Can Groupon move the needle on small films?

As you read last week, daily deal promotion service Groupon linked up with its first movie-based deal, offering tickets to last weekend’s big release from Lionsgate, The Lincoln Lawyer, for half off for a limited time. The studio was working with Fandango to actually sell the tickets online and was subsidizing the discount, so it was able to report the full ticket price in its box-office results. Estimates before the weekend had about 190,000 tickets being sold through the promotion.

The movie ultimately came in at #4 in last weekend’s box-office race, with something right around 90% of those coming out of the theater saying the Groupon deal was the primary reason they chose to see that movie.

The news has reinvigorated the discussion of variable ticket pricing for studio movies but that’s such a non-starter I think it’s barely worth considering.

Dana Harris’ story on Indiewire is a must-read on this topic but I want to expand on her point just a bit. She quotes a Lionsgate exec as saying the email distribution was the biggest moment for the deal since it was pure marketing, making the tens of millions of people who subscribe to the service aware of the movie and giving them a reason to see it.

So while it will be interesting to see how other studios wind up executing deal with Groupon, something that’s reported to be coming in droves, I think the real potential for this sort of promotion is when it comes to video-on-demand independent films.

Imagine an independent film that’s being distributed on-demand in one way or another. This is a movie who’s primary handicap is that it doesn’t have a huge marketing budget, resulting in lack of awareness among the general population.

So now a deal with Groupon (or any other daily deal service) means access to a broad and large potential audience. Even if something like 2% of users wind up taking advantage of a 50% discount on the VOD purchase that’s a lot more people who are spending some money on it and, more importantly, seeing the movie. That’s hopefully where word-of-mouth takes over and those people recommend the movie to their friends. And because we’re talking about VOD here it’s a lot lower barrier to people deciding to check it out.

As I said, this will be an interesting area to watch in the next several months. I think we’re going to see a lot of mid-level movies that perform a notch or two above what they otherwise would have by getting more people to turn out than were initially interested in the movie based solely on the marketing campaign. But the real potential for fundamentally changing business models lies in the independent film world, where movies that are otherwise off people’s radar can get some much-needed exposure.

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