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Author
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Topic: Meet the Lone Loser in MoviePass Hitting 1 Million Members
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Jack Ondracek
Film God
Posts: 2348
From: Port Orchard, WA, USA
Registered: Oct 2002
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posted 08-12-2018 12:25 AM
quote: Mike Blakesley
At the risk of igniting yet another debate about pricing, what would be a "correct" price? Everyone says movie prices are too high, even though they're the lowest-priced out-of-home entertainment option out there, coupled with a high cost to put that entertainment in the market. So what's the benchmark? What's a movie ticket worth?
For most, the answer would have to be "I don't know"... because they don't see anything beyond the cost of a ticket, soda or popcorn.
The funny thing about that is how people will spend hundreds, if not thousands of dollars for football tickets, not to mention the cost of concessions and beverages at those venues, and not bat an eye.
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Marcel Birgelen
Film God
Posts: 3357
From: Maastricht, Limburg, Netherlands
Registered: Feb 2012
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posted 08-12-2018 04:54 AM
Local trends obviously might vary, but most people I know never or only very occasionally go to sporting or other live events. When you ask them why, it's primarily because of the costs, combined with lack of interest in such things.
Although there is arguably some bias, most people I know do go to the movies. They don't watch as many movies as I do in a cinema, but most of them go to watch a movie multiple times a year. For some it's more like a family event, so they'll choose a "family" movie.
And yes, many of them complain about prices, especially those who go with the entire family. And sure, it adds up. Tickets for four, five or six, even with some discounts for the kids and/or grandma, put in some 3D, a bunch of oversized soft drinks, some popcorn, nachos and candy and you easily land north of $100 or an equal amount in your local currency.
And while there aren't many other options that are much cheaper, besides maybe a walk though the park, it still feels like and is a lot of money for many people.
While people should know that "quality escapism" has it's price, I think it's important for cinema that it remains within a specific realm. I don't have a name for it, but it's the realm where Average Joe/Joeette doesn't care too much about costs, since going to the movies will not really harm his or her budget for this month.
I think that some cinemas are really pushing it to the limit with their "premium", "VIP" and "ultra-VIP" arrangements, where a single admission will be more like that of a live concert. And while there have always been "quality tiers" in entertainment, the movie going experience was always one of the ore "egalitarian" ones. It's important to watch out that the exclusive part of the movie-going experience will not be the new norm, or we'll simply loose the base.
quote: Jack Ondracek
Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Helios and Matheson Analytics Inc. ("Helios and Matheson" or the "Company") HMNY, -19.87% in the United States District Court for the Southern District of New York on behalf of a class consisting of investors who purchased or otherwise acquired Helios and Matheson securities on the open market from August 15, 2017 and July 26, 2018, inclusive (the "Class Period"), seeking to recover compensable damages caused by Defendants' alleged violations of the Securities Exchange Act of 1934.
I can understand why investors are pissed, but I never understand what such class actions against a failed company would bring. It's good money for the lawyers, but they're the only ones who will win... The company has no money and the chance of them getting new investors and therefore potentially raising the value of your stock, at least in the long run, is becoming even smaller. What investor wants to put money in a company with such potential big-fat liabilities?
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Frank Angel
Film God
Posts: 5305
From: Brooklyn NY USA
Registered: Dec 1999
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posted 08-12-2018 04:57 AM
Hamilton - in 2015 = $450; by 2017 it peaked at $1,200
Hello Dolly - $1,009
Book of Mormon - $470
And there is now a waiting list for months for all of them. For Hamilton, plan to get tickets for nearly a year from now.
Average Broadway show ticket price = $114
And as Jack points out, sports events and music concerts out-cost movies by many multiples of ten. So why does the public value seeing Bette Midler on stage for 2 & half hours 10 times more than seeing a blockbuster movie...or one with her on the screen for 2 & half hours? Mostly it part and parcel of the history of the movies; movies were always entertainment for the common people and at prices the masses traditionally could afford. That's a collective, cultural memory that can't be...probably will not ever be changed. It will always be locked to "what the market will be bear" and that market will always have that public perception that movies should cost. Any one who thinks otherwise can try charging $50 for a blockbuster movie opening and see what happens. Actually that has been floated -- charging variable ticket prices based on value in seeing a movie opening weekend, similar to the differential that has been traditional of matinee vs. evening pricing. This would just make it more specific -- with a differential for weekend vs. Monday - Thurs. Thing is, the industry itself is responsible for seriously devaluing its own product.
