On movies, movie theaters, and economics

[yendi]

Two must-read essays for a look at how movie-theaters make money:

Why Movie Theaters Don't Care About You

and its sequel:

Why Movie Theater Prices are So High (and keep rising)

Both ganked from robyn_ma.

Comments

[lokilokust.livejournal.com]

that's still depressing.

[endora.livejournal.com]

Very depressing indeed.

Fortunately, here in Austin we have a local theater, The Alamo Drafthouse (http://www.drafthouse.com/), that is vastly different than the "big box cinemas". (http://www.drafthouse.com/franchise/index.html) The Drafthouse shows big first-run as well as lesser known films, has a full dinner & drinks menu (http://www.originalalamo.com/lamar/frames.asp) (with waitstaff!), and doesn't show 20 minutes of corporate advertising before the trailers & movie. (instead they show cartoons & such)

I can't remember the last time I saw a movie at a "non-Drafthouse" theater. I'm positive I'd see a LOT less movies if I had to go to one of the big-box cinemas.

[yendi]

*nod* I do love those kind of theaters, although they're way too rare.

That said, the drafthouse style theater is simply taking a different approach to the same economic situation -- they're definitely paying the same ludicrous percentage (probably more, since they've got less bargaining power), but they create a situation in which probably way more than 10% of customers buy food. After all, who goes to what feels like a restaurant without getting something to eat?

[endora.livejournal.com]

"That said, the drafthouse style theater is simply taking a different approach to the same economic situation"

Agreed. But at least it "feels" like the Alamo cares about its customers. The service there (at any location) is nothing short of excellent. Food is pretty darn good, too.
:)

[jerel.livejournal.com]

We have something similar in Orlando, the Enzian. The prices of a ticket are slightly less than the big chains, but they must be making it up in the food prices, which are similar to what you'd find in a nice restaurant. They show indie, arthouse, and foreign cinema. However, they are the only theatre to show these kinds of movies, so I think they survive because they have a monopoly on the niche market.

[litch.livejournal.com]

I fully believe Tim and the gang at Alamo care about us, a part of what makes them so successful is that they take great time and effort to create and support the film loving community here in Austin.

[chris-walsh.livejournal.com]

I'm lucky with the selection of independent theaters in Portland, comprised of brewpub-theaters and neighborhood movie screens (some still exist that were built in the 1910s and 1920s!). Troma's Lloyd Kaufman was in Portland in 2001 (at the Clinton Street Theater) and mentioned that he thought Portland had more independently-run movie theaters than New York City did.

Pirates of the Caribbean is playing on the screen near my place; I'll probably go there to see it. And were I in a really twisted mood, I'd go to the Laurelhurst this week to see the revival showing of Deliverance. (Heh heh...)

[auryn29a.livejournal.com]

After reading that, I don't feel bad about paying so much for popcorn and a drink when I see a movie knowing that that's the only reason the theater is there. I enjoy the movie-going experience. I love being in the front row and being swallowed by the movie.

[yendi]

I love the experience, as long as it doesn't include babies or cell phones. But yeah -- I enjoy movie theater food a hell of a lot, and consider it a pretty important part of the experience.

[chris-walsh.livejournal.com]

I remember reading a factoid once (in the '80s or '90s) that movie theaters maintain themselves via ticket price and earn money via the concessions, so I'd been aware of some of what was in those articles for a while. Of course, it seems that since then, the economics have gotten worse for the theaters, and that writer would definitely know that in good detail. Good articles.

[pkthunder.livejournal.com]

So if the theaters only get 2% of the ticket price, but make all their money on concessions that only 10% of movie-goers buy, why don't they drop ticket prices down to $4 or $5, get butts in seats and sell more concessions?

[yendi]

I think it's partially inertia ("prices keep rising"), and partially, as noted briefly in the second article, out of a desire to get 2% of a larger pie. If they raise ticket prices by a buck, and they sell ten million tickets a year, that's an extra 200K in profits.

[crwilley.livejournal.com]

I find it hard to believe that only 9% of movie-goers buy concessions; I would have guessed it was more like 40-50%.

...but I had no idea that the system worked via the studio charging a set amount per print plus 95%ish of the gross. That's insane.

[lubedpumpkin.livejournal.com]

That 9% spends on average $15-20. Sometimes a lot more. Movie food is mostly cheap, overpriced garbage.

[lubedpumpkin.livejournal.com]

Oh yeah. They make *all* the money on concessions. They are also so poorly run. The turnover rate for employees is so high because most of them are young, and they pay really terribly.

The boyfriend works there, which is GREAT. Free movies all the time? Don't mind if I do! It's $10/ticket here. They can bite me.

[two-star.livejournal.com]

Some of the points in the prices article seems kinda BSful to me. The whole, "They treat their customers like crap because they're not making them any money" stuff in particular. Gedanexperiment time: take the customers away and where is the money coming from? Nowhere.

The elephant in the room is that theater monopolies and oligopolies are one of the biggest reasons prices are high. But notice that little "lawmakers are flexing their unnecessary muscles" bit? This guy is a republican! (Or at least is talking like one.) They can treat their customers like crap because, at least for big budget first run films, there is nowhere else to go. And government interference is the only thing that will fix that.

[two-star.livejournal.com]

Grf. What I get for reading the second article first. The first one does make that point. Never mind.

[litch.livejournal.com]

I think the best thing that could happen to american movie making is for the "Theatre Industry" to collapse into a pile of rubble and start the fuck over. Movies rake in a disturbingly large portion of the GDP, that revenue stream is not going to go away.

Mainstream theater experiences are getting worse and worse, they are simply unsustainable and need to be purged so that something better can take their place.

[lurkerwithout.livejournal.com]

I probably saw fewer than 10 movies in the theater last year (and thats with seeing Serenity twice). Half of those I went with family members who paid for my ticket. Its likely that I'll see even fewer movies in the theater this year (I think I've seen two so far).

DvDs are cheaper, I hate crowds and my home theater is pretty good...

[verbminx.livejournal.com]

In Columbus, there are at least 4 competing chains, and the five-mile rule is NOT in effect. There is an indie chain that shows at least a few of the biggest hits at a location within a few miles of one of the two large AMC theaters in town, along with being the only chain in town that shows stuff like Tristram Shandy, Brick, Howl's Moving Castle, etc. (I saw all those movies in this chain's theaters, but I also saw The Corpse Bride, King Kong, V for Vendetta, and that one Pirate movie that came out this past week there.)

corporate bull

[gev.livejournal.com]

I have to echo the Alamo Drafthouse cheer.
while we still go to 'normal' screens for some movies,
probably more than half our movie-going is Alamo.

I agree with litch that the industry just needs to collapse.
Same goes for music. It is way too easy these days to make
and self-distribute damn near any media.
Fuck the distributor monsters.