Film-Tech Forum ARCHIVE: Should Studio's Pull Product From Bad Theaters

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Posted by Edward Jurich (Member # 1787) on 03-25-2005, 07:14 PM:

A friend of mine in Sarasota walked out of a showing (along with several others) of Aviator. The sound kept having bursts of noise and the picture was lousy. The concession/projectionist couldn't fix it so everyone who walked out got a refund.
My friends reaction, he can't wait until new releases come straight to video and theaters are gone. He claims it cost too much to go to a movie anyway and it's cheaper to watch at home.
I pointed out to him that a studio hopes to at least break even with the theater release so if there is no theater the cost of home rental will jump.
Would it not be in the best interest of studios to withhold product from theaters that put on a bad presentation. Chances are such theaters are chasing people away anyway and that would lower the print cost by supplying only to decent theaters.
I'll be happy to rate theaters in my area for free [beer]

Posted by Fred Schoenfeld (Member # 2632) on 03-25-2005, 08:41 PM:

A start would be for ALL studios to bill ANYONE who damages a print to pay for it. It might make bad operators/theatres do a better job in the booth. But then again, there are fewer and fewer true projectionists left and I salute all of you on Film-Tech who do care and take pride in a good presentation and return prints after many weeks in your house in the same condition they were in when they arrived. [thumbsup]

Posted by Steve Guttag (Member # 268) on 03-26-2005, 07:34 AM:

The other thing...to eliminate the readmit type of pass. The theatre would have to pay for every person that enters the theatre. The studio shouldn't have to subsidize the theatre's poor operation. I'd say the studios loose more money to the readmit pass than to any form of print theft.

Posted by John Walsh (Member # 168) on 03-26-2005, 07:50 AM:

Both good ideas ..... But I think (despite what they say) the studios are making so much money, the revenue lost is not worth worrying about. Of course, the studios will use bad theaters as an argument to say digital will elimate these problems.

Posted by Mike Blakesley (Member # 26) on 03-26-2005, 12:11 PM:

If EVERYONE who ever sees a seriously bad presentation would write a letter, complain to the management and demand a cash refund, then the problem would go away. The trouble is, most people simply do not care.

I remember back when we ran "Driving Miss Daisy." The print we got was one of the worst I ever saw, scratched the whole way through. It looked like you were watching through a screen door. (And since it was a hot movie, no replacement prints were available...I checked.) We stood by the doors at the end of each show, apologizing for the condition of the film. Most people said, "Oh, it didn't bother me" or "I never even noticed it, the movie was so good."

Posted by Bobby Henderson (Member # 840) on 03-26-2005, 01:40 PM:

Writing letters does make a difference. I've seen positive results from the few times I've had to do it.

But then that's really the trick. Most customers just blow off a bad presentation as bad luck or something like that. Even many of the ones who get seriously pissed off about it usually don't have the follow through to sit down and write a well thought out letter.

At the most, they'll have a pissy conversation with the theater manager and just leave it at that. My opinion is if you have a civilized conversation with the manager that may go over better. You'll at least have better chances of seeing the problem addressed promptly. Honestly, the hands of theater managers are often tied and you'll sometimes have to write to the corporate offices about the problem. Some of those suits may not take a letter seriously, but others will. You'll never know unless you bother to write.

Customers can write branch offices of film distributors about a problem as well. I did that in the case of our local Carmike theater in early 1995, only because the distributors were not sending out any DTS discs with the prints they had heading for Lawton. Their books didn't even show that eight plex existed. After that the theater received DTS discs on just about every show supporting the format. I also did the same thing in 1996 when Fox was being inconsistent about their allocation of titles between the Carmike theater and the crappy Cache 8 down the street. "Independence Day" was due to play on the Carmike's two THX-DTS equipped screens. I put Fox's office on notice they would seriously anger lots of movie fans around here if they stuck that show in an old theater as part of another allocation sequence glitch. "Independence Day" made a LOT of money for Fox in its run at the Carmike. In the 10 year history of that theater, "ID4" and "Titanic" have drawn the largest crowds.