By selling their product to video at absurdly low prices, they have devalued their own product that only encourages the public to hold on to this perception that movie should be cheap -- they are cheap on line, cheap to buy as CDs and and a damn dollar out of a box at the supermarket...less than the price of a candy bar. Cheap. Originally when the studios first released their movies on VHS, they priced the tapes at significantly higher prices than they do now. Remember when to buy a movie on VHS would cost you $89? Time warp to 2003 and Red Box allowed the public to see Hollywood big name titles for a buck. How's that for devaluing the product? And just as an aside, how is it that Disney says they don't care what the theatre charges for a ticket, but they have to get a per capita minimum? In other words, they are making sure the exhibitor doesn't devalue their product -- no theatre is going to charge a dollar to see a Disney film, yet they don't see to give a hoot about the DVD renting out for $1 -- how come there's no per capita demand that Red Box charge per DVD rental?
Then you have the penchant of the movie producers to flaunt their box office take, publicly announcing how many hundreds of millions of dollars a title makes on opening weekend; well that certainly doesn't instill any sympathy from the public when movie ticket prices rise, even by fractions of a percentage you hear the complaints and backlash. BTW, what other industry does that...announce on TV news outlets what their sales grosses are?
All this conspires to re-enforce the public's collective notion that movies SHOULD be cheap. The studios sell them cheap and they studios are hauling in massive amounts of money or so is the perception; exhibition is caught in the middle.
That's the nature of the beast.
The proof that it won't change in anyone's lifetime is that you don't see Nederlander or the Shubert Organization or any of the other "legitimate" (live) theatre owners scrambling to put in recliner seats or 4DX. Both the live theatre operator and the movie exhibitor provide aprox. 2 & half hours of entertainment, but it's the way the public perceives its worth is what makes all the difference and the studios along with history have kind of stamped that perception into our collective DNA.
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Jack Ondracek
Film God
Posts: 2348
From: Port Orchard, WA, USA
Registered: Oct 2002
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posted 08-12-2018 10:41 AM
You bring up some good points, Frank, especially that about the studios bragging about their grosses. While you can certainly find that information about other industries (cars, etc), they don't tend to wear those numbers on their shirtsleeves like the movies do...
I understand the movies were a much larger part of entertainment culture in years back. My dad recalls when newsreels were a legitimate form of information back then. But like it or not, those days are gone. Cheap DVD rentals and streaming services have taken the place of discount and sub-run theatres. Then, there's the perception that what you purchased at a low price isn't worth much in the first place. I've got days worth of stories about how my business was treated when we had $5 carload admissions out here. If I was forced to go back to those days, I'd turn the place into a mini-storage.
I understand the "realm" that Marcel is trying to place the moviegoing experience into. Given the overhead cost of providing that service to people who want something better than streaming on their smartphones or home screens, I'm not sure that's practical anymore.
Theatres have become "events", at least that's how we position ourselves these days. The outdoor experience here, and maybe even the VIP rooms at indoor houses are intended for the occasional customer who expects to pay a bit more for something different.
As for the indoor houses: I think they'd do much better if the chain owners got some spine and dealt more firmly with disruptive patrons in their auditoriums. It wouldn't take more than a couple of films, ruined by a couple of chatty, texting teenagers, and I'd be looking for alternatives, regardless of the price I'd paid. Somehow, the exhibs seem reluctant to risk confrontation. They also largely lost me when they forced their advert reels upon us. I never show up early, as the fact I might pay for a half hour of toothpaste and car ads and Save-The-Pets PSAs is a source of irritation that's changed how I approach the experience.
