Film-Tech Forum ARCHIVE: Disney booking conditions changed?

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Posted by Carsten Kurz (Member # 5396) on 04-12-2015, 01:39 PM:

There is quite a bit of buzz currently about new WDS booking conditions that have come on german cinema operators. Disney sent out the new conditions last week in the form of registered mail to all cinema operators. I won't go into the details yet, but it has been said that WDS germany followed new guidelines of their US parent company. Now I'm wondering wether new condition changes have been put into operation in the US or elsewhere as well?

Quite a few cinemas have already booked 'Avengers - Age Of Ultron' earlier this year, and are now faced with changed conditions. Quite a few actually cancelled their bookings.

- Carsten

Posted by Mike Blakesley (Member # 26) on 04-12-2015, 02:42 PM:

There was a letter written to Disney by NATO decrying some of their new policies. I doubt it will make Disney bend though, since they never seem to bend much.

I don't remember much of what the letter was about since almost none of it applies to small towns. Example -- one of the new rules was, payment of film rent required within 7 days (previously it was 14). I guess that's a hardship for big companies but I always write my film rent check on the last day of the week so no problem here.

Posted by Marcel Birgelen (Member # 6801) on 04-12-2015, 05:28 PM:

About a year or 5 ago, Disney backpedaled on a "condition change" after many big chains in Europe threatened to boycott the release of Alice in Wonderland. Sometimes, but really just sometimes those boycott tactics actually do work. [Wink]

Posted by Frank Cox (Member # 6258) on 04-12-2015, 05:38 PM:

I pay all of the film companies by Electronic Funds Transfer instead of by cheque. It's actually cheaper than writing cheques and purchasing a stamp.

The service that I use takes two to three days to transfer funds from my online account to the recipient, and it costs 75 cents per transaction. I've never really understood why the transaction isn't instantaneous since it's all electronic, though.

Most of the film companies understand what this is if you call it a "wire transfer".

Posted by Marcel Birgelen (Member # 6801) on 04-12-2015, 06:30 PM:

quote: Frank Cox
I've never really understood why the transaction isn't instantaneous since it's all electronic, though.

That's simple: Every minute those funds are "in transfer", they can essentially do whatever they want with it, because neither end of the transaction can withdraw or transfer the money to somewhere else.

Financial institution's primary business model isn't to facilitate easy access to the funds entrusted to them, quite the opposite actually.

After years and years of deliberating it's finally possible to transfer funds between bank accounts from one Euro country to another within a working day. If you ask me, the technical infrastructure to do just this already existed back in the 70s, years before the European Monetary Union was conceived...

Transferring funds around the world in 2015 is still an adventure...

Posted by Scott Norwood (Member # 30) on 04-13-2015, 01:04 PM:

My understanding is that wire transfers (at least in the US) cost upwards of $25. Frank--is it that much cheaper in Canada, or are you doing something different?

Posted by Frank Cox (Member # 6258) on 04-13-2015, 01:58 PM:

I use Hyperwallet for this purpose.

I do most of my banking with the local credit union, and a few years back I asked what it would take to start making electronic payments instead of mailing cheques. They signed me up with Hyperwallet and now I write maybe one or two cheques per month -- I pay everything else through Hyperwallet.

It's a separate thing from my actual bank account, so I transfer money directly from my credit union account into Hyperwallet, then spend that money until it's gone and transfer more as needed. I gather that they have some sort of a contract or agreement with the credit unions to provide this sort of electronic payment system for them, since I got signed up for it through the credit union here and transferring money from the credit union into Hyperwallet is a painless procedure.

I did have to get them to give me a higher limit for payments since their default value is something like $1000 per transaction. That took a day or so for them to have my identity verified or something.

Posted by Justin Hamaker (Member # 2165) on 04-13-2015, 03:39 PM:

I wasn't privy to the terms of the new Disney policies. But one of the bones of contention in the NATO letter had to do with Disney using NATO's published average ticket price as a benchmark for setting the per capita.

As the NATO letter points out, the average ticket price includes prices from large format and premium cinemas. This causes the price to be inflated compared to standard theatres. Furthermore, the national average price doesn't account for theatres in markets where the local/regional average falls below the national average, often based on local economics.

