Friday, October 31, 2008

If I Owned A Cinema Chain

In Los Angeles, it costs $11.50 to go to the cinema - and that's before you buy popcorn and a soda and red vines.

In today's crappy economy, what I would do if I owned a cinema chain is lower the ticket price to $10 maximum, and lower prices *everywhere*, to make the movies the inexpensive destination for entertainment. The cinema chains make most of their money on that popcorn and soda anyway. I'd also come up with a "family pack" that would include popcorn and sodas and tickets - like some sports arenas do. Maybe even a "family night" - like Tuesday or Wednesday, slow nights, with $5 tickets. Basically, *use* this financial downturn to build the cinema audience and get people in the habit of seeing movies.

Though movies have usually done great business in hard times, offering a low cost escape from all of the problems of the real world, this is the first time we’ve had financial troubles *and* so many different types of inexpensive home entertainment. Not only can I cruise the internet and argue about films and screenwriting with people from around the world in message boards, I can go over to HULU and watch old TV shows *for free*. I can stick around the house and pop in a DVD of a film that came out six months ago and watch it on my home entertainment system. I can also watch cable and network TV - and there are some good shows out there... though TERMINATOR has jumped the shark and I think they screwed up MY OWN WORST ENEMY by mixing up his personalities before season 2. Though I’m not a gamer, that’s another thing you can do at home for very little money.

All of these things that weren’t around last time we had a financial crisis may be taking the audience away from the cinema. But people need to get out of the house now and then or they’ll get cabin fever. When you’re at home, no matter how big your screen is, the bills are still there on the kitchen table waiting to be paid. Hard to escape your problems when they’re in the next room. So there is a need to get out of the house... but if it is too expensive to go to the movies, people will go somewhere else.

About 20 years ago a cinema chain did $2 Tuesdays and actually made *more* money per week... until the studios shut it down. The studios thought that the Tuesday night audience would have paid Friday night prices... but they didn’t realize these were two different audiences. The Tuesday night crowd was made up of people who didn’t go to the cinema because they thought it cost too much. They’d stay home and watch the movie when it came on TV. But at $2? Heck, no brainer - let’s go to the movies!

That's still a great idea - and you don't lose money from those Friday and Saturday night crowds because they still go on those nights. You pick up people who don't usually go to the movies; and 20 years ago, people like me who went to see some movie I didn't want to pay full price for. Guess what? That was $2 from me the cinemas were never going to get any other way. I’m not going to pay full price to see a movie that’s probably bad, but $2? Heck, no brainer - I’m going to the cinema!

So the studios really have nothing to worry about if a cinema chain does a $2 Tuesday or a Family Night with a discount package, or some other way to entice those folks with cabin fever and a limited disposable income.

I always wonder why the guys in the head office at the Cinema Chains don't come up with things like this. Timing is everything - and now we have this financial crisis where people will have less disposable income. So you lower the price and get them hooked on movies. It's good for everyone - families can afford to get out of the house, and they will buy popcorn and soda and red vines, and hopefully they get into the habit of going to the cinema... and keep that habit when things get better. Plus, the *kids* get used to going to the cinema and, like Catholics, you get 'em for life. I think one of the reasons why I became a movie fan is that my Aunt managed a movie theater and would sneak in my family for free some times. So I saw movies in the cinema at a young age, and enjoyed the experience. There really is something about sitting in the dark in a place where your phone isn’t ringing and all of the responsibilities of your life have been left outside the cinema doors, and having this larger than life story play on that big screen. It’s really a shared dream. Being in that dark cinema transports you into that world on screen in a way that your big screen at home can never do. Once you’ve experienced that as a kid, you want to experience it again and again. But there are kids today who have probably never been to the cinema - or seldom go. It’s just too expensive for many families. But a family discount package or a $2 Tuesday? Let’s go to the cinema!

But Cinema chains have to fo this *now*. They have to take advantage of the timing.