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Jack Ondracek
Film God
Posts: 2348
From: Port Orchard, WA, USA
Registered: Oct 2002
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posted 08-12-2018 11:58 AM
quote: Dave Bird
What if you sacrificed just a few car spots and your perimeter entry/exit and "screen separator" fences were actually mini-storage units?
Actually, I did have a guy out here this year, trying to talk me out of one of my back fields. Promised 20 years of residual payments, etc etc etc.
He couldn't figure out why I kept turning him down... after all, drive-ins are pretty much gone, right? He was trying to do me a favor, while getting ahold of a nice piece of land with access & utilities.
Unannounced, he and his wife came out for a show on a Saturday, when we had Incredibles, or Avengers, or some-such. The place was packed, with lines out of every hole in the building.. They left with his wife convincing him we probably couldn't be talked into his 'generous' proposal.
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Marcel Birgelen
Film God
Posts: 3357
From: Maastricht, Limburg, Netherlands
Registered: Feb 2012
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posted 08-12-2018 06:15 PM
quote: Jack Ondracek
I understand the "realm" that Marcel is trying to place the moviegoing experience into. Given the overhead cost of providing that service to people who want something better than streaming on their smartphones or home screens, I'm not sure that's practical anymore.
It depends on a lot of factors obviously, if it remains practical or achievable. I can only judge it from the traditional cinema perspective and not really from a drive-in perspective, although there will be a lot of overlap. The economy is an important factor, another is the cost of the technical equipment to keep on outperforming the alternatives and then there is the infrastructure around it, like the room, the seats and the amount of human efforts you need to put in there to deliver the expected level of service.
Then again, I don't expect a seat like in an International Business or First Class flight, nor do I expect a private butler pouring me expensive campaign when I go out to watch a movie and I doubt this is considered to be the norm by anybody I know.
What I do want is a technical up-to-date room, a clean and friendly environment without unnecessary disruptions, good popcorn and some real cold drinks and a good seat. I think it should still be doable at prices that don't bust Joe Average's budget.
Obviously, times have changed, the ever shrinking theatrical release window isn't helping, but time and time again it has proven that the real culprit of exhibition businesses struggling is usually the lack of good content.
What's more worrisome for me is that the Hollywood studios and their owners have all been consolidating and it looks like their interest in the feature hit industry is waning. They're all looking at Netflix and Amazon as the big elephant in the room. Unfortunately, they seem to think they can neutralize this elephant by imitating it, rather than by outsmarting it.
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Martin Brooks
Jedi Master Film Handler
Posts: 900
From: Forest Hills, NY, USA
Registered: May 2002
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posted 08-12-2018 11:00 PM
quote: Mike Blakesley
I'm just curious what the "magic number" is where (a) people will stop complaining about the prices, and (b) they'll start coming to the movies in droves, and (c) we and the studio can still make a buck.
People, especially older people, will never stop complaining about the price because they remember what the price was decades ago and they don't apply the inflation rate to figure out what it should be today. Having said that, it is true that movie tickets have increased at greater than the inflation rate.
In NYC, based on a ticket in 2003, current regular tickets are about 20% above the inflation rate at AMC and about 25% above at Regal. Based on the price of a ticket in 2005, regular tickets are about 22% above the inflation rate at AMC and about 27% above at Regal. Obviously, IMAX, Dolby Vision, 3D and other special formats or theaters are more. There's a famous Joel Meyerowitz photo from 1963 of a Manhattan move theater where the price was $2. But that's $16.31 in 2018 dollars, so it's really the same price, even though it doesn't feel that way.
However if we look at roadshow prices in 1967, the lowest price would be the equivalent of $14.88 today and the high price would be the equivalent of $31.62.
But the problem today is that streaming, DVD and Blu-ray has completely changed the perception of what movies are worth. It's also made movies so ubiquitous that they're no longer special. When I go to the movies during the week, they're pretty much empty. I really don't understand how these theaters are surviving. And because of all that, I don't see how theaters can get their mojo back, especially with the poor showmanship in most.