Another issue was Disney wanted theatres to stop matinees at 5:00pm, rather than 6:00pm which is generally the industry standard.

Posted by Marcel Birgelen (Member # 6801) on 04-13-2015, 04:54 PM:

quote: Scott Norwood
My understanding is that wire transfers (at least in the US) cost upwards of $25. Frank--is it that much cheaper in Canada, or are you doing something different?

Here on the dark side, we pay zero to a few cents for a "wire transfer" and anything upwards of $25 for a check. It's sometimes hard to convince people in the U.S. or Canada you won't make anybody happy by issuing a payment using a check around here. Then again, that's where folks like PayPal make a lot of money.

quote: Frank Cox
It's a separate thing from my actual bank account, so I transfer money directly from my credit union account into Hyperwallet, then spend that money until it's gone and transfer more as needed. I gather that they have some sort of a contract or agreement with the credit unions to provide this sort of electronic payment system for them, since I got signed up for it through the credit union here and transferring money from the credit union into Hyperwallet is a painless procedure.

That sounds an awful lot like PayPal, doesn't it? [Smile]

Posted by Michael Putlack (Member # 6523) on 04-13-2015, 05:04 PM:

When I moved to New Zealand, I was surprised to find that checks don't really exist here. Everything is done by bank transfer and none of it costs extra. Film payments, payroll, purchasing concessions stock, everything.

Posted by Carsten Kurz (Member # 5396) on 04-13-2015, 05:30 PM:

quote: Justin Hamaker
But one of the bones of contention in the NATO letter had to do with Disney using NATO's published average ticket price as a benchmark for setting the per capita.

As the NATO letter points out, the average ticket price includes prices from large format and premium cinemas. This causes the price to be inflated compared to standard theatres. Furthermore, the national average price doesn't account for theatres in markets where the local/regional average falls below the national average, often based on local economics.

That's the major issue here in my opinion as well. They are effectively forcing all cinemas to raise their admission prices, based on their own made up 'nation-wide average'.

The problem is, if Disneys sets these rules, other studios/distributors will follow.

Some operators over here actually consider showing disney movies with a special 'Disney upcharge' to make patrons aware of the issue. Their minimum per-capita is a problem especially for our low children-admission prices.

Is there a place to look up these changed conditions for the US or this NATO letter?

- Carsten

Posted by Mike Blakesley (Member # 26) on 04-13-2015, 07:08 PM:

The NATO letter isn't (legally) online since it's confidential, but the main point in it is the average ticket price data.

The only other major point raised is the 5:00 matinee cutoff time. The letter alludes to other complaints about Disney's new terms being received but since they don't (and can't) get into specific negotiations about contract terms, the letter doesn't get into those issues.

Posted by Timothy Eiler (Member # 383) on 04-13-2015, 09:16 PM:

quote: Carsten Kurz
Some operators over here actually consider showing disney movies with a special 'Disney upcharge' to make patrons aware of the issue. Their minimum per-capita is a problem especially for our low children-admission prices.

One of the now closed drive-in around had a 12 & under free policy since it opened in the 50's. But due to per caps they would Charge $3 for 12& under only when playing Disney movies.
The Patrons Always blamed the Drive-In for being greedy

Posted by Frank Angel (Member # 248) on 04-14-2015, 01:59 AM:

The Drive-In needed to do a better job of educating it's patrons. I think the idea of calling it a "Disney Surcharge" is a great idea.

Years ago when we were teetering on the edges of establising our operation as being "theatrical" as opposed to "non-theatrical" in the eyes of the studios, we had a very hard time with....you guest it, The Rodent. All the studios but Disney where happy to treate us as a commercial art house even though our magnificent art deco 2500 seat, fully equipped theatre happened to be on a college campus. Disney wouldn't and refused to give up product even though they were playing titles in little rat holes around town...the worst dives in our area that you wouldn't send a dog into. Sent a couple of frames to the Cali office.

The NY Buena Vista office finally said we could play FANTASIA in its '70 rerelease and in 4 track mag, but then Burbank rescinded and pulled it, even though we had posters up and were playing a trailer for two weeks. I was sooo pissed that I got Filmack to make us a credit crawl which explained how sorry we were, but the Disney corporation was the one that didn't want our patrons to see FANTASIA in our beautiful theatre, but thought you should see it in mono sound and with the image badly cropped at other theatres in town.

