Film-Tech Forum ARCHIVE: Analyst: 'Pirates' Was Hurt By 3D As Consumers Tire Of High Ticket Prices

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Posted by System Notices (Member # 2357) on 05-24-2011, 02:26 AM:

Analyst: 'Pirates' Was Hurt By 3D As Consumers Tire Of High Ticket Prices

Source: deadline.com

quote:
Analyst Richard Greenfield of Wall Street's BTIG has long been skeptical of claims by Jeffrey Katzenberg and James Cameron that 3D would do wonders for the movie business. But now Greenfield says that 3D is actually hurting the industry: "U.S. consumers are increasingly rejecting 3D movies," he said in a report today. Attendance for Disney's Pirates of Caribbean: On Stranger Tides "would have been higher" this past weekend if half of its screens showed the movie in conventional 2D instead of just a third, he says. The evidence? He notes that about 38% of the $90 million in box-office revenue for the film's opening weekend came from non-IMAX 3D screens. That's much lower than the average last year, when 54% of the opening revenues for DreamWorks Animation's Shrek Forever After, and 57% of the initial sales for the studio's How To Train Your Dragon, came from non-IMAX 3D screens. Greenfield says that "pricing remains our single biggest concern, especially with so many 3D movies aimed at the family segment." He figures theaters charged $14.85 a ticket to see Pirates on IMAX 3D, $10.85 for non-IMAX 3D, and $7.60 for 2D. He adds that family films also are hurt by "young children not wanted to wear 3D glasses." His advice: Hollywood should make fewer 3D films in 2012. "Focus on making consumer-desirable films rather than worrying about the technology," he says.

Posted by Joe Redifer (Member # 3) on 05-24-2011, 04:13 AM:

But fellow forum member Aaron Garman, a 3D critic, went out of his way to purposely see this movie in 3D. He now loves 3D. It's just as groundbreaking (and important) as color and sound, after all. Or maybe he just likes paying more where extra money isn't warranted. Still haven't figured that guy out.

Posted by Aaron Garman (Member # 1653) on 05-24-2011, 10:17 AM:

I wouldn't say I went out of my way. I didn't really want to see the 35mm on a silver screen anyhow because that too does not look all that great. I will say this movie, shot with real 3D cameras, worked on that level. I enjoyed it, and in many scenes the 3D did give some interesting depth to the image that I found cool. I still maintain that in most installations though, 3D still sucks, robs you of a sharper image, and as far as conversions go, it is totally unnecessary.

Another part of it on a totally ridiculous sentimental level is that the movie was playing in my favorite house, sloped floor, baffle wall, and all so the audio experience is much more enjoyable. And Joe, I can't even figure myself out at times.

AJG

Posted by Mike Blakesley (Member # 26) on 05-24-2011, 01:36 PM:

Consider the source. That "expert" is Richard Greenfield, from BTIG Research, who has proved over and over that he knows nothing about how the movie business works. He's the same guy who was urging the studios to jack up the film rentals to over 65%.

I am sure the novelty of 3D is wearing off, but what's surprising about that? Everybody knew that was going to happen.

I do think the guy is right about one thing -- the studios should stop making every single "event" movie in 3-D and save the process for when it can actually benefit the movie, like in Avatar. Rango and True Grit proved this year that it's not necessary for a movie to be in 3-D to be a good grosser.

Posted by Frank Angel (Member # 248) on 05-25-2011, 02:44 PM:

I still say you can't analize what consumers are reacting to without an even playing field. When you have tacked on a surcharge to 3D, it is going to impact BO trends. Before anyone can conclude that interest in 3D is waining, you have to eliminate the surcharge. THEN can actually evaluate whether 3D holds or looses audience compared to 2D. As much as I love 3D, I resist going to films that normally I would have opted to see in 3D just because of the surcharge on principal, knowing what a hoax it is.

Posted by Mike Blakesley (Member # 26) on 05-25-2011, 03:26 PM:

I don't see why you think it's a "hoax." If you go to a fancy restaurant you pay more for the higher priced food and nicer atmosphere, don't you? In almost every business, if you get a more premium experience it costs more. Why should a cinema give you the use of an extra 25 grand worth of equipment, plus all the extra labor required, for free?

