over the past 12 months. According to the National Research Group's (Nielsen NRG) Benchmark Study, this compares with an average of 6-7 movies seen per year among a national sample of moviegoers, versus about 8 in prior years. Additionally, 52% reported attending movies very often or often on opening weekend. What's more, many of these same moviegoers also are technology-savvy consumers, making them prime targets of competing media, such as DVDs, videogames, iPods, On Demand, time/place shifting services and the Internet.

"The Modern Movie Experience" analysis will be available for purchase on Wednesday, June 14, 2006. Orders will be taken on-line at www.movieadvisoryboard.com/store, or by sending an email to NielsenAnalytics@vnuinc.com, or by calling Nielsen Analytics at 323.860.4659. For a limited time, this analysis is available for $2,995. (U.S. Dollars).

About Nielsen Analytics

Nielsen Analytics is focused on creating leading edge research, analysis, strategic advisory and valuation services to companies in the media & entertainment space with a particular focus on the convergence of content delivery and consumer media technology-and the underlying economic models in the television, motion picture, cable, satellite, music, home video, video game, mobile entertainment and publishing industries. Its products and services consist of custom strategic consulting, valuation services, white papers, research reports and thought leadership.

Nielsen Analytics utilizes the full portfolio of sister companies including Nielsen Media Research (television ratings), Nielsen Entertainment (motion picture, home video, music and interactive entertainment), and Nielsen//NetRatings (Internet usage) to deliver a whole media point of view. Nielsen Analytics is part of VNU (www.vnu.com), a global leader in information services for the media and entertainment industries.

About Nielsen Entertainment

Nielsen Entertainment was formed in 2003 to bring together the best individuals, methodological practices and data collection resources across the world. Through custom research, consulting and the most comprehensive network of entertainment measurement systems, Nielsen Entertainment delivers Actionable Entertainment Intelligence to clients engaged in the business of selling entertainment and trading in the marketplace of our popular culture.

Nielsen Entertainment is comprised of the following businesses: National Research Group (NRG), Independent (NRGi), EDI and EDI International, Television Services, SoundScan, Broadcast Data Systems (BDS), Music Control, VideoScan, Market Navigator, Mobile, Live Events, BookScan, BookData, and Interactive Entertainment, and utilizes the full portfolio of sister companies including Nielsen Media Research and Nielsen Net Ratings to deliver a whole media point of view. Nielsen Entertainment is part of VNU (http://www.vnu.com/), a global leader in information services for the media and entertainment industries.

About the Movie Advisory Board

The Movie Advisory Board (MAB) (www.movieadvisoryboard.com) is a joint initiative between Nielsen Entertainment and MovieTickets.com, a leading Internet box office. MAB is a community of moviegoers who either buy movie tickets or search for movie information online and who have elected to participate in a variety of market research endeavors. Some of the MAB services include moviegoer demographic reports, national exit services, online behavior analyses, windows tracking, time targeted mobile polling and advertising/media effectiveness. MAB affords clients the ability to both observe and converse with moviegoers, before and after a moviegoing decision, as well as the ability to match what the consumer reports doing, with actual behavior.

Source: Nielsen Analytics

CONTACT: Nielsen Analytics - Karen Gyimesi, +1-646-654-8631; Nicholas
Covey of the Movie Advisory Board, +1-323-817-1958

Web site: http://www.movieadvisoryboard.com/
http://www.vnu.com/

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