We finally did play it, but they only sent a mono print. They claimed they "never made 4 trk prints." Gee, then I guess the collector that I borrowed the 4trk mag print we played from must have struck it himself, eh?

That was a long time ago. They's since become friends...well, quasi-friends, once they discovered how much overage a 2500 seat can return. We've run FANTASIA quite often over the years as a classic staple here.

Posted by Marcel Birgelen (Member # 6801) on 04-14-2015, 03:00 AM:

I'm telling you, a little boycottish behavior will certainly open eyes and EARS back in Burbank. It's all about the upcoming Avengers movie. They spent $250M making the movie, they will need to spend a whole lot more $M to market it. They can't afford a screw up, because their shareholders will demand blood if they do so.

Posted by Justin Hamaker (Member # 2165) on 04-14-2015, 03:17 AM:

Marcel, that's a great idea. There's just one problem: how do you get everyone on board. Who wants to run the risk of legal trouble by trying to organize a boycott? Who is willing to forgo the butts in their seats to set an example. Individual theatres choosing to boycott a certain studio or picture is not going to have much of an impact on the studio beyond souring your relationship and alienating customers who want to see the movie in question.

We can sit here and have a philosophical discussion about what needs to happen and how it might affect change. But realistically, who is going to put their business in jeopardy to try and make a point the studios won't get anyway.

Posted by Marcel Birgelen (Member # 6801) on 04-14-2015, 05:10 AM:

I agree with you that a few single theaters won't make a dent. But this hurts everybody equally, doesn't it? You need to get organized, get someone like Regal, AMC or Carmike behind you and they surely will listen.

In 2010, the Belgian chain Kinepolis (by far the market leader) alongside a few smaller exibitors treatened to boycott Alice in Wonderland, because they wanted to shrink the rental release window to a breaking point. Their motivation? The upcoming Soccer World Championship... Interestingly, the boycott didn't start at Kinepolis, but at a few smaller exhibitors. The issue did get national media coverage and resulted in Disney backpedaling on their decision. It's a clear indication that this kind of pressure works.

I guess sometimes you need to draw a line in the sand and make clear you'll start shooting if anybody crosses over it.

Posted by Carsten Kurz (Member # 5396) on 04-14-2015, 06:56 AM:

It's a different thing to tell them upfront that you want to boycott the movie, or that you simply do not book it. I have no confirmed numbers, but it seems a lot of german cinema operators canceled their existing bookings (confirmed before the conditions changed last week). I don't know the source of that number, but it has been said that already last week 400 german theatres were explicitly not playing the movie. What that means, however, we will see after the opening weekend.
Most cinemas do not make 'per-feature' prices, it's easy to see what that means for the overall price-system. And most cinemas have not yet recovered the cost of their digital installs, while studios are now making huge savings from it.

WDS 'bought' Pixar and the StarWars Franchise. Better make a statement early...

- Carsten

- Carsten

Posted by Melanie Loggins (Member # 6454) on 04-14-2015, 10:36 AM:

It't not just their payment policies. Since I run a one-screen theatre in a small town, I will not book a movie for more than two weeks, and they won't let us have Avengers 2 on the break for less than three weeks. When I asked my sales guy if there was likely to be any budge on that, he flat out ignored me. And then if you DON'T take something on the break, they make you wait several more weeks to get something. I showed Big Hero 6 five weeks later than I wanted to (but still paying on-the-break percentage), and ended up skipping Into the Woods altogether. I'm really looking at the April and May schedule to decide, if I can't get A2 until 4 or 5 weeks later, is there really any point? Maybe I'll just skip it? It sounds like heresy, but financially, it might work out just fine,

Posted by Mike Blakesley (Member # 26) on 04-14-2015, 11:58 AM:

If A2 is as big as the original, you should still be able to do good biz on it playing it later. The original Avengers was a 3-weeker for us too, and we actually considered holding it a 4th week, it was still doing enough business...but too many other things were piling up.

