With a horrible year for movie ticket sales – consistently 10% below last years poor performance – Hollywood is starting to figure it out… they are beginning to comprehend that the movie-consuming public is sick of traditional, formulaic movies. The tiny documentary, March of the Penguins is a perfect example.

March of the Penguins is getting a lot of attention in the media because of its surprising numbers, but is a $10m US total really that good? It is when you aren’t spending blockbuster money to create the thing. Warner Brothers is also doing a good job of placing the story of the “surprising little film” throughout the media, hoping to further build its buzz value.

More and more, people are turning away from the over-hyped, over-produced, over-acted, under-written, blockbusters. Adults are just sick of the crap being offered up in theaters, in favor of the on-demand programming of DVRs and 900 channels. Sure, teenagers will still flock to the movie houses to hang out and catch the latest Hillary Duff movie, but even that crowd has many more options available. Their entertainment dollar is being courted by hundreds of other bidders, such as a chat at Starbucks with friends. This offers more interaction – with music, internet and the chance to talk without getting “shushed.” (And even with their outrageous coffee prices – still cheaper that popcorn and a Coke.)

Does March of the Penguins signal a fundamental change in Hollywood? Yes and no. After all the well-placed media “surprise stories,” the public will go to see the film and after watching it, will realize that there are a thousand shows just like it on satellite and cable. Long term, the film industry cannot compete without changing the cost structure fundamentally – we will no longer pay $8.00 for a ticket and $20 for popcorn and drink, just to see the same old stuff on a bigger screen. What we will continue to do however, is to see the epic films on the big screen.

Will the theater revenue model continue to work with ever-declining attendance numbers? Probably not. Corporate America does not know how to deal with decreasing revenue and because of that, there will be major shakeouts. Expect a leaner, smarter, cheaper, breed of theater to emerge – a theater that will play a leaner, smarter, cheaper, breed of film. Unless of course, that leaner, smarter, cheaper, system is already in place and we control it from our recliner.