Film-Tech Forum ARCHIVE: Pricey Movies-Experts discuss why

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Posted by Mike Frese (Member # 4361) on 05-01-2011, 07:56 AM:

http://www.lehighvalleylive.com/today/index.ssf/2011/05/local_movie_theater_owners_and.html

Local movie experts discuss why going to the movies isn't as cheap as it used to be
Sunday, May 01, 2011
By Dustin Schoof
The Express-Times
Going to the movies used to be a relatively inexpensive afternoon getaway or date night staple.

These days, a trip to the local multiplex can be as expensive as taking in a professional baseball game, once the cost of the movie ticket and concessions are factored in.

So why is going to the movies so expensive? The answer, according to those in the industry, isn't as clear-cut as you would think.

Making money

Moviegoers tend to see the biggest dents in their wallet at larger multiplexes. But Jeremy Devine, vice president of marketing for Rave Motion Pictures, says the theater makes most of its profit from concessions, not ticket sales.

He says the bulk of revenue earned through ticket sales goes back to the studio. Devine says inflation has also played a part in driving up the price of a movie ticket -- not to mention a sluggish economy and a general dip in movie attendance across the country. At Rave, an adult ticket for a traditional 2-D film costs $10; $7.50 for a matinee.

By comparison, Regal Cinemas, which has locations in Pohatcong Township, Lower Nazareth Township and Bethlehem Township, Pa., charges $10.75 and $8.50 for matinees.

A representative for Regal could not be reached for comment.

Devine says prices, despite the high cost, are actually on par with other sources of disposable income spending. He says he understands audiences' nostalgia for their youth and old movie palaces, but stresses that installing stadium seating, digital screens and other nuances is necessary today to give audiences the most for their money.

He says he hopes such state-of-the-art technology will make people forget about the rectangular theater complexes of the '70s and '80s and what he describes as "postage-size screens." Devine says construction and technology costs are also rolled into the cost of a movie ticket -- a vital aspect of competing with the home theater market.

Rave's Upper Saucon Township location at The Promenade Shops at Saucon Valley recently installed an IMAX screen -- the first of its kind in the Lehigh Valley.

An additional $5 will be added to the cost of a traditional 2-D film shown on the IMAX screen and $7 more for a 3-D IMAX showing. Devine says the cost of 3-D glasses and technology such as digital cameras and lenses can be attributed to the higher IMAX and 3-D ticket costs.

"The kind of technology and buildings we put up are extremely expensive," Devine says. "We certainly know that we want the communal experience of going to the movies to survive."

The resurgence of 3-D movies -- thanks in large part to the success of James Cameron's 2009 science-fiction epic "Avatar" -- has led to many multiplex chains installing 3-D-friendly cameras and screens. Devine says Rave is lowering the price of its non-IMAX 3-D screenings from an additional $4.50 up-charge to $4.

But as more and more films are released in 3-D -- "Fast Five," "Thor," "Green Lantern," "Captain America: The First Avenger," "Pirates of the Caribbean: On Stranger Tides" and "Harry Potter and the Deathly Hallows: Part 2" are among the 3-D films slated for release this year -- higher ticket prices have become commonplace as demand for the technology continues to grow.

Theater versus theater

Ryan Hill, program manager of comedy and cinema at the ArtsQuest Center at SteelStacks in Bethlehem, says movie theaters are up against advances in home theater. As luxuries such as 3-D television sets and Blu-ray players become more affordable and the popularity of Netflix, Red Box and on-demand movies grow, theaters are facing stiff competition.

Hill says as more and more theaters upgrade their theaters to keep up with technology, other costs such as electricity and staffing are factored into the overall cost of a trip to the theater.

"In general, movie theaters are now competing against people's home theaters, which are getting nicer and nicer," Hill explains. "It's a battle between the movie theater and the home theater."

He says Frank Banko Alehouses at SteelStacks offer movie fans a more unique and intimate experience by focusing on independent, art-house and foreign films that they would typically have to travel to New York City or Philadelphia to see -- with ticket prices ranging from $7 for ArtsQuest members to $9.75 for nonmembers.

"We're going to be showing films you can't really see anywhere else," Hill says.

Being realistic

Washington Theatre owner Marco Matteo says he takes a realistic approach when setting prices. At the end of the day, he says, it's about the customer.