I can see why people don't like the higher prices though. I've toyed with the idea of doing away with the surcharge and just raising our prices a dollar to make up for it and "spread the load" of the 3D across all the moviegoers -- it would be a lot easier and people wouldn't have sticker shock when they come to the 3D shows -- but I just can't quite get up the nerve to do that. (Yet.)

Posted by Aaron Mehocic (Member # 15) on 05-28-2011, 05:04 PM:

quote: Mike Blakesley
Why should a cinema give you the use of an extra 25 grand worth of equipment, plus all the extra labor required, for free?

What "extra labor" is required to run 3D?

Posted by John Wilson (Member # 269) on 05-28-2011, 05:48 PM:

quote: Another Wall Street dipshit
Attendance for Disney's Pirates of Caribbean: On Stranger Tides "would have been higher" this past weekend if half of its screens showed the movie in conventional 2D instead of just a third

Rubbish.

It did worse because the previous two were not exactly great movies. It just stands to reason that there would be a lessening in take for another one.

quote: Frank Angel
As much as I love 3D, I resist going to films that normally I would have opted to see in 3D just because of the surcharge on principal, knowing what a hoax it is.

Frank, why would you say it's a hoax? Surely you of all people can see why the surcharge is there. Someone has to pay for the upgrade. A business must pass on those costs to those who are using the service.

Posted by Frank Cox (Member # 6258) on 05-28-2011, 05:51 PM:

Extra labour:

Handing out the glasses to the customers on the way in.

Washing the glasses, with Dolby.

Picking up the little wrappers and shipping the glasses in and out with Real D.

Posted by Jesse Skeen (Member # 586) on 05-28-2011, 07:40 PM:

If I bring in glasses from a previous movie I saw, and don't take any from the theater, then they should charge me less. As I've said a billion times, I'd go to EVERY 3D movie that came out if theaters hadn't charged extra for them.

Posted by Frank Angel (Member # 248) on 05-28-2011, 07:48 PM:

You are right; businesses decide what costs they are going to transfer back to the customers all the time. Traditionally, though, exhibition has been very selective in what they will or will not visibly ask the customer to pay for.

Key issue in point, after installing $80K to $100K worth of digital equipment and shouting from the rooftops how much better it is than film ever was, exhibition never added a surcharge for digital equipement and surely with the economic burden digital imposed on the theatre owner, if ANY technology's cost needed to be recouped, it was the digital conversion. But that never happend. Same for the 7.1 sound upgrades or even for digital sound before that; where were the added costs for those premium theatre experience upgrades?

So how come all of a sudden, 3D gets a $3 uptick smacked on the ticket price when the 3D equipment is not nearly as expensive as the digital installation before it? And does anyone REEEEALLLY think after that $24K 3D upgrade is paid for by how many thousands of admissions with a $3 "3D" tag extra, will any exhibitor then drop the price back down to standard prices?

And THAT's why this lad is cynical enough to think they simply added the 3D surcharge because they knew they could. In fact, it was probably the 3D glasses which they figured they could insinuate as the reason for the surcharge, not for the 3D experience or the equipment costs. I am willing to bet that even today, most of the moviegoing public still think the glasses are why they are paying a surcharge (except try bringing in your own RealD glasses and say you don't want to pay the surcharge and see what happens).

And look, I am a capitalist....mostly. I think businesses should charge whatever the market price will bare. If they can dupe the public into paying more for a ticket price, by claiming this that or the other thing and the public buys it -- more power to them. But my personal opinion is that the 3D surcharge is souring the public on 3D.

I wonder how many people would be similarly soured on 7.1 sound or even digital projection if they carried a surcharge but which the public could opt out of by going to a theatre that didn't have the digital (scratchless, dirtless, colorfadeless, last screening the same as the first screening) projectors installed. How many people do you think would say like I hear being said about 3D, "Oh, I am going to see it in a non-digital theatre because digital doesn't add anything to the movie, plus the price is lower." Or, "I am going to see that movie in a theatre that is running it only in 5.1 sound and without a surcharge because who needs 7.1 sound?; it doesn't add anything to the enjoyment of the movie."

