XplanaZine

It’s official. For the nineteenth straight week, box office receipts in the United States are below the totals of the previous year.
The present slump is the longest since analysts began tracking detailed box office figures. For the year, revenues are down about 7%, while factoring in higher ticket prices, admissions are off 10%.

Experts have a number of theories to explain the downward trends in moviegoing. Chief among these are rising ticket prices and an increase in DVD sales. A more complete list of reasons includes:

• Increased sales of DVD’s.
• Ticket prices
• The amount of free time available to families
• The poor quality of the current crop of movies
• Competition from other forms of entertainment

A couple of things are certain. New technology — in the form of DVD and gaming technologies — is certainly having an adverse effect. Also, if the actual gross revenue numbers look weak on the surface, they look even weaker when you take into account the total number of tickets sold. The number of people attending movies has dropped to a level that cannot be compensated for by the escalating prices of tickets.

What is most interesting to me is how closely the plight of Hollywood parallels that of textbook publishers. Just like their tinsel town counterparts, textbook publishers have been struggling to keep up with gross revenue totals from previous years. In an industry once blessed with yearly double-digit growth, companies are now struggling to show even modest single-digit growth and some are hoping that they will just break even. Equally interesting is the list of reasons for this sales downturn (compare this list with the one for the drop in movie ticket sales):

• Increased production and use of digital assets — Textbooks remain the center of the classroom but the Web has replaced some of the book’s traditional usefulness. In addition, the demand for digital products associated with the textbooks has driven up costs for publishers and further educed profitability;
• Used textbook sales — Used textbook sales have always been a thorn in the flesh of publishers. They have combated this loss of revenue by reducing the years in the traditional publishing cycle, by pushing the sales of e-books, and by bundling textbooks with digital ancillaries that can only be obtained by purchasing a new textbook. As textbook prices cross the ceiling of consumer tolerance, however, the used textbook market continues to be a strong enterprise;
• Textbook prices — The reality is that textbook prices didn’t become unreasonably high overnight. On average, publishers have raised prices 4% or more per year for the last decade. The steady rise in price, however, does seem to have reached a point that has evoked strong resistance by some consumers;
• Changing trends in teaching and learning – Unlike the case with current movies, no one is arguing that the products are of poor quality. The fact is, however, that the traditional textbook no longer covers 100% of the pedagogical landscape. Online and blended learning trends are expanding rapidly and these new learning solutions require new types and different combinations of learning materials than those packaged with traditional textbooks;
• Competition from new information sources — In the old days, the means of production and distribution in publishing were only available to large companies. Today, any teacher with a computer has access to the tools necessary to produce his or her own textbook or learning objects. More and more are choosing to create their own materials and, more important, they are finding ways to share their work with others. In addition to teachers, new niche publishers are also coming into play. These along with new technologies such as e-books and podcasting provide even more intense information competition for the publishers;

The parallels between moviegoing and textbook purchasing probably shouldn’t come as such a big surprise. Both are information commodities sold to large niche markets. Both have traditional peak selling seasons that can make or break a year, and both have enjoyed historical monopolies. But digital technologies and the evolving Information Age are proving to be a business challenge for big studios and textbook publishers alike. The age of the monopoly is passing away, the traditional consumer is changing, and it looks like the future portends new entertainment markets as well as new forms of learning content.