"I'd rather have more people spend less money," Matteo says. "In return, people are very appreciative. I'm trying to be realistic. Everybody knows what the prices cost these days. You've got to give people a chance."

The Washington Township, N.J.-based theater-- which uses traditional 35 millimeter cameras-- charges $7.50 for adults and $5 for matinees for first-run releases. Matteo says he dropped the matinee price from its original $6.

"After talking to people and realizing it's a family theater, I went back to $5," Matteo says. "It made perfect sense. I think it's pretty reasonable."

The theater also hosts a family night Wednesdays when the featured film is not age-restricted, charging a flat $5 ticket fee.

"It gives people a chance to save a few bucks and have a day out with their kids."

Looking ahead

Despite the rising cost of going to the movies, one thing is certain, Hill says: sitting in a theater and watching a film come to life on a movie screen is an experience you can't replicate in a living room or anywhere else.

"(Going to the movies) is still the place to be," Hill says. "It's the destination people go to in the end. You still can't see a movie (at home) when it first comes out."

Exposed Editor Dustin Schoof can be reached at 610-258-7171 or dschoof@express-times.com. Talk about entertainment at lehighvalleylive.com/forums.

Posted by Steve Guttag (Member # 268) on 05-01-2011, 09:14 AM:

They don't seem to explain really why movies cost more other than the equipment is really expensive in IMAX venues.

And count up how many times the word "Camera" is used instead of projector...a fluff piece with insufficient research.

Posted by Aaron Garman (Member # 1653) on 05-01-2011, 12:08 PM:

What Steve said.

That, and they claim Fast Five was a 3D release. Um, no it wasn't?

AJG

Posted by Mike Blakesley (Member # 26) on 05-01-2011, 12:53 PM:

Yeah - I would like to see just one of these articles list the cost of everything that goes into a good modern cinema.

Why don't they say something like "You're seeing the movie from one of 200 chairs that each cost $150 or more. The digital projection system is worth about $65,000, and the sound system maybe another $30,000, and the popcorn machine is about $6,000. And the movie cost $125 million to make. So how is nine or ten bucks too expensive?

Posted by Jonathan M. Crist (Member # 413) on 05-01-2011, 03:19 PM:

And the article failed to mention the Roxy Theatre - a jewel in the heart of its coverage area where movies are only $3.00 for admission:

http://www.roxytheaternorthampton.com

Posted by Mike Frese (Member # 4361) on 05-01-2011, 03:52 PM:

I have a problem too with theater owners playing the "oh we do not make any movie on tickets sales" card. You have to straight with the public.

Assume an average ticket of $7.00, the exhibitor keeps 45% or $3.15. Assume an average per cap of $3.50 and a cost of goods of 10% (which many chains do report), the exhibitor keeps $3.15.

Posted by Steve Guttag (Member # 268) on 05-01-2011, 04:25 PM:

Well...the cost of the chair...at $150 lasts how many seatings? ...it is essentially free over its life...even with repairs. The $65,000 projector (you'll probably spend more money on lamps for it)...how many patrons does IT serve over its life...it too...is essentially free on a per-show/person basis. The popcorn machine is only essential if you sell popcorn and I'm sure you factor its cost in when you price your popcorn.

Compared to the electric bill, floor staff, studio's cut and the monthly payment to the bank/landlord for the property, the cost of the equipment to show the movie is really a non-starter in the big picture of why movies cost so much. The long-term items (things that last 10-years) are almost never significant in the cost of operation...it is the reoccurring things that need to be paid every week/month that cost and they often cost a similar amount even when attendance is down.

$10.00 is too much to see a movie in a typical cinema, in my opinion and is more that it used to be when compared to the typical minimum-wage worker (though there were times when the costs were similar).

-Steve

Posted by Mike Blakesley (Member # 26) on 05-01-2011, 10:12 PM:

quote: Steve Guttag
Compared to the electric bill, floor staff, studio's cut and the monthly payment to the bank/landlord for the property, the cost of the equipment to show the movie is really a non-starter in the big picture of why movies cost so much.

Right, but the electric bill and payroll and mortgage expense figures are boring. Most people are rightly impressed when they find out how much cinema equipment costs when compared to their tee-vee setup at home.

