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Business - Written by on Monday, December 8, 2008 12:34 - 4 Comments

Denis Hancock
In recessionary times, are virtual worlds the new movie theatres?

With pretty much everyone now agreeing we are at least in a recession, investors have been looking back in history to identify the types of investments that do well in tough times. Movie theatres almost always rise to the top – and I can personally say I’m betting on this pattern repeating itself again. However, I’m not entirely sure by any means, as I continue to wonder how large of an impact the Web 2.0 will have on how people entertain themselves.

What got me thinking about this again was this NY Times article about storefronts in the virtual worlds bringing in real money. It basically focuses on how people that can’t afford to buy a lot of real stuff might be shifting their time and expenditures online, opting for a selection of micro-purchases (think: $2 for Justin Timberlake’s signature Fedora for your virtual character, or perhaps just a little eBay auction action).

It makes for an interesting contrast. The whole argument for movies is that it’s been a relatively affordable means of escape from your daily life, and it remains one of the luxuries people will cough up for when times are tough. But virtual worlds are another place that people go to escape, they range from free to very affordable, and importantly the entertainment they provide matches up very well with the Net Gen norms of freedom, customization, etc… while movies remain a prime example of broadcast media.

So what do you think is going to happen? As noted, I’m betting on movie theatres (particularly in Canada, where a fairly monopolistic industry structure helps out) generating just fine returns over the coming years. However, should expectations be tempered as select individuals opt to escape to (at the extreme end) their virtual identities decked out in $1.50 pompadours? Again, I don’t want people to get too focused on this particular type of purchase (i.e. “I’m not one of those weirdos!”), but rather just about any type of “escape” and “entertainment” behavior that might involve drifting into cyberspace rather than off to the theatre… how much have times changed?


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Lauren Friese
Dec 8, 2008 18:19

While I’ve also heard a lot of buzz about movies being the big thing to do in times of recession, like you suggested, I’m not convinced it’ll be THE way to escape this time.

The big difference between spending choices in today’s economy/environment compared to the environments that existed in previous hard economic times is CHOICE, the increasing availability of low-cost, high-end alternatives, and the increasingly available FREE option.

Buy a magazine for $5, or read all of its contents online…for free?

Purchase a starbucks coffee, or use the high-end (low cost) cappucino maker in the office…for free (or almost free)?

And in the case of movies… Go to the theatre and pay $10-$20, or watch a practically new movie on your massive flat screen tv/computer monitor…for free?

Dec 9, 2008 5:11

I don’t think possibile ‘escape’ to the recession in this way, even for entertainment.

Sure internet is alternative kind of choice, not ‘necessarily’ for free.
The purchase has to offer quality.

There’s a recession, but isn’t the same thing go to the theatre (spending money) and see something on the internet, even free.

But is really things are going to change, internet will be solid alternative, good quality and right price permitting, and improving in this way.

The efforts must sight in qualitative internet evolution, absolutely: I think this is the only way to get ‘something good’.

Dec 10, 2008 5:51

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Innovation 604 Inc.
MSN: lexi606@hotmail
YM : nautipolo@yahoo.com
US Number – +1-650-200-i604
Skype – alexis.dabon

Jan 13, 2009 5:36


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