I know that NATO is trying to get the studios to loosen up with regard to sharing screens in small town situations, especially in a situation like this where you would have a movie for 3 weeks. Why not be able to bring something else in for the 3rd week and split the screen, as long as the incoming movie is aimed at a different audience? I don't know if progress is being made but at least they're talking about it.

Posted by Frank Angel (Member # 248) on 04-14-2015, 12:11 PM:

First off, a boycott doesn't put anyone in murky legal waters. As long as no one is conspiring (key word, conspiring) to do harm or conspiring to restrain trade, a group of theatres can do EXACTLY what the MPAA does -- set business guidelines that members may or may not adhere to. Ever wonder why Master Contracts from all the majors say just about the same thing, sometimes word for word? Studios don't seem to have any legal problem setting their conditions in unum unita, i.e., together as a group.

BTW, exhibition has such a group -- it's called NATO, AKA the "It's OK, I don't need any lube...I'll just relax" guys. Unfortunately, its members are not nearly so aggressive as the MPAA or as bold or as of single-minded purpose; the best word that comes to mind is wimpish. But that said, in today's climate of mega-chains plus titles opening all over the planet on the same weekend, all that really needs to happen is just a single chain standing up and saying, "We won't book a picture under those terms." and that would sent any studio back to the drawing board; certainly they'd come back a lot more meek and ready to negotiate.

The practical problem is, of course, as Justin says, that the small exhibitor can't afford to jeopardize his business to make a point. He doesn't have much of a choice -- either he capitulates or his business is damaged. BUT let one of the big three decide certain terms are unacceptable and that certainly would make a seismic impact. Any idea how much power an AMC or Regal would have if they decided not to book AVENGERS? Any idea how stockholders would rebel at the prospect of losing nearly 1/3rd of the available screens to play a blockbuster?

For the small exhibitor, it would take a NATO to wield that kind of muscle, but as said, NATO...well, don't hold your breath. The independent just has to suck it up and do what he's told. You want to be in the business, you pay the bag man.

So why don't any of the big three stand their ground? I think the answer is that they are all in bed together. The studios know what kind of a sleeping beast they are dealing with and they make sure the big 3 are not asked to do anything they would balk at. I grant you, when the AMC booking team says to The Rodent's sales team that they want to play a title but are not happy with such and such terms, they are not flat out ignored -- irksome sticking points are compromised away on both sides. That only happens to independent operators like Melaine and others in their technicolor dreams.

Posted by Melanie Loggins (Member # 6454) on 04-14-2015, 12:37 PM:

Mike, I know I'm threatening to derail the conversation, but when I DID open Avengers, the first weekend, I wasn't even 100% full. The next weekend dropped exactly in half. (82% to 41%) The one time I've held a movie over for a third weekend (Catching Fire) not only did my third weekend drop in half again, people in my town started to rebel. "Oh, are we the Hunger Games theatre now?" I got asked. Half-jokingly, sure, but I still registered the annoyance. And I lost the people who come every week for not just one week, but a habit-threatening two weeks. Three weeks is just not going to happen, not clean.

Posted by Carsten Kurz (Member # 5396) on 04-14-2015, 02:31 PM:

Actually in germany it seems to be an open secret that the large chains do not operate under the published terms and conditions anyway. They can put much more pressure on the studios if they want to. And they did in the past when they felt it was necessary.

As long as they are not hurt by new terms and conditions, they can simply ignore the issue.

- Carsten

Posted by Mike Blakesley (Member # 26) on 04-14-2015, 03:37 PM:

quote: Melanie Loggins
And I lost the people who come every week for not just one week, but a habit-threatening two weeks. Three weeks is just not going to happen, not clean.

What I do, both with 2-week and the rare 3-week movie, is I put the beginning and ending playdates on the marquee. That tends to spread the crowd out somewhat and we avoid sellouts. If people don't know how long a movie is playing, they assume it's just one week (since the majority of our movies DO play just one week) so they tend to pack into the first week because they don't want to miss the movie. But with those dates posted, the must-see-it-first people will still show up, but the more casual fans -- who are the majority -- will hold off until later on.