Posted by Scott Jentsch (Member # 1681) on 05-02-2011, 02:04 PM:

Any decent piece of furniture that a person would sit on at home is going to cost more than $150, so that price isn't going to impress anyone that demands more comfort than a folding card table chair.

People are impressed by excellent service and a great moviegoing experience. There is so little good customer service these days that it doesn't take much to make a positive impression in that regard, but all it takes is some apathetic staff that looks like they'd rather be doing anything else but serving that customer to make that customer think that they're paying too much for that movie ticket.

It's not so much about the price, but about the value.

What part of the country/world does someone have to come from to call a projector a "camera"?? I'm assuming that it's a regional colloquialism issue, because if it isn't, it just means the person is a dullard.

Posted by Mike Blakesley (Member # 26) on 05-02-2011, 06:21 PM:

quote:
Any decent piece of furniture that a person would sit on at home is going to cost more than $150,

People are impressed by big numbers. The trick with the chair is to remind them there are several hundred of the $150 chairs in there.

Plus a theatre chair is nothing fancy, unlike most chairs you would find in a living room.

quote: Scott Jentsch
What part of the country/world does someone have to come from to call a projector a "camera"??

It's just because they don't see projectors all the time, but they DO see cameras. Hardly anyone uses the word "projector" in their daily life. When the world shifted from cassettes and VHS to CD and DVDs, I'd hear people in the store say "I'll bet this is a good tape" while holding a CD in their hand. And I had lots of people ask me for "a tape deck that plays CDs." It's just all in what people get used to saying.

Posted by David E. Nedrow (Member # 4981) on 05-02-2011, 07:39 PM:

quote: Mike F
I have a problem too with theater owners playing the "oh we do not make any movie on tickets sales" card. You have to straight with the public.

I rarely hear anyone say they don't make "any" money, but they generally -- quite rightly -- note that they take home a small percentage of the ticket. I tell people that, if we're lucky, what we retain in ticket revenue might pay our rent for the month. Everything else comes from the stand.

-David

Posted by Mike Frese (Member # 4361) on 05-02-2011, 08:50 PM:

quote: David E. Nedrow
but they generally -- quite rightly -- note that they take home a small percentage of the ticket. I tell people that, if we're lucky, what we retain in ticket revenue might pay our rent for the month. Everything else comes from the stand

45% is not small. Plus I gave you example of how both ticket sales and concession sales contribute to the operating profit pretty equally. If you gross ticket profit barely pays your rent, then your rent way too high.

Posted by Mike Blakesley (Member # 26) on 05-02-2011, 11:09 PM:

You guys are being way too general. You can't just consider the film rent to be the only cost of running the movie.

Posted by Bobby Henderson (Member # 840) on 05-02-2011, 11:49 PM:

The cost of utilities at multiplex theaters has to be really high. I don't know the exact figures, but I'm sure it is far from cheap. I wonder what the water usage is for the average 8-plex, 16-plex or 24-plex.

The electric bill for running the air condition/heating system has to be pretty big, especially for large stadium seated theaters with big cubic areas of space to heat or cool. It seems like the digital projectors are commanding a bigger power draw than 35mm units did. And then there's all the other stuff around the complex that needs power, everything from the popcorn machine to the neon and LED signs.

The air conditioning systems alone cost a lot to buy and install and are expensive to repair and replace. At my workplace we're doing a trade-out with a heating and air company. They're replacing one of the central heat and air units in return for a vehicle wrap and ad time on one of our LED billboards.

Posted by Monte L Fullmer (Member # 2797) on 05-03-2011, 12:52 AM:

...and try "high lease payments/month" at certain market areas..

Suddenly, ten bucks a tix doesn't sound that all bad since there are those patrons who will pay for that tix price for entertainment.

-monte

Posted by Dustin Mitchell (Member # 372) on 05-03-2011, 01:40 AM:

The cost of movies is too high. If a family of four went to my theatre during our super bargain matinee they'd spend $5 per ticket, but lets assume $8 for a 3D movie, since all kids movies are obviously better if they're in 3D. If each kid gets a kiddie combo and the parents get a large popcorn and soda to share that's $57.

