Has the movie business finally caught the bug bedeviling so much of the media business?
Movie theaters have largely been immune to the digital virus until now. Box office revenue has, for the most part, continued to grow, even as changing media consumption habits of younger Internet-raised audiences have crippled the music business and roiled the broadcast television industry.
But it looks like the film industry is exhibiting symptoms of the same disease that brought other media sectors to their knees.
Domestic attendance plunged 5 percent last year, and continues its decline in 2011.
According to one tracking firm, pre-release data measuring audience interest in the days leading up to the release of major films has consistently been down among moviegoers under the age of 25 this year.
Two key metrics, 'intent to see' and 'self-reported,' are down 10 percent since last year and 15 percent since 2009.
With box office revenue off 13 percent through the weekend, some studio executives are quietly pondering a new paradigm in which their market no longer grows. In fact, there is some concern that the looming specter of new media has suddenly reached a tipping point, similar to the fall 2003 TV season, when the broadcast networks experienced an abrupt and very discernable decline in young-male viewers -- a group that has, for the most part, never looked back.
"We had a meeting where we sat down and told everyone to take a deep breath -- we might have to acccept the fact that our year-over-year numbers might not look right again," one pessimistic studio executive told TheWrap.
Movie attendance has slumped before, but North American box office is in the midst of a prolonged decline, steadily dropping 23 percent in ticket sales since peaking at an all-time high of 1.57 billion in 2002, according to the Motion Picture Assn. of America (see MPAA chart above).
And a fall-off in movie-going among younger demographics seems to be driving this trend.
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For instance, males and females age 12-24 bought 32 percent of the movie tickets sold in the U.S. and Canada in 2010, down from 38 percent in 2005, and from 43 percent in 1990, according to data compiled from the MPAA and the International Motion Picture Almanac.
Back in the good old days of 1975, 12-24-year-olds purchased 60 percent of all movie tickets.
According to the MPAA, the average number of movies seen by Americans and Canadians ages 18-24 declined from 8.4 in 2009 to 7.0 in 2010 (see MPAA chart below).
Is the trend accelerating in 2011?
Hard to say, but it doesn't seem to be improving, with even the hits drawing proportionally older audiences.
This past weekend's box-office surprise, raunchy chick comedy "Bridesmaids," commanded an audience that was 63 percent over the age of 30 -- which isn't unprecedented for an R-rated movie.
Two weeks earlier, however, Unversal's PG-13-rated "Fast Five" opened to an audience that was only 52 percent under the age of 25.
"For a movie like that, that number should be more like 75 percent," said a studio marketing executive to TheWrap.
Of course, it could be just the movies, or a reaction to high 3D ticket prices, or just a slump.
And this Cassandra-esque notion isn't exactly new, evidenced by an 18-year-old Los Angeles Times headline reading, "Hollywood Wants to Know What's Keeping Young Moviegoers Away."
But in 1993, the industry didn't have to worry about losing the interest of a generation raised on the convenience of Netflix, PlayStation and the iPad. If teenagers fell out of love with the power of the movies there weren't as many options available to them.
"We have failed to make going to the movies an emotional experience for them, meaning something that they invest in and get pleasure from. I think they care about content, but they don't care so much about the delivery of it," a studio marketing chief told TheWrap. "Middle-age people can chart the emotional beats of their lives through going to the movies. I do not think kids under 25 have that same kind of emotional connection with movie theaters"
Moreover, the industry desperately needs broadly appealing movies such as "Fast Five" to deliver the youth to theaters, because as several members of the cine-gensia told TheWrap, one of the major ways to keep teens returning to the multiplexes is through in-theater posters and trailers.
Losing the youth audience for even just a season, they warn, could trigger a domino effect that might further endanger the longterm health of the movie business by limiting teen and young adult awareness of younger skewing films.
But getting them back into theaters requires product, and with studios releasing fewer movies overall this year, the spring lacked mid-budget offerings such as "17 Again" or "The Watchmen" aimed at this generation. Instead, studios flooded the market with family films such as "Rio" and "Rango."
Those films that were meant to bring the age group back to theaters, such as "Scream 4," felt moldy, executives told TheWrap.
"For moviegoers this age, it's not the ticket prices, it's not streaming or piracy, it's that there was nothing they wanted to see. Studies show that low on the list of reasons people don't go to the movies are alternative forms of entertainment," Vincent Bruzzese, president of the Worldwide Motion Picture Group at Ipsos OTX , told TheWrap. "It's the product, stupid."
Some studio executives remain confident that the downturn is a momentary blip -- more the aftershocks from a lousy slate of spring movies than the first hints of a widespread shift in consumption habits.
Wait for summer, is the invariable answer, when big noisy blockbusters such as "Captain America," "Cowboys & Aliens" and "Transformers: Dark of the Moon" hit and the scoreboard will look a lot different.
However, there is a growing sentiment that even though film slates are being dramatically pared down, too many movies are still going into production that should never be green lit, and not enough films are being made for youth audiences.
"I don't want to say movies are antiquated, but they're not as interactive, as, say Facebook. They're only interactive if they engage with your emotions and what's been missing is that engagement. It's time for moviemakers to get their game on," a former senior studio executive told TheWrap.
If they don't, PlayStation and YouTube may be waiting to siphon off more potential moviegoers.
"There's more distractions today than ever before," summed up Jeff Bock, a box office analyst with Exhibitor Relations. "Generation X may have grown up going to 'Star Wars,' but Generation Y grew up playing the 'Star Wars' video game. The relationship is different."
Brent Lang contributed to this report