If the public were allowed to avoid additional surcharges for equipment upgrades, we might be surprised to find out how many technical improvements they could live without.

So yes, I think this 3D surcharge is, based on the history of exhibition technology upgrades, certainly breaking the mold and a very bad idea all around if, that is, no one cares if 3D survives.

Posted by Claude S. Ayakawa (Member # 1401) on 05-28-2011, 09:20 PM:

As many of you know, I also love 3-D. THe presentation of early 3-D I saw was anywhere from good to just plain awful. It did not take me too long to realize it was not the the 3-D process itself but the theatre that determines how good 3-D is. Regal's newer Real D installations at the Dole Cannery are excellent but nothing has been done with their first Real D auditorium when I was there for to see " THE CHRONICLES OF NARNIA- The Voyage of The Dawn Trader" a couple of months ago. Before seeing this film recently, the last movie I saw there, JOURNEY TO THE CENTRE OF THE EARTH a couple of years ago was extremely dark and the 3-D picture is still dark. Consolidated has been promoting their TItan XC theatre at the Ward 16 making people believe they have the finest projection system in Hawaii but what they have is a Joke!!! I saw TOY STORY3 there in 3-D when they opened the house and the picture was dark. Very dark and worst than the Dole Cannery 18' original Real D house.

The best house for 3-D in my opinion is Regal's Pearl Highland 16 in their largest auditorium, #12. They feature the best 3-D I have ever seen (Real D) and it is a joy to see 3-D movies there.

It is a plain fact that first impression is lasting and it is unfortunate many theatres that are not properly showing 3-D movies are giving 3-D films a very bad reputation.

I also agree about the extra surcharge for 3-D movies. Because of it, I have passed on many 3-D movies and just waited for the movie to be released on Blu-Ray.

_Claude

Posted by Mike Blakesley (Member # 26) on 05-28-2011, 11:17 PM:

quote: Frank Angel
after installing $80K to $100K worth of digital equipment and shouting from the rooftops how much better it is than film ever was, exhibition never added a surcharge for digital equipement

There's a difference. Digital equipment in and of itself doesn't add anything to the basic movie experience; 3D does.

Posted by Victor Liorentas (Member # 5272) on 05-28-2011, 11:38 PM:

I find most 3d movies take more away than they bring. [Frown]

Posted by Jesse Skeen (Member # 586) on 05-28-2011, 11:40 PM:

It did in the 1950s too, but they didn't charge extra then. Digital sound added to the movie experience, but they didn't charge extra for that either.

Posted by Joe Redifer (Member # 3) on 05-29-2011, 12:09 AM:

Digital sound brings much more to the movie experience than 3D does.

Posted by Frank Angel (Member # 248) on 05-29-2011, 02:03 PM:

Then they should be adding the surcharge to digital sound and not 3D if the reasoning behind the surcharge is because it's a "premium experience." Come on -- we all know the reason they tack on an extra 3 bucks is because they can. The public didn't balk so it will continue and possibly to the detriment of 3D.

Posted by Steve Guttag (Member # 268) on 05-29-2011, 03:30 PM:

They tack the money on because it DOES cost more to do 3D. It cost more for the equipment to shoot it, post-prod, project it and keep up with it.

-Steve

Posted by Joe Redifer (Member # 3) on 05-29-2011, 03:32 PM:

But doing 5.1 digital sound was free?

Posted by Frank Cox (Member # 6258) on 05-29-2011, 04:16 PM:

Digital sound is less immediately obvious to the customers.

A lot of people can't even tell the difference between mono and stereo but everyone knows something's going on when they're handed a pair of 3D glasses.

Regardless of actual value (or lack thereof), folks think they got something more and are therefore willing to pay extra for it.

Posted by Frank Angel (Member # 248) on 05-29-2011, 05:43 PM:

quote: Steve Guttag
They tack the money on because it DOES cost more to do 3D. It cost more for the equipment to shoot it, post-prod, project it and keep up with it.