Posted by John T. Hendrickson, Jr (Member # 849) on 03-26-2005, 02:48 PM:

Steve's idea of ending remits is a great point. Problem here is that many of the big chains give them out like water. Print scratched? No problem. Give 'um passes if they complain. Realistically speaking, that's a future free admission for a show someone would have paid money for, and the theater doesn't get a cut of that, along with the distrib, so both parties lose.

We are an independent, and a "hands on" operation, so we want to keep everyone happy and keep them coming back as paying customers.

John Walsh's argument is especially valid. My owners said the big push at Show West was digital, digital, digital. Translation: save $,$,$. No cost for prints, no paid projectionist. Just press a button. (Just like the WB screening at Show West) So, yes, I think the studios love to hear about prints being trashed, and the more the merrier. Bend over, theater owners, [sex]

and be prepared to shell out for digital. And when that digital show goes down, they'll have a tech there to fix it in a jiffy. Yeah right. When pigs fly.

Posted by Mike Spaeth (Member # 524) on 03-26-2005, 03:59 PM:

The problem with getting rid of readmits is that there are situations where they ARE necessary.

Example:

Power goes out on Saturday night, 3000 patrons in the building. In the bustle of clearing the building ... I am not going to open the cash drawers ... I will be issuing readmits to everybody on hand OUTSIDE the building in exchange for their ticket stub.

Posted by Gordon McLeod (Member # 33) on 03-26-2005, 06:43 PM:

Even if the power goes out a customer can demand a cash refund and refuse a pass

Posted by Mike Spaeth (Member # 524) on 03-26-2005, 07:04 PM:

It is unreasonable to expect an operator to be able to give 3,000 cash refunds in the case of a power outage. In most of the locations I've worked in, that money is already dropped into a drop safe, which is not accessible by anyone in the building.

Posted by Dean Kollet (Member # 1789) on 03-26-2005, 08:07 PM:

which theatre was it? AMC Sarasota East 6-12 or Regal Hollywood 20?

Posted by Frank Angel (Member # 248) on 03-27-2005, 03:53 AM:

The owner I worked for at my very first theatre told me that the one of the Ten Commmandments of theatre operation was that you never, EVER give money that has come into the box office, back once you've got it. Give a refund coupon, never cash. For one thing, it is simply safer and more efficient to hand out a coupon than to deal with money, especially for more than one or two patrons. You can have an number of ushers handing out vouchers whereas trying to giving back real money requires patrons to line up at the box office; that could take an inordinate amount of time to give 3000 people cash refunds, plus it sure can irritate people having to stand on lines after they are already pissed because of the downed show.

Some people might get a little miffed that they are not getting cash, but for the most part vouchers for getting into any other movie of their choice at any other time seems to satisfy the majority of patrons. Give em a free popcorn coupon as well & they are in seventh heaven. Hey, we give em a free popcorn voucher when they buy a discount book of five admissions -- for some reason they think they've won a lottery. In fact, the first year we did this prom, we didn't advertise that there was a free medium popcorn coupon in the ticket book -- it was just there in the back of the ticket vouchers. I can't tell you what great PR that was for us. The word-of-mouth about it was priceless.

But again, commandment #1 -- never EVER give money BACK to a patron once you've wrestled it out of his hand. [Razz]

Posted by Paul Linfesty (Member # 214) on 03-27-2005, 08:50 AM:

The theatre had BETTER give me a refund if there projection and/or sound is screwed up! My given rationale....Why would I want to take another chance with that theatre's crappy presentation?

Posted by Steve Guttag (Member # 268) on 03-27-2005, 10:38 AM:

Legally, if you did not provide the service that the license of the ticked provided (Show the movie) you are required to refund the price of the license (ticket). That does not mean on DEMAND. However, the theatre is responsible to refund the money in a timely manner. No court would hold you to, in a power outage, to refund everyone's ticket right then an there. You would have to do it in a timely manner if requested.

As to the readmit due to the power outage? That is not the studio's problem, that is the theatre's. It isn't that their print didn't work, it was your theatre.

