They say that movie theaters are losing attendance every year. And they say that one of the main reasons they think this is is because as home theaters get bigger screens, better quality, better sound, that people would just rather stay home than go to a theater. So they do. I find this bull though. This takes out of account that theater prices have gone through the roof the last 5-10 years, and that even though prices are sky high, the movie quality is going into the gutter. So it doesn’t have anything to do with the fact that people are being asked to pay more for less, it has to do with the fact that people can have nearly the same quality at home. Yeah right.
Honestly I think in general people in the United States have a special fondness for going to a movie. It is an event. American’s LOVE events. We love going out and doing things, getting out of our homes. And there is something that is nestalgic of movies too. We remember going with out parents, and we bring our kids to movies to kind of share that fun we had as youths. I think we WANT to go to the theaters, but they are doing everything in their way they can to ensure that we won’t.
My friend and I love going to the movies, and we love bringing my daughter. However, we rarely go after 5:30 as this is when they start charging higher prices. We pay $5.50 per ticket, which isn’t too bad. I think the night prices are $8.50. With my daughter we do our best to go at a noonish time as the price in our town is even lower at $4.00 a ticket. So with my daughter this means we can go the three of us for $12.00. That actually isn’t horrible. But this also limits us to just a couple movie times a day. Now sadly this is never it… we also tend to buy concessions which is where theaters generally make their money. We will buy a kid’s pack for my daughter for about $4.00, a soda for me for about $4.00 (granted I could be a 2-liter soda for $3) and a popcorn for about $2.00. This adds up to $22.00 for a movie that’ll last an hour and a half and isn’t really that great anyway.
Perhaps the reason that the industry came to the conclusion that people would just rather stay home is because of this cost. I mean it is true, you have much better quality experience at home, plus you get to pick what you want. AND if you want to see a new movie, hell you could just buy it for $15.00 these days, which leaves me $7.00 short of going to a movie. It’ll likely cost me just $5.00 more for a 12-pack of soda plus a box of 6 popcorn bags. Leaving me a number of movie watchings for $2 less than it costs to go to the theater once, plus I can pick out a much better movie than is likely in the theaters anyway.
So this gets me thinking. Why is it that it needs to be more expensive? It used to be that the theaters were the primary source of income. However, these days DVD sales are making studios significantly more money than the actual run of the movie is. I think people feel better about buying movies now more than they did in the 80s and early 90s which has resulted in higher sales. In addition, DVD is a cheaper media to make than VHS was so the studios make even more money that way. Add to this that first year DVDs still cost $20, which is about $5 more than VHS did during it’s final years before DVD really began to dominate. So studios love DVD. This is why you are starting to see more straight to DVD movies with decent actors in them, because if the budget is smaller, you can still make a hefty sum of money without the theaters.
Even though the DVD sector is what makes money now, the studios have no qualms of charging theaters 70-90% of the ticket prices. Which is why the theaters have such high mark-up on concessions and also why they now have started showing advertisements before the movies. I think that the percentage is likely directly linked to how much the place charges per ticket too which may be why they even continue to up the price of the ticket. I don’t know about you, but if someone was taking 90% of the profits, I would be reluctant to even raise the price much knowing that I’m only gaining 10 cents to every dollar I raise, and every dollar will likely make me lose 10% of the customers, it is rediculous for the theaters to raise prices like that. Unless, they get a higher chunk. Say they charge $7, they only get to keep 10%, if they charge $8.50 they get to keep 20%, and if they charge $10.50 they can keep 30%. It might make sense for the studios to do this to encourage a higher price as the studios would likely still make more money even giving up percentage points.
So how to avoid all the above trends?
My suggestion to a theater would be to offer a different form of venue. A venue to put the event back into the theater. I would try to work directly with indies if possible, cutting out the middle man (the studio). This way you could show independant movies at your theater at just a fraction of the price. I am sure the indies themselves would absolutely love the chance to get into theaters without having to sign with a studio. I’ve heard horror stories where an indie was doin ok without signing and then thinking he could get big bucks, he signed with a studio and quickly filed for bankrupcy because he wasn’t making money off his movie anymore, the studio was. Admitadly, this situation would work better for a chain and I don’t think a chain would start this drastic, but there must be some way to work with an indie organization to get deals for new movies without studios.
Second, avoid the multi-plex theaters. I think 2-4 is as many as you need. I mean right now within 5 minutes of where I live there are 2 12 theater complexes, neither has anything worth watching, except maybe Children of Men. So there is essentially one movie worth watching at any one time. That being said, there is also an indie theater near me that has 4 movies playing (i think in 3 theaters) and usually 1 to 2 are worth watching at any one time. So you tatke the best of the mainstream at any time, and the best of the indie scene at any time and you all of a sudden have a great running schedule. You can deal with the industry’s 90% markup for 1 movie. The purpose of that movie is mostly to get people in and looking at your place, and get them wanting to come back to your theater for the other movies over the plexes. So you use the 1 big movie to bring em to the smallers.
In that end, advertise. Those big movies come with a real of trailers that you gotta play. But tack on a few others for movies that you are playing that people may not have heard about, or ones that you will be playing soon that they may not have heard about. If you take on indie movies, especially without the studios involvement, then you gotta help that indie advertise the movie so that it is successful. It is in both yours and their interest to do so, and it likely won’t get done without your help. I’d also suggest advertising as much as you can in local papers. Try to get the critics in the local papers to come and see the show and write a review on it. Good or bad, it’ll get the word out and people will often see a film that has some interest to them even if it got a bad review. (Look at Star Wars). TV advertisement might be a bit much but a few well placed ads on TV a few times a month that features your theater in the forefront and a few of the lesser known movies could mean the world.
Price. Keep it down! Sure you don’t have top tier movies, but you have a quality screen and you are showing good movies at good prices. Beat the competition, people will come. And don’t just lower prices at the gate just for high concessions. Keep it up down accross the board. You will make money regardless, that’s all you need to worry about. Also, try different concessions. I’m surprised that theaters don’t charge for bathroom use as everything they sell is salty and greasy so that you buy a drink too, but it also forces you to the bathroom, which they could make even more money. Try healthier foods. Fruits, even if they are chocolate covered, would be a welcome change at the theaters, how bout smoothies? Or Coffee? Or even beer for late night shows? You need popcorn always, as that is traditional, but change it up. America is in a healthy craze right now and the theaters seem to be the only ones that don’t care. Change that. Oh and for christ’s sake don’t charge for water, it’s water!
Palace-syndrome. Kind of related to steer away from the multi-plex. I think that the palace has a place again. Make the theater great! Like the olden theaters that were just huge. Why not? Make your theater cater to those people who would choose Noodles & Company over Mcdonald’s. You are fancier, you are nicer, but you aren’t that far from the formula. Let them be McDonald’s, they are crap and they make you crap. That’s what they are there for.
I’m also one who thinks a dinner theater would be cool. The closest we have here is a cafe theater which I’m not really interested in. It’d be kind of cool to go eat a nice meal and see a movie while you eat, or directly after. Maybe eat desert and have some drinks while you watch. This would need to be done in a smaller theater I think, and I think the other problem with this is that I could see the theater chains serving crappy food for unreasonable prices. Like a Cheeseburger and Fries for $15. (that actually seems about on par with their mark-up, and of course they’d still charge you $10 for the movie).
None of this would ever happen of course. But it would be nice if going to the movies was still the event it used to be. I don’t care how nice your system is at home, there is something about going out to a theater and seeing it on the big screen. Nothing I have ever seen for sale has come close to matching the experience.