Sorry, I'm not buying it, Steve. Since when is the production cost of a film translated directly to the price of the ticket. So according to that logic, a picture that cost $200 million to make should have a ticket price twice that of a picture that cost $100 million. It is not the way exhibition ticket prices are structured. And as I said, they certainly hyped digital projection to the max yet for all the cost of conversion, that price was never added as a direct tag on tickets as a "premium" even though it certainly was touted as a premium way to see a film. So it cost more to show a film in digital but where is the premium price tag? If you are claiming that the added price for a 3D ticket is because of the extra cost for the additional equipment, then if that follows, there should have been an additional "premium" ticket for those theatres that installed $100k digital projectors.

Which brings up an interesting question. Does the added surcharge get split with the studio? Is it mandatory? Or let's say the theatre decides it's a bad PR issue and drops the surcharge. Can it do that on its own or are they and the distributor in cahoots on the surcharge?

Posted by Steve Guttag (Member # 268) on 05-29-2011, 07:25 PM:

Frank,

Yes, anything in the ticket price the studio gets its normal cut.

You can not buy it all you want, but you are WRONG none the less. An exhibitor has a notably larger, on-going expense associated with 3D, above and beyond just showing the movie in 2D. If it is a Real-D theatre (the majority), they have a partner that is getting 50-75 cents a ticket (estimate since the contracts are shrouded in secrecy but most that have laid eyes on one have confirmed that price range) (which comes off of the exhibitor's end). So if the exhibitor only keeps 40-50% on aggregate, how much does he have to up charge to just keep his "partner's" fees covered and not LOSE money on just the 3D ticket sale. If they only pay 50-cents and they get to keep 40% of the box, they have to charge at least $1.25 just to cover an entity like Real-D.

The other 3D systems also have expenses associated with them. Master Image has a huge start up cost (over $30K), Dolby also has a start up cost associated with the equipment. And then there are the consumables...glasses that 2D does not incur. It costs the exhibitor REAL money to pay for these (some systems, like Real-D it is included in the partner fee, but for Dolby, the exhibitor pays...including for theft of the glasses).

Then there are the lamps, the exhibitor has to pay for a larger lamp and the electricity to run it. Larger lamps cost geometrically more money to run (last less can cost more).

You might also have screen expenses associated with 3D too though I discount those a bit since they are a relatively low consumable (last 10+ years).

Until you run the numbers on just what it costs to show 3D versus 2D, how can you make a claim that there shouldn't be an up charge associated with it?

-Steve

Posted by Monte L Fullmer (Member # 2797) on 06-17-2011, 04:22 AM:

600 to 1K hours per mandantory change and at over $1200 bucks a bulb along with some big box cinemas running their pre-show content through them projectors....really makes one wonder...

Posted by Sam D. Chavez (Member # 1841) on 06-17-2011, 10:26 AM:

Steve is being way too logical about the issue of cost of 3D and the need to pass it on to avoid losing money.

Cinema owners do 3D to stay ahead of the technology curve or the competition.

Not all cinemas do the 3D upcharge. The Grand Lake in Oakland does not charge extra. The owner paid cash for the projectors and did not do the VPF.

I believe the real reason for the upcharge is it helps pay off the hardware and the VPF. 3D is the excuse or pretext. There is also pressure from the studio to do the upcharge.

There is also a flawed presumption here that increased attendance (from installing 3D) will help pay everything off.

But, people are passing on 3D venues as there is no compelling reason to see a run of the mill "film" in low light 3D.

"3D; The Audience is Bored".

The whole upcharge issue is kind of silly. We don't see an upcharge for new seats, screen, popcorn machine, air conditioning.

Why? Because the audience would collectively say F*ck Off.

Posted by Frank Cox (Member # 6258) on 06-17-2011, 11:30 AM:

I didn't use the word upcharge, but I did increase all of my admission prices by $1 when I installed my digital cinema equipment and everyone knew that was the reason. I did post a sign on the door saying "New Admission Prices for Digital Cinema", though.

Nobody complained. I still get the occasional customer saying "How can you survive on these prices".