As to the theatre losing money on the readmit...Give me a break...what a silly answer. If the theatre's cut is 10-45% (depending on market and week of run...etc)...the readmit affects the theatre's income rather minimal since the bulk of their profits are from the concession stand. Thus, the theatre shifts the profits so that, while neither they nor the studio make a profit at the box, the theatre makes to per-capita profits at the stand (the first from the ruined show, the second from the readmit)...the studio's take on this? Just their original cut from the first show. No matter how you cut it, that is theft from the studio.

If every ticket or pass issued to see a performance resulted in the studios getting their regular fee from a full priced ticked, this readmit business would slow down dramatically. In fact, it would provide a great incentive to keep the show running and the show at high quality.

Posted by Mark Hajducki (Member # 1732) on 03-27-2005, 02:31 PM:

quote: Steve Guttag
If every ticket or pass issued to see a performance resulted in the studios getting their regular fee from a full priced ticked, this readmit business would slow down dramatically.

I was told that, for free list suspended tickets, the distibutor got paid their share for any comp ticket. This assumes that the ticket makes its way through the box office system.

If a cinema refunds a ticket (through the box office system) does the distributer get paid? (when doing box office refunds there was not a way of coding whether the customer saw the show or not, just a field to enter a sarcastic comment)

Posted by Jim Ziegler (Member # 86) on 03-27-2005, 04:28 PM:

quote: Steve Guttag
Legally, if you did not provide the service that the license of the ticked provided (Show the movie) you are required to refund the price of the license (ticket).

Actually, by providing a readmit, you are still providing the service, just at a different time.. Legally you should be covered.

quote: Steve Guttag
As to the readmit due to the power outage? That is not the studio's problem, that is the theatre's. It isn't that their print didn't work, it was your theatre.

How is that the theatre's fault? Seems to me, the fault would be with the electric utility..

quote: Steve Guttag
As to the theatre losing money on the readmit...Give me a break...what a silly answer. If the theatre's cut is 10-45% (depending on market and week of run...etc)...the readmit affects the theatre's income rather minimal since the bulk of their profits are from the concession stand.

10% of a $10 ticket is $1.00. Most megas I have been in run about a $2.65 percap, so, even in a 90/10 situation, that is still more than a 25% drop in revenue. If it is a 45% cut for the theatre, that is $4.50 vs the $2.65 per cap... I would not call those numbers minimal, especially considering the narrow margins run by many theatres. Steve, look at some P&Ls sometime..

quote: Steve Guttag
Thus, the theatre shifts the profits so that, while neither they nor the studio make a profit at the box, the theatre makes to per-capita profits at the stand

The profit does not come from the box, but the theatre's take of the box office does pay many of the bills. Reduce income anywhere and you reduce overall profitability.

quote: Steve Guttag
the studio's take on this? Just their original cut from the first show. No matter how you cut it, that is theft from the studio.

Bullshit... If you refund the ticket, the studio loses the cut it got, but makes it up when the customer comes back to see the movie again. If you give a readmit, the studio keeps its orignal cut and gets nothign when the customer actually sees the movie. Net result - the customer sees the movie once and the studio gets paid once. But, if the customer comes back next week, the studio is getting thier cut during a week when thier percentage of the box office take is higher.

quote: Steve Guttag
If every ticket or pass issued to see a performance resulted in the studios getting their regular fee from a full priced ticked, this readmit business would slow down dramatically.

So the studio should get paid twice when the customer saw the movie once? Well that makes a lot of sense... Lets punish all those greedy theatre owners for power outages. After all, we know that the power really isn't out, but the greedy theatre owner is just playing with the fuse box...

Steve, try looking at some theatre P&Ls before making all these claims about their profitability and where the money comes from. In most cases, there are legitimate business reasons why chains do things the way they do. Another fact to keep in mind, which would be more profitable, a $20 million megaplex or 20 $1 million fast food restaurants. Quite clearly, its the fast food restaurants. Anyone who owns theatres does so because they want to be in the business - if they are out to make as much cash as possible, they choose another avenue.

Posted by Jonathan M. Crist (Member # 413) on 03-27-2005, 10:32 PM:

Just what exactly is a "bad theatre?"