It will be interesting to see whether the AMC membership program gets people to attend theaters more often, since, if it's used, it can substantially lower the price of a ticket.
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Marcel Birgelen
Film God
Posts: 3357
From: Maastricht, Limburg, Netherlands
Registered: Feb 2012
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posted 08-13-2018 01:57 AM
quote: Mike Blakesley
How much is that in dollars? Our adult price is currently $7.75, and we constantly get comments from out-of-towners who are amazed at our "low" price. But I'm sure it's still "too much" by some people's standards, too.
I'm just curious what the "magic number" is where (a) people will stop complaining about the prices, and (b) they'll start coming to the movies in droves, and (c) we and the studio can still make a buck.
As you might have guessed, the magic number is pretty hard to determine, but let's just give it a try...
It's something that's being done at the big corporations all the time and which is essential for their business. Getting the price right makes all the difference between running a healthy margin and making huge losses. For the average small scale business, without having easy access to all the big numbers, it's obviously much harder, so you often tend to be more conservative and use your gut feeling rather than hard numbers.
What I often use to compare the buying powers between nations at large, is something you probably have heard of: The Big Mac Index, which is an indication of how much a Big Mac costs across the globe.
Now, as stupid as it initially may sound, McDonald's actually puts a lot of efforts into pricing their products in such a way they'll still sell sufficient product, but get the maximum margin out of it.
The next step, is a bit of my own interpretation, but I've referred to the value of a "vanilla" movie ticket to roughly that of two Big Macs in the past and I still think it holds up pretty well.
With the Big Mac index at $5.30 for 2018 for the whole of the U.S., that would be an average of $10.60 for a movie ticket, which is probably a dollar and a half above the current average.
Obviously, that's just part of the story. Even here, there is a considerable price difference between "City Center" and something that's considered "Rural" (if that even really exists anymore around here).
So, it's fair to correct the number by applying the Cost of Living. For Forsyth Montana that would be 96.8. If you maintain my "Double Big Mac standard" as a reference, then roughly $10.26 would be the acceptable price for a movie ticket in Forsyth Montana.
Now, you know your people better than I do and even though I'm pretty sure there is more margin in your tickets, it's probably not a good idea to just bump the price at once.
Also, my "Double Big Mac" standard obviously lacks some real research as substance, although I'm surprised that, in general, it is a good indication of what first-run movie tickets cost in markets around the world, especially if you compensate it with the local cost-of-living factor (which McDonald's franchisees also often do to some extent).
Additionally, while the Big Mac Index is a pretty solid thing, I've sometimes questioned the cost-of-living factors that have been calculated by different authorities, those statistics aren't always entirely reliable and sometimes seem a bit fudged. And in some fringe cases, where the cost-of-living factor is dramatically skewed because of e.g. local housing prices, you'll often see that commodities aren't as much affected and I'd still consider a regular movie ticket more like a commodity than some fancy luxury item.
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Jack Ondracek
Film God
Posts: 2348
From: Port Orchard, WA, USA
Registered: Oct 2002
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posted 08-13-2018 04:23 AM
It would interest me to know if the cost of production and marketing has held, more or less, to inflation over the years. Judging a movie ticket by that metric is fine, but it's only valid if the rest of the exhibitor's business follows the same scale.
Off-hand, I sort of doubt it.
I'm assuming the cost to provide a Red Box DVD or a Netflix stream is substantially lower than the average cost to run a 'brick and mortar' theatre, given average participation numbers. If the streamers siphon off enough patrons, the theatre would have to reduce profits or returns to its investors, reduced the quality of its buildings or presentation, such as they might be, or raise prices to compensate. That might require re-positioning what they represent to the market, possibly as an event, rather than a commodity.
Still...
(From Hollywood Reporter, 1-17-18):
https://www.hollywoodreporter.com/news/average-price-a-movie-ticket-soars-897-2017-1075458
... "While the average ticket price hit $8.97, it remained below the cost of an average ticket in 1977 when adjusted for inflation. Back then, a ticket cost $2.23, the equivalent of $9.40 in today's currency."
Doesn't seem all that outrageous to me...
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