The only time this backfires is with the very rare extended holdover. Most recently it was Cinderella -- we played it 2 weeks, but then decided to keep it a third week because it was still doing well and there were no great alternatives...and it was mostly crickets all week.

I don't really think keeping a movie extra weeks threatens their moviegoing habit all that much, since hardly anyone goes to each and every movie. We have a lot of people who go every two or three weeks, so a movie playing a longer time isn't a big deal to them.

Posted by Manny Montes (Member # 5639) on 04-14-2015, 05:28 PM:

Melanie,

Obviously your theater is different and you seem to know your clientele well.

For me, in an area where we mostly cater to the younger avengers crowd, we would do killer even with a 3 week hold. The next movies are going to be hot pursuit, mad max and pitch perfect. I'd easily do more on the 3rd week for that than the first week of any of those movies

Posted by Melanie Loggins (Member # 6454) on 04-14-2015, 09:23 PM:

Mike, that's a good idea, the dates on the marquee! I'll have to think about how to use that. I DO have a few people who come every week. I've literally been asked, as I sold popcorn to someone, "So, what IS this movie this week?" We're just part of their routine, which is actually awesome.

Manny, yeah, we have a college in town, and Avengers 2 (like so many of those Marvel movies) opens the last day of finals. So most of the young people in town will be out of here by Friday afternoon. They'll come for the midnight (ahem, 8pm) show Thursday, and local peeps will come Friday and Saturday. By Sunday it's already slowing down.

Posted by Marcel Birgelen (Member # 6801) on 04-15-2015, 05:32 AM:

quote: Carsten Kurz
It's a different thing to tell them upfront that you want to boycott the movie, or that you simply do not book it.

It's also the thing that can get you some news coverage. Someone writing an article largely in your favor can help to educate the public in your favor. Disney surely doesn't want to be known as the big evil corporation they're sometimes are, they still have an image to defend, much more than any of those other studios. The Disney brand itself is a product, otherwise, nobody really gives a damn about Warner Brothers, Paramount, 20th Century Fox or whatever other logos get tagged onto the movies they watch.

quote: Frank Angel
First off, a boycott doesn't put anyone in murky legal waters. As long as no one is conspiring (key word, conspiring) to do harm or conspiring to restrain trade, a group of theatres can do EXACTLY what the MPAA does -- set business guidelines that members may or may not adhere to.

You do not even set guidelines, you just band together as a group with a common interest: The terms stay the way they are or else we won't play your content. You're not forcing anybody to join this group, although it would be good if they did, for their own future interests. If your own lobby group (NATO) isn't helping because they have conflicting interests or don't want to risk the "good standing" with the studios, then you should really take matters into your own hands. Or else it's better to already take the lube into your left hand...

quote: Frank Angel
So why don't any of the big three stand their ground? I think the answer is that they are all in bed together. The studios know what kind of a sleeping beast they are dealing with and they make sure the big 3 are not asked to do anything they would balk at.

It would be interesting if anybody could get something to prove this. If those big chains really got spared by those recent changes, you could stir up some dust at other levels and ask Burbank some interesting questions.

I doubt Disney wants headlines like: Big evil Mousecorp screws independent cinemas on the brink of biggest release of the year.

Posted by Carsten Kurz (Member # 5396) on 04-17-2015, 11:38 AM:

Is there no one with access to that original Disney letter with these changed terms? Doesn't seem to stir up much attention on this forum, is there so little in it?

- Carsten

Posted by Mike Blakesley (Member # 26) on 04-17-2015, 02:00 PM:

Since we use a booker, I haven't seen the original document from Disney -- the letter everyone's referring to is NATO's response to Disney over the complaints generated by that document. The NATO letter is confidential and thus can't be posted in its entirety here, but the points are pretty well covered here.

Posted by Michael Putlack (Member # 6523) on 04-26-2015, 03:44 AM:

Here is more info on the German boycott with some specifics of the terms be raised from 47.7% to 53%.

http://www.dw.de/german-cinemas-boycott-avengers/a-18402619

quote:

German cinemas boycott 'Avengers'

While Captain America and Iron Man star in the film, "Avengers: Age of Ultron" has turned into a David and Goliath story in Germany. Small cinemas are boycotting the release because of Disney's growing demands.