Now I am well aware of the costs of running a theatre, I've spent a lot of time looking over movie theatre chain financial reports on the web and my own theatre's P&L's. That's not the point. Customers don't care how much it costs you to run your business; and if they do care as has been pointed out they don't understand. They don't see a large soda that costs $5.55 a factor of the movie business model, they see it as costing 5 times as much as the same size soda at the local convenience store. Yes, I know, don't even lecture me, I'm well aware the economics and overhead costs of a gas station/convenience store are vastly different from a theatre-the point is Joe Public doesn't understand that.

Its all about what the public thinks the value of your service is. When Netflix gives unlimited movies for $8 a month and gas stations sell the same items theatre's sell in their concession stands for five times less, people are going to think they're getting ripped off, no matter how much it costs to run your business.

Posted by Frank Cox (Member # 6258) on 05-03-2011, 01:49 AM:

That's one of the differences between running a theatre in a "big city" and a theatre in a small town.

There's no way I could charge $5.55 for a large soda at my theatre, or anything close to that. (I actually charge $2.50. Up to a couple of years ago it was $2.00, then I raised all of my drink and popcorn prices by 50 cents.)

I was once told that theatres in larger centres are designed to attract the top X% of the population, and X was some number less than 20 as I recall. In a smaller place you have to appeal to a larger percentage than that to survive and if you set your prices such that people believe they are getting ripped off, they won't be walking in your door.

Even if you're playing the exact same movie at the exact same time as the "big city", you still can't charge as much as they do for admission and concession. People's expectations are different.

Posted by Steve Guttag (Member # 268) on 05-03-2011, 06:55 AM:

Bobby,

Two things...it is generally CHEAPER, electricity wise, to run a digital projector than a film one...I say generally since much of the savings come from the more efficient power supplies with power factors approaching 1.0.

As for the electricity around the complex, Film-Tech is attempting to address that very issue with their DCS system. By using the information given from the ticketing system (POS), they can turn on/off sections of the theatre so they are not needlessly consuming electricity when they are not being used. Even spaces that ARE being used can be more optimized for time of day and actual use. The savings on getting a theatre under this sort of control can be quite substantial. Which is to say, if you just turn everything on in the morning and have your HVAC set to rigid timers, you are spending a lot of extra money in electricity to operate your theatre that way.

-Steve

Posted by Mike Blakesley (Member # 26) on 05-03-2011, 10:52 AM:

People are always saying it's too expensive to go to the movies, but nobody ever says what people would LIKE to pay for a night at the movies. What does the average griping person think would be reasonable for a family of four? If you took a poll, I would bet the figure would be so laughably low that you'd have no prayer of making it. The problem is one of public education, plus the studios have devalued their own product by making it available for a dollar out of a pop machine.

On the utilities issue, I wish there was some way to just heat the bottom 7 feet of the auditorium. That whole space above the audience's heads is just empty space that never gets used, yet because heat rises we probably spend at least half our heat bill just to heat that empty space.

(Yes we have ceiling fans, but we don't run them during movies)

Posted by Steve Guttag (Member # 268) on 05-03-2011, 11:29 AM:

As for what I would like to see movie prices be...I would tie it a bit more to the minimum wage. Minimum wage earners are a big sector of the movie audience and if they are not making more, they can not afford more. This will also keep movie prices in line for the typical family of four too.

-Steve

Posted by Bobby Henderson (Member # 840) on 05-03-2011, 01:04 PM:

When prices get too high a lot of customers are just going to stop buying the product. After the nice hike I received from property taxes and home owner's insurance (along with gasoline and food prices getting more ridiculous by the day) I'm looking for spending areas to cut. I intend to maintain positive cash flow even if it means doing away with some entertaining luxuries.

I don't have much of a problem with a movie ticket running $7 to $10. When all the surcharges get added, wow it gets expensive. Especially at the fake IMAX theaters. I'm not paying $17 to watch something in IMAX Digital 3D when a $10-$12 Dolby 3D or RealD show on a more modest sized screen will deliver effectively the same damned 2K resolution picture.

Concessions prices are ridiculous. But if you don't like the prices you don't have to buy. I have watched plenty of movies without loading up on popcorn, soft drinks and candy.

quote: Steve Guttag
Two things...it is generally CHEAPER, electricity wise, to run a digital projector than a film one...I say generally since much of the savings come from the more efficient power supplies with power factors approaching 1.0.