The distributors would argue that if you pay your film rent on time and participate in their sales drives and promotions you are a "good theatre" and if you pay your film rental late you are a "bad theatre". Since timely payment of money is all the distributors care about, presentation quality is irrelevant to a distributors decisions to withhold product.

Posted by Eric Hooper (Member # 1730) on 03-28-2005, 01:30 PM:

The whole cash refund vs. pass issue was discussed in another thread. But back on topic, I think in the long run it's going to come down to the studios running their own exhibition theatre to 'preview' their two hour commercial for their DVD, and all 'exhibitors' handling their product poorly will be gotten rid of.

Posted by Steve Guttag (Member # 268) on 03-28-2005, 05:52 PM:

quote: Jim Ziegler
Actually, by providing a readmit, you are still providing the service, just at a different time.. Legally you should be covered.

Think again. The license was for a specific product at a specific time. It is not up to the theatre/busniess to change that product or time once the license is issued (ticket). If the business is unable to deliver on the product at the specified time, the customer is legally entitled to a refund. To think of it in reverse, someone could not buy a ticket for Feature ABC on Tuesday at 7:00pm and expect to be admitted to the same feature on Wednesday at 7:00pm if the feature ran just fine on Tuesday. You have both entered into a contract specifying the product and time.

quote: Jim Ziegler
How is that the theatre's fault? Seems to me, the fault would be with the electric utility.

It is not the theatre's fault persay but the distributor has zero liability here. If you are an auto mechanic and you loose power, and consequently lose business since you can't repair cars without power, it is between you and the power company. Don't like it, sue your power company. You won't get far since your business is consequential damages (they won't bill you for the power you don't use)...if the problem is so poorly dealt with that you constantly have problems, you could indeed bring legal actions and attain government support since power is an utility. Consult your lawyer if you are in this situation

quote: Jim Ziegler
Steve, look at some P&Ls sometime..

I actually have...and even been one of those that helped run a chain of theatres.

quote: Jim Ziegler
Bullshit... If you refund the ticket, the studio loses the cut it got, but makes it up when the customer comes back to see the movie again. If you give a readmit, the studio keeps its orignal cut and gets nothign when the customer actually sees the movie. Net result - the customer sees the movie once and the studio gets paid once. But, if the customer comes back next week, the studio is getting thier cut during a week when thier percentage of the box office take is higher.

Nice wording but wrong. If a customer is denied their show for any reason, the studio always takes the hit. The studio gets their cut on the first sale...on the readmit, they get zero...why not? If the customer has the time to see two movies in a time period, where did that second sale go for them? It was denied by the readmit. The studio should get its cut for every patron that goes through the door. You, the theatre, get your chance at selling your popcorn and sugar-water for every patron.

The subject of this thread was should theatres get their prints pulled from bad theatres. Readmits are a prime indication of a theatre that has problems, for whatever the reason. It not only reflects poorly on the the theatre but on the studio and the movie going experience, in general. If a theatre knew that if they had to pay for each of those readmits out of their profits, they would really try a bit harder to not to be in a situation havnig to refund/readmit a patron. If you talk to some managers on this forum you will find they will refund AND readmit too.

quote: Jim Ziegler
So the studio should get paid twice when the customer saw the movie once?

Absolutely, the studio did their end by providing the product...it is the theatre that got into a botched show situation. The customer is coming to see the studio's product, not the theatre's "value priced" food.

quote: Jim Ziegler
Steve, try looking at some theatre P&Ls before making all these claims about their profitability and where the money comes from. In most cases, there are legitimate business reasons why chains do things the way they do.

Again, I have. Most theatre chains have good reasons for going bankrupt rather than doing what they do. The best way I've ever seen to stave off poor P&Ls is high-end presentations. If the shows are flawless, the theatres are of high-quality, the location suits the available patronage and the bookings are proper, the theatre will do well. If the chains decide to overscreen and put in the same-o, same-o theatre, they cut the pie too small. Believe it or not, I've seen theatre owners do quite well running theatres.