Opinion

What Is Killing Movie Theaters and How to Maybe Save Them

theater texting
Variety

There are many problems facing movie theaters nowadays. Sean Parker has proposed the “Screening Room,” a $150 box that would allow people to see new-run movies in their home for $50 each. Some big names (J.J. Abrams, Steven Spielberg) have gotten behind it, while others (James Cameron, Christopher Nolan) have condemned it. And in case you missed it (which is possible, because the idea was shot down as quickly as it was suggested), AMC Theaters had the brilliant idea [sarcasm] of proposing to allow people to text in movie theaters. Because, as CEO Adam Aron put it in an interview with Variety, “When you tell a 22-year-old to turn off the phone, don’t ruin the movie, they hear please cut off your left arm above the elbow. You can’t tell a 22-year-old to turn off their cellphone. That’s not how they live their life.”

As a 22-year-old and self-admitted phone addict (I’m that guy at parties who will run off to a corner if I haven’t checked my texts in over 30 minutes), I can promise you I would gladly hand it over before you sever a limb. That is not why movie theaters are in trouble, nor what keeps millennials away from them. Sure, there is always a person who will rudely check their phone during a screening of “Batman v Superman,” but that’s just an example of some humans being lame, not a larger problem about people being unable to go two hours without texting.

No, movie theaters have a bigger problem, and it’s almost cannibalistic.

The average movie ticket price in 2016 is $8.70. That may not seem like a lot, but that is up from $8.43 last year and $7.50 in 2009. Where I live the Regal charges $10.85; this is up from $10.75 just a few months ago and $10 a year ago (I remember “Furious 7” last April was the first a few subsequent $.25 price increases). Some places, like New York City, prices can jump above $13. To some, this seems unreasonable, which it for the most part is, but it isn’t entirely the theaters’ fault. Studios can collect anywhere from 80-90% of ticket sales, meaning when you hand your $11 to the kid at the counter, the theater is only making about $1.65 (the numbers vary, but these give you an idea of what they are). So theaters naturally have to charge more in order to make more.

But where they really make their money is on concessions, and that is where, again, they are almost killing themselves. I’ll again use my local upstate New York prices, but I think it’s fair to say they are around the nation average for chain theaters. Large popcorn is $8 (little known fact, the medium at a Regal is about 90% the size of the tub, so if you know you’re not going to need a refill, save a buck), and a large soda is $6.75. That’s nearly $15 for a drink and popcorn, whereas you could go to a Dollar Store and get the same amount of food for $3.

Unlike tickets where theaters only see around 10% of the profit, they make 85% off concessions, which means they’re making $12.75 off that $15 order, so it’s clear why prices are so high. There are constantly lines of people who wait sometimes 15 minutes to order, so obviously neither the price nor the wait time are keeping *everyone* away.

Clearly, however, there is a problem. 2015 saw the biggest non-inflation adjusted grosses at the box office ever ($11.304 billion), however that is from 1.304 billion sold tickets (one of lowest amount the past 10 years). If you factor in inflation of prices and the worth of the dollar, 2015 was actually the 16th highest grossing year since 1995. In less numbery words, many people aren’t paying to go see a movie anymore. Which is a damn shame, because going to the movies is my favorite thing to do on God’s green earth; nothing can beat the feeling of getting a cold Coke and warm popcorn on a summer evening. I’ve even gone to one of the fancy theaters that bring beer and mozzarella sticks to your seat as you sit in a reclining chair. Does it enhance the experience and will it save theaters? No, especially when it costs $22 just to get a seat in one of those theaters, on top of the cost of food, but it is one of those different and cool things I think everyone needs to try.

But I’m getting off point.

So what can be done? Well let’s go back to ticket prices. Like I said, studios can collect 80 to 90% of opening weekend grosses, and that number continuously goes down as the weeks go on. So if that number goes down (and naturally, so does attendance), why not after X number of weeks decrease the price of movie tickets? There is a reason many people don’t flock to see non-blockbusters; they feel they don’t need to see it and can wait. Seth Rnight beforeogen’s “The Night Before” made $43 million in North America. That is well below his grosses of $150, $101 and $87 million of “Neighbors,” “This Is the End” and “Pineapple Express,” respectively. The point could be made those were all summer releases while “Night Before” was November and opened up against the “Hunger Games” finale, and I’m sure that played a part, however I think also it is because many people were more than content waiting to watch the Christmas comedy on DVD in the comfort of their own home the following holiday season. Heck, when Rogen’s “Neighbors 2” drops this May, it will likely make more in its opening weekend than “Night Before” did in its entire theatrical run (the original film opened up to $49 million). But again, I’m getting off track. I could talk all day about box office stats and openings, that is my random area of interest.

I rarely see movies after their opening week. I’m a Thursday night preview if I can, Friday if I must and Saturday only if that is my only free window kind of guy. However I occasionally do see movies later in their run, for one reason or another, and when I do, the theaters are almost always empty. What theaters need to do is mark down ticket prices for movies after they hit, say, a month. If you didn’t cough up $10.75 to see “Ride Along 2” in its opening weekend, clearly that wasn’t a movie you were dying to see. But would you be willing to spend $7 to see it? What about five (you shouldn’t, that movie is awful, but I’m making a point here)? As I’ve beaten over the head, theaters don’t see much any profit off tickets to begin with. So what’s the difference between making $1.50 off a ticket and making 60 cents? Will that 90 cents make or break Regal’s bottom line? If you make movies cheaper as they play out, people will show up. It’s not like the 2010’s hit and a switch suddenly flipped in human’s brains that made them hate going to movies; people love going to theaters, it’s a social and cultural centerpiece. Many just don’t want to (or can’t) shell out $45 on tickets and another $25 on concessions for a family of four more than once in a great while. But if you only charged $5 to see “Zootopia” after it has been out for nearly two months, families would be more inclined to pay $20 on four tickets to bring their kids and then drop money on your overpriced food.

I don’t run a Regal Cinemas. I’m not a studio executive. Maybe this is an idea that has been passed around and proven to not be viable (although if they keep increasing ticket prices and think the inability to text is the reason people aren’t showing up, I doubt this notion has crossed anyone important’s mind). But something has to be done, clearly. People will always show up to see “Star Wars” and anything Marvel slaps its name on, but those aren’t enough to keep theaters alive; it just holds them on life support. The internet killed newspapers and has its hands around television’s throat, and it now has its sights set on the film industry. Whether it be Netflix’s own content or illegal streaming services, it is slowly but surely hurting the film industry, and in the process, making the theater industry eat itself. And there’s no fake butter topping and Coke to make it go down easy.

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