When the Disney production "Avengers: Age of Ultron" opens in Germany on April 23, fans will have to head to the nearest big city to watch it.

The Hollywood blockbuster won't be shown on 686 screens in 193 small towns. The local movie theaters, mainly in cities with less than 50,000 residents, have refused to show the super hero blockbuster.

The reason is that Disney has raised its rental fee from 47.7 to 53 percent of ticket sales, which cinema owners said came as a complete surprise to them. In addition, a few new rules have been implemented: The money Disney had previously contributed to advertising has been cut, and advances for 3-D glasses have also been eliminated.

"Approaching the industry with these conditions is fully unusual and, for me, a scandal," said Andreas Kramer from the

The hub of the protest is in northern Germany, where the I.G. Nord serves as an advocacy group. Its spokesman, Karl-Heinz Meier, said, "We are worried - particularly about eastern Germany. When prices go up, then we have a serious problem that could force movie theaters to close."

Across Germany, cinemas have joined in the protest. "In the North, 100 cinemas protested. But now everyone believes in us. It stretches from Rendsburg to Upper Bavaria, from the Rhineland to Thüringen - across the whole country. Everyone is banding together and not showing the film," said Meier.

He added that he'd also received moral support from large cinemas chains in urban areas, which tend to be more accustomed to high rental rates. "They'd like to support us, but they can't because of their contracts."

The industry is currently dealing with enormous financial pressure, according to Andreas Kramer. Huge investments in modern marketing strategies, rising overhead, the cost of updating theaters, rising personnel costs due to Germany's newly introduced minimum wage, and the shift to digital technology have made it particularly challenging for smaller cinemas to keep up.

Kramer estimated that around 3.4 billion euros have been spent in recent years to equip theaters with digital projection technology. That in turn saves film distribution companies billions of euros since they no longer have to produce physical copies. However, they haven't contributed to the costs of modernizing cinemas.

Public funding is available for cinemas that are particularly in danger of extinction. However, the government's efforts to keep theaters alive are being counteracted by Disney's new conditions, Kramer told DW.

"The cinemas that have received public funding are being pushed up against a wall with rental pricing that are 5.3 percent higher," he said. "And that means tax payers' money in the form of sustainable cultural support is in danger."

It's not uncommon for rental rates to vary, since they have developed over time. Thirty or 40 years ago, cinemas used to be divided up into those that premiered films and those that showed movies after their premiere. While new films were released quickly in the big theaters in urban areas, smaller houses sometimes had to wait months to get a copy - that is, a film reel.

The small theaters are affected the most

Modern technology makes that process obsolete. Since film rental prices are not regulated, Disney is technically allowed to adjust its fees and boost its profits.

Looking ahead to Star Wars

This isn't the first time cinemas have boycotted a major film release. In 2003, 200 movie theaters refused to show "Hulk" when Disney also tried to raise the rental fees, Meier recalled.

Other film distributors haven't been quite as pushy, but seem to be waiting to see whether Disney can hold its ground with its new demands - or whether small cinema owners can stand up to the Goliath.

Although Disney's Germany branch only follows orders from the parent group in the US, German cinema owners are confident they'll make headway with the boycott. "The new Star Wars film is coming out at the end of the year. Disney manages distribution - things could get interesting," said Karl-Heinz Meier.

Disney declined to comment on the boycott. "It goes against our company policy to publically comment on confidential details regarding our business relationships," said Walt Disney Studios Motion Pictures Germany in a statement.

For Kramer, it's an affront: "Disney is taking on Germany's entire cinema industry."

Posted by Mike Frese (Member # 4361) on 04-26-2015, 10:37 AM:

I believe any independent US theater would be tickled to death happy with paying only 53% as this will probably be a 64% movie (that is the top % for Disney, correct?).

Melanie, if you waited 5 weeks you will be paying that 64% too. I think I would play the 3 weeks or ask for a holdover number on that 3rd week. This movie is expected to break the opening weekend box office number (I am sure Stars Wars 7 months later will break that record). Disney has what people want and those people also spend a great deal at the concession stand.

Posted by Mike Blakesley (Member # 26) on 04-26-2015, 11:35 AM:

That's exactly our rationale for playing a lot of movies on the break... the percentage never goes down, or at least it doesn't go down until the movie this "thisclose" to video.