I was guessing the digital systems had a bigger electrical need since our local Carmike theater had to have a pretty significant upgrade of its electrical system for its conversion to digital projection.

Posted by Monte L Fullmer (Member # 2797) on 05-03-2011, 01:22 PM:

quote: Steve Guttag
...it is generally CHEAPER, electricity wise, to run a digital projector than a film one

Which I can agree with this one after seeing the size of the rectifiers that are built within the digital units...a BARCO unit's P/S being the size of a 9 inch pizza box and a Sony's 1/3 the size of a STRONG compact switcher and both firing 4k bulbs ....

..then, after you look at these and then look at the rectifier's in the bottom of the Christie SLC consoles that's in the rest of the complex and you can easily see the power savings right there..

..and no motor to feed electricity to as well.

Posted by Scott Jentsch (Member # 1681) on 05-03-2011, 05:56 PM:

quote: Mike Blakesley
People are always saying it's too expensive to go to the movies, but nobody ever says what people would LIKE to pay for a night at the movies. What does the average griping person think would be reasonable for a family of four? If you took a poll, I would bet the figure would be so laughably low that you'd have no prayer of making it. The problem is one of public education, plus the studios have devalued their own product by making it available for a dollar out of a pop machine.

I think if you asked, you would probably get something along the lines of the cost of a DVD from WalMart, because that's the point of comparison. You might get a few that bring it even further down and look at the $1 Redbox rental as the comparison point.

However, I really do think it comes down to a value proposition, rather than a cost proposition. It's the value that people complain about when the balance tips too far away from what they consider to be reasonable for what they're getting.

My family just went to see Rio in 2D at the Marcus Majestic in Brookfield, Wisconsin. The showtime was 7:05pm, so that means we paid full-price, even though it was a Thursday evening (the theater was not very busy, and until a few minutes before the show started, I thought we were going to be the only ones in the auditorium).

Tickets for two adults and two kids came to $33.

This was an evening out for the kids, so we decided to order meals from the concession stand (the theater offers an expanded menu, including hamburgers, etc.). We passed on the $6.50 grilled cheese sandwiches, so the kids had cheeseburgers with fries and I had an Italian Beef sandwich and my wife had a chicken wrap. If we had the choice, we would have shared two orders of fries among the four of us, but each meal came with fries, and could not be ordered without. We shared a 20 oz. bottle of water.

The total for the meals came to $35.50. We didn't have popcorn or anything to drink during the movie.

So that made our night out a total of $88.50.

Granted, we could have saved money by eating at home or going to McDonalds, but the point of the evening was to make it a fun moviegoing experience and eating at the theater was part of that.

The presentation was acceptable but nothing to write home about either. The screen was small (about 26 feet), and the sound was ok, but not impressive. Even though it was film, the projected image was better than is usual at other Marcus locations, so there was that.

The employees at the theater did very little to add to the experience, but they didn't do anything major to detract from it either. I would have appreciated them not lining up in the auditorium while the credits were rolling, but at least they waiting until we left before they started cleaning.

Was our night out worth almost $90? We did have a good time, but I definitely would not repeat that very often.

For much less money, we could have purchased a movie on Blu-ray, and had food delivered. I would not have had to deal with the two girls in the row in front of us texting during the movie (they came very close to getting told where to go, but I bit my lip and kept quiet).

It's all about value. If the theater staff had done anything to make the experience more fun for the kids or more enjoyable for us all in some way, that would help with the value I feel we received for the money. But they didn't, and the kids would have had just as much fun with the experience of going to a store, picking something out, and getting dinner to take home with us.

Guess what I'll be doing the next time we want to do something fun with the kids?

Posted by Monte L Fullmer (Member # 2797) on 05-03-2011, 06:23 PM:

quote: Scott Jentsch
Guess what I'll be doing the next time we want to do something fun with the kids?

..stay home, have a picnic outside and shoot movies from your home projection system on the wall of the house out on in the stars of the night...and invite the neighbors over to have the same fun as well ....

Posted by Mike Blakesley (Member # 26) on 05-03-2011, 08:32 PM:

quote: Scott Jentsch
Guess what I'll be doing the next time we want to do something fun with the kids?

