Soup Lines and Ticket Lines: Why the box office thrives even during hard times.

Jeremy Kopp
Vice President, Media Society
September 23, 2015

Everyone assumes when a recession hits, consumers immediately cease spending money on anything considered unessential. While that may be true for some excesses, individuals still want to be entertained, especially when times are tough. When the stock market reached its floor in 2009, the box office broke all-time records surging over $10 billion domestically for the first time ever.

Movies remain one industry that thrives even during difficult financial times and as a result, is one of the only non-correlating alternative investments out there. If done correctly, investing in films can provide a hedge against the recession.

What is the Appeal of Movies Even When Times Are Tough?

The appeal of films during a time when money is scarce can be attributed to the need for moviegoers to “escape” from their own problems by seeing a film. Perhaps a great rom-com or action movie can be a way for those who are going through tough times financially to get their minds into a better place for a couple hours.

Films are still the most inexpensive form of entertainment. While it is common to hear complaints of the rising cost of movie tickets, people are still willing to pay.  So far in 2015, the domestic box office is pacing last year by over 5%. Additionally, there has been meteoric growth in streaming content online. Netflix stock has shot up almost 100% this year and Amazon has risen over 70%. Recently, Apple announced its plans to enter the original content market.

Are You Interested in Making Passive Income Through Film Investment?

Diversifying your investment portfolio with passive income opportunities is a sound alternative investment strategy as it can create cash flow without the work. Adding non-correlating asset classes like the entertainment industry to your portfolio can provide an investor with income streams in good times and in bad.