Posted by Mike Blakesley (Member # 26) on 06-19-2011, 11:54 PM:

Every now and then I think about doing away with the surcharge and then I remember that we never really get any complaints about the prices. We hear more grumbles about the glasses being uncomfortable than anything. The only thing we can't do a damn thing about.

I can't say that 3D has increased our attendance but it hasn't decreased it either.

One good development: Certain film companies are now allowing single screens to play their films in 3D and 2D. So progress is being made there.

Posted by Steve Guttag (Member # 268) on 06-20-2011, 06:50 AM:

Yeah, my wife's theatre is playing Green Lantern in both 3D and 2D on the same screen. Regardless of which version gets which showtime, the 2D version is always out-selling the 3D version.

Posted by Mike Blakesley (Member # 26) on 06-20-2011, 06:57 PM:

We are doing our first week of really having "mixed" showtimes this upcoming week, so we'll see how it does. Exactly half of the showings will be in 2-D. (Late shows, matinee and two weeknights)

Posted by Jesse Skeen (Member # 586) on 06-21-2011, 05:30 PM:

Can they add showings with mono sound too? I hate that annoying sound that comes from all around the place.

But seriously- if you're doing 2D and 3D on the same screen and 2D outsells it, are you charging less for the 2D showings, and are they at better times?

Posted by John Wilson (Member # 269) on 06-21-2011, 07:30 PM:

quote: DAVID LIEBERMAN, Executive Editor - Deadline New York
Analyst: 'Pirates' Was Hurt By 3D As Consumers Tire Of High Ticket Prices

Yeah, Pirates has been hurt by 3D. It's about to go over $1 billion worldwide. I bet that smarts BIG time.

[Roll Eyes]

Posted by Mike Blakesley (Member # 26) on 06-22-2011, 01:15 AM:

quote: Jesse Skeen

But seriously- if you're doing 2D and 3D on the same screen and 2D outsells it, are you charging less for the 2D showings, and are they at better times?

Well -- since this is the first time we've been allowed to do a full mixed schedule, it's hard to predict what will happen. We were "requested" to give the best showtimes to the 3-D.

I think maybe this area is a little behind the times in getting sick of 3-D, partly (or mainly?) because we haven't played every 3-D movie, and of the ones we have played, if the 3-D has sucked (*cough* ClashofheTitans *cough*), we've played the movie in 2-D.

So, for next week we're doing the weekend late shows and the matinees in 2-D, and all shows Wed-Thur in 2-D. The early weekend shows, and Sun-Mon-Tue will all be in 3-D.

Last week, we played Kung Fu Panda 2 in 3-D in the evenings, and 2-D matinees. The matinees weren't any busier than they normally would have been. So I don't know how this next week will shake out.

Part of the process will be educating people. (We still get people who think we have one show at 7:30 on Fridays, and we haven't had that showtime since 1979.) Once people hear about the 2-D shows, I expect the balance will start to shift. How much, is anyone's guess. Also, some people don't understand what's meant by "2-D."

On pricing, we're just charging the usual 3-D prices for the 3-D shows, and our regular prices for the 2-D shows.

Posted by Gregory Jones Jr. (Member # 6354) on 06-23-2011, 07:22 PM:

The only thing hurting Pirates is sheer lack of quality writing and directing.

Posted by Louis Bornwasser (Member # 3063) on 06-25-2011, 07:12 AM:

Is it possible that "it had runs its course?" Is it possible that America is tired of nothing but derrivitive stories? Louis

Posted by Tom Petrov (Member # 1534) on 06-26-2011, 10:28 AM:

Pirates 4 has made $968 million worldwide. I am pretty sure 3D helped.

Posted by Mike Blakesley (Member # 26) on 06-26-2011, 12:28 PM:

Dollar amounts arn't the thing. Numbers of butts in the seats is the thing. This Pirates was our 2nd-lowest attended Pirates.

We didn't play the original Pirates on the break, so it was the lowest attended for us. If we had played it on the break, this new one would probably have been the lowest-attended.

So the money was nice but the franchise is fading. I wish they would stop before they run it completely into the ground.