Well...if your complaint is the cost, then you outlined several ways you could have saved money. The kids probably would have had more fun going to a Chuck E Cheese and you could have spent a few bucks for small sodas in the movie and probably come out ahead.

But no matter what, you had an enjoyable evening out with the kids. I'll bet they had a fine time and didn't care that the "staff didn't do anything special." What's the staff supposed to do, bend over and kiss your foot? You got served your snacks in a timely manner and got what you ordered...correct? The movie was in focus, started on time, and didn't have any major film damage, correct?

If your movie experiences become just buying a blu-ray and staying home all the time, your kids will start saying "TV again??!" and tell you that all their friends got to see that ol' movie two months ago when it was in the theatres.

I don't have any kids but I can tell you this too: Just enjoy this time when they're small. The day is fast approaching where a pair of shoes or a "cool shirt" or one concert ticket will make your night at the movies look like a bargain! (I know this from talking to my teenage employees.) [Big Grin]

Posted by Tony Bandiera Jr (Member # 2365) on 05-03-2011, 09:44 PM:

quote:
Tickets for two adults and two kids came to $33.

The total for the meals came to $35.50. We didn't have popcorn or anything to drink during the movie.

So that made our night out a total of $88.50.

Must be some new math going on here.....I come up with $68.50

Hard to mount a credible argument when one can't get the facts right [Roll Eyes]

Posted by Mike Frese (Member # 4361) on 05-03-2011, 10:43 PM:

Mike,

The Roxy Theatre in Forsyth, Montana is NOT the over-pricing problem. Your prices are pretty damn good for what you give people. Something to be proud of.

My friend Joe (not his real name but he knows who he his) who posts here sometimes is not the problem. His most expensive ticket is $6 with $4 dollar matinees and he is 100% digital. and he is up 21% for the year.

Posted by Mike Blakesley (Member # 26) on 05-03-2011, 11:24 PM:

I have often wondered, if we lowered ticket prices, if attendance would go up and concessions sales go up enough to make up for it. I guess our prices are pretty low for the industry (adult ticket $7.25, large soda $2.75, XL popcorn $4.25) but high for a small town theatre.

I'm sure we lose people due to the cost. I lose sleep every time we have to raise the prices. It's my least favorite part of the business. Well except maybe cleaning puke off the sidewalk, which I had to do earlier tonight (thanks to the bar next door).

Posted by Monte L Fullmer (Member # 2797) on 05-03-2011, 11:38 PM:

quote: Mike Blakesley
I have often wondered, if we lowered ticket prices, if attendance would go up and concessions sales go up enough to make up for it..

You could, but you never go back up again which would be detremental for your business and it's a horrible practice for any business to lower prices then raise them again.
I know of a plex in a neighboring state that did that very same thing: lowered prices to gain more attendance and to raise per cap at the snakbar, but got caught and had to go back up and even more in their box office tix prices - really upset the movie going folks there.

quote: Mike Frese
His most expensive ticket is $6 with $4 dollar matinees and he is 100% digital. and he is up 21% for the year.

..I call it a market area then and you just can't make a fair comparison between two totally different market areas...

Also, he must be doing something right to be showing that amount of profit, but he better hang on to that profit to compensate for the loss that has to come around since the cinema business is so inconsistent and not like a grocery store.

Posted by Scott Jentsch (Member # 1681) on 05-04-2011, 11:01 AM:

quote:
Must be some new math going on here.....I come up with $68.50

Hard to mount a credible argument when one can't get the facts right [Roll Eyes]

OK, so sue me because I got a number wrong. I had several things happening at once, got two phone calls in the process of writing the message, plus a few other things I'm sure.

It was my bad for not double-checking my post before hitting the "send" button, but does it really diminish the point I was trying to make about value being the most important part of the experience? The actual cost doesn't matter so much as the value that the patron feels that they received in return for the money paid. Even at $68.50, it's an expensive night out that we wouldn't do very often.

quote: Mike Blakesley
Well...if your complaint is the cost, then you outlined several ways you could have saved money. The kids probably would have had more fun going to a Chuck E Cheese and you could have spent a few bucks for small sodas in the movie and probably come out ahead.