I look at those quiet final days of a long engagement as sort of a "break" from the usual chaos.

Posted by Terry Lynn-Stevens (Member # 7349) on 04-26-2015, 03:10 PM:

quote:
The Hollywood blockbuster won't be shown on 686 screens in 193 small towns.

I would like to know how many of these theaters usually open new release movies on a regular basis, its seem like everyone is going to be booking Avengers 2. If every theater is planning to open the movie, then the distributor has all the power and will dictate the terms.

Posted by Mike Blakesley (Member # 26) on 04-26-2015, 09:52 PM:

The distributors always dictate the terms. If exhibitors don't want to abide by those terms they can decide not to play the picture. But, considering this is probably going to be the #1 movie of the year (until December that is), most will opt to play it. There is a fine line between "intolerable" and "pain in the butt, but workable" and Disney is expert at treading just at the edge of that line.

Posted by Melanie Loggins (Member # 6454) on 04-27-2015, 04:37 PM:

I hear you, and I've done the math, and the concessions makes all the difference financially. But, ultimately, I will not show a movie for three weeks. I did it once and it was a bit of a nightmare. For me, having one title on my screen for that long moves into the intolerable. I've taken a deep breath and decided to embrace my small-townness and I'm ready to skip this movie altogether.

Posted by Justin Hamaker (Member # 2165) on 04-27-2015, 05:16 PM:

Melanie, I'm curious how far you are from a market where they will be playing The Avengers? Mike seems to be able to play things off the break and still do business, but I assume that has to do with how far it is to the next town with the movie.

I know how much grief I get from customers when I can't get the limited Oscar films at the end of the year. I don't envy you for not being able to play Avengers.

Posted by Mike Blakesley (Member # 26) on 04-27-2015, 07:25 PM:

We can play off the break and still do business but it's about half (or less if the movie is super-hyped) of what it would do if we play on the break.

My biggest problem is, almost everybody in town makes regular shopping trips to Billings, where they have 24 Carmike screens, so if we're not playing the movie they want to see, and if it's one of those "HOLYCRAPWEHAVETOSEEITNOW-NOW-NOW" movies, they're more likely to see it there. The category of movies where this problem is the worst is women-centric movies like "Twilight."

Posted by Melanie Loggins (Member # 6454) on 05-05-2015, 12:39 PM:

Justin, my sitaution is like Mikes: 30 minutes west is a town with a mutliplex and shopping, and 45 minutes east is a much larger town with 3 multiplexes and better shopping. It's routine for most people around here to leave town at least once week. (I did twice just this past weekend, and I was working!) There is not much shopping and even less eating in my town, so it's easy to make a day of the mall, Wal-Mart, eating and movie. I can open a movie (and still just charge $4) and still hear about people going out of town to see it, simply because they were already going to be out of town anyway. I wasn't 100% full with Iron Man 3, Thor 2, or Captain America 2. And having seen the reviews of Age of Ultron, I feel pretty comfortable not counting on three weeks. If my average holds up, and last weekend was already above average, I'll end up depositing more money this way.

Posted by Mike Blakesley (Member # 26) on 05-05-2015, 03:08 PM:

I'm curious Melanie, if you're running new (or almost new) movies, why are you only charging $4? If you're making it on that, that's great but it seems like you're leaving a lot of money on the table. Our adult price is $7.75 and people always compliment us on our nice low price compared to the city theaters.

Posted by Louis Bornwasser (Member # 3063) on 05-05-2015, 03:32 PM:

Melanie: I worked as a service technician for 40+ years. Many of my small town customers tried to hold prices down to help their customers; a noble pursuit. Problem is that they developed an inferiority complex toward their local helpful theatre. Profit is your friend and the friend of your customers, too. It allows you to keep up your theatre and give the locals a very decent place to go to be entertained. Hope this helps. $7.50 is a low reality these days.

Posted by Mike Blakesley (Member # 26) on 05-05-2015, 08:31 PM:

Looks like Disney actually gave in. I wish I could have a personal conversation with Bob Iger and be able to say "Yes, Bob, you DO create great value for the theaters, but why do you (and other studios) insist on torpedoing that value almost immediately by releasing the video too soon?"

