The movie industries broken business model

11 thoughts on The movie industries broken business model

1. There’ve been quite a few new small theatres opening in the US using the all seats are premium seats / the bar is a full service bar parts of your model. Those appeal to upscale consumers, but are priced away from the mass. And most of the rest of your points might be appealing to geek culture but could easily turn away the mass audience.

   For people who don’t have as nice a home setup as you, going the cinema can still be an event. The normal-price showings in the US do seem to be dominated by low- to mid-income attendees.

2. Totally agree with your assessment of the living room vs cinema. It’s painful to know the only trump card they hold is a period of artificial exclusivity. If movies were available at home day and date with the cinema I’d never go again, which reveals the fundamental lack of appeal of the offering.

   I followed the news about Sean ‘Napster + Facebook’ Parker’s latest startup (Screening Room) with some interest, but it rather predictably looks like the forces of the status quo will crush it if they can.

   http://www.hollywoodreporter.com/news/5-hurdles-facing-sean-parkers-876324

3. My personal take is this:

   A setup like yours is very far outside my means.

   Going to the cinema in a special occasion, like a date, or personal celebration is not.

   there are cinemas with special service and bars for people like you, they are expensive and offer a better experience.

   Run of the mill cinemas catter to people like me.

4. From what I gather a lot of the ills can be placed at the feet of the movie distributors. Either from directly dictated terms or knock-on effects from distributors ensuring theatres can’t profit off ticket sales alone. E.g. I hear it’s increasingly common for opening week blockbusters to start at 0% of ticket sales going to the theatre (only rising to 50% weeks later).

   1. It’s exactly as Kowh says, cinemas are squeezed by distributors into contracts where they hand over most of the profits in the most profitable period of a film’s release. They can’t refuse the contract because then they miss out on the blockbusters that bring all the people, so that have to rely on ridiculous mark-ups on extremely cheap unit-cost concessions (popcorn) to make any money, reinforcing their reliance on blockbusters.

      I reckon if you bought popcorn and a drink the staff wouldn’t even care if you had a ticket anymore.

5. Exclusivity is enough. If people want something then they’re willing to pay to jump the queue. Why else do people pre-order digital downloads of games when they could just get the same thing cheaper a few months later? And as long as there is money in this exclusivity, there’s money to divvy up between film-makers and cinemas. It may not be the majority of the revenue these days, but it’s too large a chunk to leave on the table.

   Film-makers are actually lucky in this regard – they can show their ‘recorded product’ in a sort-of-exclusive manner and still make decent money. Musicians, for whom the equivalent is a gig or a tour, don’t get this luxury because they have to drag the band from place to place and can only be in one town at one time. This is part of why the movie industry hasn’t been decimated like the music industry was – both have seen problems with sales of their recorded media but cinema showings are more cash-efficient than gigging is. (The other part is that the movie industry has a much better deal with on-demand/streaming services than the music industry does.)

6. Advantages of the classic cinema also include :
   * a reasonnably dating venue
   * a time-proven distribution channel that locks piracy out

   My view, though, is that you are globally right. My ideal viewing experience does not include walking 20 minutes, queuing and having noisy assholes in the same room.

   Outcomes include :
   * the “movie+” experience you describe, with bar, maybe food, …
   * the “alt-movie” experience where intellecutal films are followed up by a debate, or whatever
   * cinemas will keep being viable in urban areas, selling confortable access to premium video content. But this part of the market will shrink from its peak 20 years ago

   1. In my experience it’s the other way, it’s not uncommon to see bootleg DVDs that were recorded by somebody who snuck a camera in a cinema, and there’s also the part about movies getting leaked straight from the places that make the copies for the cinemas (the watermark is easy to blur out, and often people don’t care about it). So if anything, keeping cinemas around makes it *more* prone to piracy, not less.

      So really the only advantage left is the dating one, and that’s only because choosing one’s home for dating is considered lame, the whole point is to go out :P And in the end there are still other alternatives too.

      1. Is a movie even a good date? Lets go sit in a dark room and ignore each other for 2 hours in a place where nobody talks :D

7. Obviously home theaters are better than public theaters. But we only think that because we’re old. Younger people look at the two choices, and also consider the mating opportunities of each one.

   And they might not even be aware that they’re doing this. The limbic systems in our brains take all sensory input, adds emotional responses to it (fear, pleasure, good, bad…), then 300ms later sends it off to the rational part of our brain to think about.

   This isn’t entirely my idea, I’m borrowing it from The Advertised Mind by Erik du Plessis. A book that a very wise man (with a little TV) suggested I read.

8. If go in the theater you get to see it on a big screen. That would be why people go.

Comments are currently closed.