I agree with you that there are ways we could have reduced the cost, but that wasn't the point I was trying to make. My intention was to spend the money, I knew that it was going to be expensive going into it so that was no surprise. The end result, though, is that given the value received and relating that value to other options that we had, doing it again would not rank high on my to-do list.

Perhaps the best way to describe it is going to Disney World. Going into such a trip, you know that you're going to be paying an incredible amount of money. If there is one company that knows how to separate people from their money, it's Disney!

However, at just about every turn, the experience was very much worth the expense, so even though it was expensive, it was a good value. My kids were into the whole character thing, so we spent quite a bit of time hunting down the characters and getting their signatures in the autograph book and getting pictures taken with them. Our first morning there, we had breakfast in Cinderella's castle with all the princesses. I could have taken my wife to the fanciest restaurant in town for the money we spent on that breakfast, but the experience was well worth the cost.

quote: Mike Blakesley
But no matter what, you had an enjoyable evening out with the kids. I'll bet they had a fine time and didn't care that the "staff didn't do anything special." What's the staff supposed to do, bend over and kiss your foot? You got served your snacks in a timely manner and got what you ordered...correct? The movie was in focus, started on time, and didn't have any major film damage, correct?

If your movie experiences become just buying a blu-ray and staying home all the time, your kids will start saying "TV again??!" and tell you that all their friends got to see that ol' movie two months ago when it was in the theatres.

While our experience at the theater was not problematic, there wasn't anything particularly special about it either. Nothing to leave us with a warm fuzzy feeling that makes you want to come back to that theater the next time we're looking for something fun to do together.

The theater was not busy, so it's not like the employees were running around just trying to get everything done. In fact, most were quite happy to talk with each other, or just stand and look around while they waited for something to do.

What would employees at Disney have done in that same situation?

Maybe the person who took our tickets could have engaged the kids and asked them about the movie they were going to see. Kids (at least before they reach teenage years) love to talk about things, so it doesn't take much more than "Which movie are you going to see? Really? I loved that one!" to heighten their experience and getting them to respond favorably.

The bottom line is that we got what I expected, but nothing more. Given that my expectations were set low, where all I wanted was that nothing went wrong, that doesn't say much. If theaters are interested in competing effectively, they need to do more than just not screw up.

Not screwing up should be the baseline, and then it should be the ambition of those in charge to do everything they can to make the experience an enjoyable and memorable one that makes the customer want to return.

This isn't selling gas, this is show business! Where's the show? That "show" is where the value is!

Posted by Richard C. Wolfe (Member # 431) on 05-04-2011, 03:05 PM:

As Jonathan Crist mentioned in his post, this article was written by a reporter for, and published in, one of the daily newspapers in my area. I did think it was an oversight on the reporters part to not have balanced his article on the high cost of going to the movies without including the fact that there are two theatres in the metro area that charge only $3.00 or $4.00 for tickets and both have concession prices of only 1/3 of what they are at the first run theatres in this area. Well maybe he meant only first run theatres, but he didn’t mention that. Then again if you’re talking about the price to see a movie, the run shouldn’t have anything to do with it. The fact that there are 2nd run theatres in the area gives moviegoers the opportunity to see films at a reasonable price, and that is what the discussion is about. Excluding 2nd run would be like saying that automobiles are too expensive as they all cost $10,000 or more, without mentioning that there are many fine, some almost like new, used cars available for thousands of dollars less.

The reporter could have done a better job had he done his homework. He actually credited Jeremy Devine from Rave with having used the word cameras when he said: “Devine says the cost of 3-D glasses and technology such as digital cameras and lenses can be attributed to the higher IMAX and 3-D ticket costs.” I doubt that Devine actually said that as I can’t believe that a vice president of any theatre chain would ever say such a thing.

I also noticed that someone posted this comment: I have a problem too with theater owners playing the "oh we do not make any movie [money]on tickets sales" card. The truth of the matter is that most theatres DON’T even break even from ticket sales. Any theatre owner knows that, however most theatre employees do not. Film rent is only one part of the cost of operating a theatre. When you include rent, cam charges, payroll, taxes, utilities, advertising, insurance, home office contribution, and a few other small items, most theatres do not cover expenses from box office gross. If a law was passed that prohibited theatres from operating concession stands, having video games and screen advertising, 90% of all movie theatres would be forced to close.