Disney Backs Down on New 'Avengers' Matinee Rule in Wake of Theater Complaints

by Pamela McClintock 5/5/2015 1:49pm PDT

About a month ago, as Avengers: Age of Ultron prepared to open, Disney sent a note to theater owners updating its master licensing agreement, which governs the terms by which an exhibitor can play a film. Looking to get even more back from the box office, the studio wanted discounted matinees to end at 5 p.m., versus 6 p.m., the traditional cut-off time.

The directive prompted an immediate response from National Association of Theater Owners John Fithian, who wrote a letter to Disney stating he had received "an avalanche of complaints, concerns and fears" from his members.

Those concerns also included Disney's intention to use NATO's average ticket price (currently $8.12) as the minumum mark for splitting box office revenue, even though ticket prices could be lower in smaller cities and towns. If cinema operators discount tickets below whatever a studio minimum is, they must make up it up and chip in the difference to the overall pool. Every studio has a minimum, but they fluctuate market to market.

Though Disney itself didn't get barraged with individual complaints, it has decided to abandon the idea of cutting matinees off at 5 p.m. The studio also will revisit using the average ticket price across all markets, even though it has never invoked the directive, which has been on the books for more than a year.

For years, Disney wasn't as aggressive as other studio in terms of revenue splits with theaters. But two years ago, just before Iron Man 3 opened, the studio renegotiated its terms and is getting as much as 60 percent back on its big tentpoles, Avengers: Age of Ultron. That's in line with other big event pics from rival studios.

"We have obviously with our film strategy created and will continue to create huge value for the theater owners here in the United States and around the world," said Disney chairman-CEO Bob Iger when asked about the revenue split during an earnings call Tuesday morning. "And clearly with the hand that we have got -- Disney and Pixar and Marvel and Star Wars -- our discussions in terms of the rates that we get paid or the splits have factored in the films that we release."

Iger said he would not discuss specifics but that, "I want to emphasize, again, the investment this company has made in its motion pictures and the results are evident in terms of the value ... to the theater owners."

The Wall Street Journal first reported the dispute.

Hollywood Reporter article

Posted by Melanie Loggins (Member # 6454) on 05-07-2015, 09:33 AM:

The $4 ticket price was NOT my idea! (Neither was the split week schedule we keep.) When fundraising started (almost) 6 years ago, that was the price that was chosen. We're coming up on our 5-year anniversary, and I'm looking at raising prices. But we all know: a $1 increase in ticket price still nets me less than $0.50. To make a real difference, I'd have to go up to $6, and can you think of the reaction if we raised our prices $2?!?

Posted by Mike Blakesley (Member # 26) on 05-07-2015, 12:14 PM:

Well like I said above, if you are making it at your current price then that's great -- if you don't NEED to raise them, don't. There is something to be said for the "volume price" model. Wal-Mart does quite well with that!

But if an increase is needed, I would say a P.R. campaign is in order. Nobody is going to fault you if you explain that the increase is necessary.

Just point out the facts -

- The average ticket price nationwide is over $8.00

- You need to bring in more money in order to continue to make improvements (include the fact that digital projectors don't last forever)

- Your costs have gone up (wages, insurance, the cost of digital, well you know the list!)

- Even if you went to $6, you are probably still at least $2 or $3 less than the chain multiplexes (and I'll bet your concessions are lower too, and you probably have better service)

There is also the thought that someday, Disney and the rest might decide to enforce that per-cap thing to the letter, which would mean you'd have no choice but to raise prices dramatically to keep from losing money. If they start using the national average, that'd mean you'd be paying over $4 in film rental for every ticket you sell assuming the rent is 50%. This might not ever happen if you don't play many films on the break, but you never know.

Hope this helps!

Posted by David Buckley (Member # 2600) on 05-07-2015, 10:18 PM:

You might want to go up 50c anyway; sregular mall increases over a longer period of time attract less static than a single big increase "when it is necessary".

Posted by Manny Montes (Member # 5639) on 05-09-2015, 05:23 PM:

Fundraising... hopefully there weren't any promises about length of time you'd keep those prices.