For the third year in a row, US box office takes are down from the year before. Industry experts peg the number at 7%; however, a look at the data gives the indication that at best, it is flat. Blockbusters in 2004 like Lord Of The Rings buoyed up sales and King Kong may do so this year, but the handwriting on the wall tells us that with shortened window times (before pay-per-view distribution), they will no doubt have a negative impact on the theatre revenues in the US. Window time has reduced from 6 weeks or so in the last few years to as little as 17 days in some cases for certain movies today. The average is somewhere between 30 and 40 days now. While these shortened windows may be good for airplane movie audiences, theater owners might not be as happy. Dont feel too sorry for the moviemakers though, emerging markets like China claim increases of 50% in the theaters last year. Moreover, increased profits in pay-per-view and DVDs will probably define the next wave of movie sales and profits. Hey, what are all those home theater buffs going to watch on their $5000 investments, anyway?

Realistically, the movie scene for airlines does face some interesting competition. Even though newer movies could reach air audiences earlier, increased competition from portable IFE will be a factor unless airlines can provide really competitive entertainment. Yes, this will probably play havoc with the paid viewings, but passengers will have other options. For example, industry groups expect there to be some 15 million paid mobile TV subscribers by 2009. The video iPod craze will be in full swing soon and aircraft cellephony will be delivering more than text and music. Soon there will be better software to rip rented movies and Netflix and Blockbuster account for over 50% of US movie purchase transactions.

Perhaps airlines and content providers need to look at some of the actions that have (and still do) bug moviegoers. In the area of competition, they need to consider their customers are getting used improved home theatre quality and in the case of the declining 18 to 30-something male moviegoer, video games. Irritation factors like adverts and price will not go away. Lastly people are carrying a lot of portable entertainment electronics and airlines just have to look at the number of noise canceling headphones to see that passengers want some form of isolation and improved entertainment quality not to mention their choice of listening enjoyment.

Airline entertainment will never be a big driver in the movie world. The $20 billion dollar revenue market (or as high as $64 billion inclusive) dwarfs the $250 - $300 M airline segment but flying demographics are not to be scorned. Having said this, we must remember that the flying traveler has a higher penchant for electronic gadgets and in the future, we predict that airlines will have a harder time capturing their eyeballs.