A trio of recent stories have all hit my radar and all combine to make a universal point.
The first is this story from The Seattle Times. It asks a relatively simple question that I can honestly say had never occurred to me before: Why do all movies cost the same? That’s a fantastic question. Almost no other retail works like this, with universal pricing of all products. Other verticals have price variation based on a variety of factors, including cost of production, distribution and often the cost of display. The last point is especially in place in the grocery industry, where manufacturers pay to have their products placed on the “golden shelf” that’s just below eye level for an adult. All of those are added up and a consumer price point is arrived upon. But with movies, a flick that cost $5 million to produce – Clerks II for example, cost the same to see in theaters as Superman Returns, which cost well over $200 million to make.
The answer, of course, is that the profit from small and successful films is used to defray the cost of expensive failures and the profit from big movies is used to finance smaller and more experimental movies. That’s not necessarily a good answer, but it is the logic that’s used. The main problem with this system is that, while it works for the studios and the theater owners, it doesn’t work for movie patrons. There’s absolutely nothing to incentivize the act of going to the movies on a Saturday night. And no, you’re not allowed to point out gift certificates or passes. Ask anyone – they usually aren’t valid in the first two weeks of a movie’s release, which is exactly when most marketing efforts have ended and the movie has already been deemed a success or a failure. I’m not sure why, but that’s the system that’s in place. This has the odd effect of actually discouraging people from going to see the latest and most hyped movie. They have coupons, they want to use them but can’t and runs counter to most other industries on the face of the planet, who try to build usage by offering discounts and deals. Of course the movie industry doesn’t work like that, with a movie that’s been out a month now considered well past its prime.
Bill Green makes the point that theater owners especially have their head in the sand regarding the reality of today’s marketplace. He points out that owners continue to blame the audience problems they’re having on the quality of the movies while at the same time claiming that everything is fine and they don’t really need to change what they’re doing. He says that his lack of movie going has little to do with the movies being shown and actually is a result of the price increases and the overall experience. It’s those things that are keeping people away from the theater. And, as Green says, with the ever expanding number of options – including a shorter theater to DVD window – available to people it’s not like anyone really feels like they’re missing out.
Leave it to Mark Cuban, then, to find a way to try and incentivize movie-going – online ticket buying in particular. People buying a ticket to The Architect through MovieTickets.com will receive access to MP3s of the movie’s score as well as downloadable deleted scenes from the flick. That’s just the sort of thing that can encourage people to try a new movie or go see it in the theater as opposed to saying “I’ll just wait for the DVD.” They’ve gotten something additional and substantive for their dollar, not just the fleeting experience of a theatrical movie presentation.
Going to a movie is no longer the experience it once was. There are more entertainment options out there, people are more scheduled and have PDAs that draw their attention and just generally have other things going on that take precedence over going to see a movie whose trailer gave away the best romantic moments/action sequences/jokes anyway. The experience of going to see a movie has changed from one that was fun and escapist to one that’s been turned into a commodity. Not only does moviegoing cost more than ever before but so do the snacks, on top of which we’re treated to a half-hour of ads for network dramas and telecomm firms before the trailers even start. As Scott Kirshner says, the ability to have something queued-up in Netflix or other online service reduces the sense of immediacy that we feel about consuming something now because we know we’ll get it sooner or later.
So here’s what I think needs to be done:
- Start accepting coupons as soon as the movie opens. It’s not like I can’t use my Border’s gift card the first two weeks of a book’s release. This makes no sense. Stop it.
- Either drop prices or drop the commercials. Every other medium is moving toward a “pay for no ads or get it free with ads” while the movie industry wants people to pay more AND accept an amount of advertising that we would turn off if we were at home.
- Think Wi-Fi. People are bringing their phones and other PDAs with them to the theater so offer them some fun content that they can upload while they’re in the lobby.
- Create more incentives for online buying. This reduces the costs of having multiple people at the ticket booths and gives people something tangible they can come away with.
In short, the goal should be to give people an experience that’s worth their time and money.