There was this church run coffee shop across the street from my local Starbucks. It was a good place to go if Starbucks was too crowded... because it was always empty. Now, it wasn't overtly religious or anything, just on the church property and owned and run by the church. I'm sure they used it for youth groups sometimes and they probably did most of their business after church on Sunday. But the other 6 days - empty. No reason why a Starbucks customer couldn't be stolen away by them. When the Starbucks closed for *a full week* for remodeling, this church coffee shop did *nothing*. Starbucks had announced they would be closing for a week in advance, and the church coffee shop could have printer flyers and littered the apartments with them as if they were Thai restaurant menus. They could have put a big sign in their window facing Starbucks. They could have even sent someone with flyers over to the Starbucks while it was closed - people were still going there. For one week, they were the closest coffee shop for hundreds of people. They did nothing... and went out of business a couple of months later. When the door opens, you have to walk through. It’s all about timing.

A cinema chain can’t sit on their butts and then do this after the window of opportunity has closed. They need to strike while the cliche is hot! They need to do this *now*. And the Studios need to be onboard. The great thing about this is that it’s not just a way to lure a new audience into the cinemas and convert a bunch of kids into film fans and sell popcorn and red vines and soda... this is a great PR move. Imagine how much press a cinema chain would get if they lowered prices due to the tough times in America. That’s free publicity! The thing is - it only takes one cinema chain to do this... and the others will have to follow. Who wants to be the cinema charging $11.50 to see the same exact movie you can see at the cinema down the street for $10? And who wants to be the cinema showing PRIDE AND GLORY to 5 people on Tuesday night when you can fill every seat with people who paid $2? Do that math on that - it’s a no brainer.

And I will not be seeing PRIDE AND GLORY at full price. Not gonna happen. I saw WE OWN THE NIGHT, why would I want to see it with different actors? But there’s this thing with DVD prices that applies to movies not on my “must see” list. When a DVD of some movie like the remake of ASSAULT ON PRECINCT 13 starts at $20, I’m not going to buy it. When it gets down to $15, still not going to buy it. When it hits $10, it’s not going in my basket. When it hits $7.50 at Target, I think about it. When it lands in that $3.99 bin at Circuit City? Buy! At $3.99 I’ll buy a DVD for a movie I thought was just okay, because some day I may want to see it again. Same thing with cinema tickets for some movie that doesn’t interest me and is getting mixed or even bad reviews. There is a price low enough that I’ll go just to say I’ve seen it and it really does suck. So PRIDE AND GLORY at $2 or $3? Buy! Hell, I’d see the talking Chihuahua movie at that price. I’d see GIGLI for that price. Doing a discount day is a great way for a bad movie to make more money. And the cinema chain gets my soda money and red vine money (unless I sneak them in - hard to do with a soda, though).

Good PR, increased audience, building the future audience, and survival in this age of a million things to do... some Cinema chain needs to step up and do this.

That way, I won’t have to pay full price to see those damned talking dogs.

- Bill


ryanpaige said...

Well, a $10 ticket would be raising prices at my local theaters. They're still in the $8.50 range for night-time adult tickets; however, I think your point is sound.

The thing about a theater showing is that once it happens, it's happened. You can't sell the unsold inventory later at a reduced price, so any unsold seat to a showing is lost revenue that can't be made up.

It is somewhat ridiculous to not vary pricing based on the day of the week. A theater can fill most of their seats on a Friday or Saturday night while charging full price, but judging by the "crowds" I've seen when I've gone on other nights of the week, the number of people willing to pay for a full-price ticket on some weekday nights are very few in number.

And I think you're right about concession sales possibly being higher. Stores use "loss leaders" all the time to get people through the door in the hopes that they'll also buy more profitable items while they're there. There's no reason to believe that the ticket can't be the "loss-leader".

About 15 years ago in the Texas Panhandle town where I lived, there was a mom-and-pop convenience store down the street from me. One of the convenience store chains popped up right next door and started taking business away. So, the mom-and-pop shop started charging 25 cents for all their fountain drinks, no matter the size. People drove from miles around to get an extra-large fountain drink for 25 cents. And while they were there, they almost always bought a bag of chips, or a tank of gas, or some other, more profitable item.

It worked really well for them.

Cunningham said...

I go to the Vista which is $5 for the matinee and usually shows the movies I want to see.

I would - if I owned a theater:

--Sell DVDs and movie related merchandise in the lobby.

--I would sponsor a "season pass" system of coupon books good for movies throughout the year.

--I would make the lobby and interesting place to hang out so it always looked like there was a crowd.

--I would offer better foodstuffs.