While I do think that the price of going to the movies is getting rather high, as a family of 5 can now spend $100.00 for a single visit to a first run in my market area, it still is about the best value around when compared to other entertainment venues.

I’m actually delighted that the cost has risen to that extent, as since that same family of 5 can visit my theatre and get all the same for only $30.00, it’s great for my business. I just wish the newspaper when doing a story like this would mention that fact.

Posted by John T. Hendrickson, Jr (Member # 849) on 05-04-2011, 04:05 PM:

Well said, Richard. Those same expenses apply to first run multiplexes as well. There are fixed costs that simply can't be dodged, no matter how hard one tries.

It should also be pointed out that over the years, film rentals have skyrocketed as the studios take bigger and bigger pieces of the pie. Additionally, contract terms have decreased the time frame for settlement with the studios, causing many owners cash flow problems.

Posted by Mike Frese (Member # 4361) on 05-04-2011, 09:47 PM:

quote: Richard C. Wolfe
I also noticed that someone posted this comment: I have a problem too with theater owners playing the "oh we do not make any movie [money]on tickets sales" card. The truth of the matter is that most theatres DON’T even break even from ticket sales.

Who has said that a theater can be profitable just from selling tickets? I know I have never said that. The truth is most 1st run theaters get to keep 45% of the ticket sales. Most discount theaters are probably keeping at least 60% if not 65%.

There have been numerous examples where it is reported that 90% of the ticket revenues go to the studios when that is so wrong. My competitor had a ex-employee (who was an asst. manager)write the following on their Facebook page "Theater prices for concession are high but thats because theaters make less than 1% on its ticket price". Those statements are used to justify the high cost of concessions at theaters.

When theater patron Joe walks into a theater, they will have a gross profit from a ticket sale close to the same as the gross profit from the concession sale. We need both to be profitable.

Yes all of the costs need to be covered. Think of how much less your labor would be if you did NOT sell concessions. At least cut in half I would say. You would not need that $5000+ popcorn machine. You would not need as big of a lobby.

My point is that we need to honest to our customers to a certain extent. Allowing customers to believe that 90% of the ticket price goes to the studios and therefore that is why you have charge high concession prices (in many case having a cost of goods of 10-11%) is just bad business.

Fewer people went to see movies last year than the year before. 2011 is still pretty far behind that down year. The summer does look pretty good though.

Posted by Mike Blakesley (Member # 26) on 05-04-2011, 10:53 PM:

The 90% myth comes from the 90/10 split terms that are still around to some extent. The full terms are, 90% of the gross that's left after the house allowance ("nut") is deducted.

But reporters get bored with all those words that they don't understand what they mean, so they stop writing after "90%."

Posted by Monte L Fullmer (Member # 2797) on 05-05-2011, 12:33 PM:

"House Nut" - dang, haven't heard that one for quite the while...

(learned all of that booking terms from Excellence Theatres when they had their location seminars to boost up employee morale...in the late 80's before they got soaked up by Carmike..)

Posted by John T. Hendrickson, Jr (Member # 849) on 05-05-2011, 03:56 PM:

I do not book, but it is my understanding that the "house nut" no longer exists. Studios are moving to an "aggregate" percentage for the entire run. This aggregate can be as high as 62%, but never seems to go below 50%. A lot of it is based on the expectation of the amount of business a film will do. The studios naturally negotiate a higher percentage for tentpole releases.

So, first run theatres have to make do with the lesser percentage, and that must cover costs.

However, consider real dollars. Lesser films may be a 50-50 split, but the grosses are smaller. Thus the old addage: "fifty percent of nothing is nothing."

Posted by Mike Blakesley (Member # 26) on 05-05-2011, 05:31 PM:

quote: John T. Hendrickson, Jr
I do not book, but it is my understanding that the "house nut" no longer exists.

It depends on the studio and the film.

For us at least, Disney, WB and Fox are all on the sliding aggregate system where the rest are still using the 90/10 vs 60, 50, 40, 35 scale.

I have the feeling the reason they are switching over to the SA is because there is less guesswork and/or mistakes. Plus, with SA they can get the full 50-plus percentage even on a later run, whereas with the other system anybody playing a few weeks off the break could get a 40% rate or less.