-- Iwould participate in outrageous film festivals (stuff you can't see anywhere in the mainstream)

Marty said...

I live in the mid-west and we can still find plenty of theaters that have discounted shows. Indeed, there are SEVERAL duds that I would NOT pay even $10 to see - but when I can go for half the amount it makes the escape from our (collective) money worries a "no brainer."

The Moviequill said...

we go to the Sat morning matinees at the downtown Boston Loewes for $6.50 for movies we just HAVE to see on the big screen, othwerise it's Netflix where I'll take chances on a dew films or the library where I will scoop tons of movies for free. The library here is linked to 15 others so I can reserve almost any movie that is out for rental, a wonderful resource for financially strapped peeps.

But I like the idea of these metroplex theatres trying new tactics to get people in the seats. Why not dedicate one screen to foreign/independent, one to films that have been out for awhile, say Righteous Kill as an example for around $2, maybe one screen always running a kids movie and the rest for the top dollar biggies? Diversify. Variety. Choices.

James said...

There's a theater in Orange, where I used to live, that shows movies for $1.75. On Tuesdays the price drops to $1.00.

I saw a horde of movies I wouldn't have otherwise seen simply because the price was cheaper.

Not to mention the cheap price encouraged me to buy popcorn and soda because I felt I was getting such a good deal to begin with that there was no net loss if I spent the remaining $8.25 on food and drink.

To add to this discussion -- video games are a real threat to movies as an industry. Very similar to what television was in the 50s compared to film.

The thing I don't understand, is that everything I read about film vs television in that era makes it seem like there was a widespread panic throughout the film medium -- and things changed because of it. Movies really pushed their difference: Widescreen, color, surround sound.

I don't see movies trying to change at all to differentiate themselves from video games as an alternate means of entertainment.

I find that strange. Or maybe just stupid on the part of these giant conglomerates -- or maybe, it's just arrogance.

Martin said...

They used to have $1 movie night here…and it was HUGE! People really filled up on refreshments!

Erik said...

The local pizza joint (within walking distance of here) is also $3 movie theatre, running movies that have hit the long tail of their theatrical run. They started with a cheap projector and old dumpster dived couches, and now they have bucket seating,and a nice projector.

Of course they serve a full menu in the theatre, and they're one of the better local breweries. They have a family night once a week, and they often have an adults only late show - I saw The Incredibles with no screaming children.

The place is always packed, the food is great, and at that price, almost any movie is worth my time. But I still saw The Dark Knight, and Burn After Reading in a primo theatre on a Saturday night.

Richard McNally said...


Just watched the special feature documentary accompanying Hitchcock's FRENZY and they mentioned that that long steadicam-like pull-back shot down the U-shaped staircase (which was built) which ended with the "Hitchcock wipe" effected by the passing pedestrian in the street was done with a track on the ceiling.


Osvaldo said...

In Brazil, it's happening the same thing. Money isn't a easy thing on here too, the crisis is also affecting the brazilian business. The people (i mean the ones that really make a crowd on a theater, you hear them cheering for the good guy, applausing a outstanding scene) are not going to the movies. They prefer to stay at home watching whatever is on TV (normal, because cable is for "richs") or a buyed, pirated DVD-R on streets for something like $2. The rental stores are also closing because of that, because this isn't their price for "new releases".

There was the "neighborhood cinemas", little rooms that really infested my country during the 60's and 70's, but when the VCR came, they didn't survived. The majority were sold to evangelic churchs or became porn cinemas. But the downtown cinemas still existed and continued to make good sessions charging a good price. When the multiplex arrived, a few years later, there was only one on my town. Now, here in Recife, when you wanna to watch a comercial, blockbuster movie, you're forced to go at a shopping center. I hate to get out of the room and see that i'm still in another place instead of the street to back home.


Stella Louise said...

AMC theatres has showings for $6 Fridays, Saturdays and Sundays before noon. That's generally when I go to the movies.

Dr. Sombrero said...

Good post.

Here are a few more ideas:

E.C. Henry said...

Bill, dude, with ideas like this you should be running for office. Too late for '08, but what about '12?

Given the Republican BIG reach with Palin running with McCain, I'm wondering (and a bit afraid to ask I might add) who your running mate might be?

- E.C. Henry from Bonney Lake, WA

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