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Movies Businesses The Almighty Buck

A Subscription-Based Movie Theater 308

Posted by Soulskill
from the works-for-tv dept.
When the local movie theater in Oakhurst, California went out of business, residents were stuck without a way to watch films on the big screen without driving for at least an hour beforehand. Now, three men are trying to resurrect the theater with one major change: instead of relying solely on ticket sales, their business model revolves around subscriptions. From the article: 'They ran models of Nelson's subscription-based theater idea, showing that to break even they would need 3,000 people, or 15% of the mountain communities, to sign up. For $19.95 per month, a member would be able to see each movie one time and buy individual tickets for friends. Non-members could buy a $16 day pass. While researching the theater business, Nelson learned that studios are transitioning to digital distribution. Thousands of independent theaters that couldn't afford equipment upgrades have closed over the last 10 years, according to industry experts. Hundreds of others — which, like the Met, still show print films — remain on the brink. The subscription business model could pay for the new equipment.'
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A Subscription-Based Movie Theater

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  • by godrik (1287354) on Tuesday January 01, 2013 @09:06PM (#42446527)

    UGC (the AMC theatres in France) used to (maybe still have) memberships that allowed you to see evey movie they show as many times as you want for 15euros. Lots of people were subscribing to it. I am sure they can manage it. Thought the $16 day pass for non subscriber seems over the top. I hope they also have regular $8/10 ticket for one movie. (most people wont see two movies in one day)

  • Better idea (Score:5, Insightful)

    by simplexion (1142447) on Tuesday January 01, 2013 @09:15PM (#42446573)
    Where I live in Australia it costs around $17 per adult to see a movie at the cinema. The last movie I went to had around 8 people watching it. If they charged $5 per adult I bet there would have been a lot more people watching that movie (that may have also purchased overpriced crappy food from the candy bar).
    It is ridiculous to expect $17 from someone to watch a shitty movie, considering the majority of movies pumped out these days are pretty terrible.
  • Re:too expensive (Score:5, Insightful)

    by steveha (103154) on Tuesday January 01, 2013 @09:20PM (#42446615) Homepage

    This is a way to have a movie theater in their town without driving an hour. You need to factor that into your estimations.

    If I lived an hour away from any other movie theater, I would pay $20/month to keep my local theater alive. Sometimes it's fun to see a movie on the big screen, with your friends.

    If that experience isn't something you care about, there's Netflix.

  • by rolfwind (528248) on Tuesday January 01, 2013 @09:36PM (#42446723)

    Payphone booths and arcades are. Plain and simple. Too many other options.

    I only go to the movies for the latest releases (so few that are worth it). The big players will hang on. I almost think the small theaters are being run out by design - because the longer a movie is out, the bigger cut the theater gets from ticket sales which start out at 100% for the studios.

    Today, people can buy 70" flat led screen for around $1900, an 83" Mitsubishi dlp for $1800 (92" for $2800). Rent 3-6 month old movies at Redbox for a little over a buck, stream it from Netflix, etc.

    It's a shame, because of the whole going out of the house thing (although, since I only view Matinees where it's empty - any potential social value dwindles to nothing). Speaking of social value, the only theater that's been built in my growing area the last 10 years has been one that is a restaurant and where you can order real food. So, added value options may grow from being a novelty to the norm.

    Who knows, with TVs getting cheaper and cheaper all the time, in 30 years, huge A/Ced and heated theaters that sit empty most of the time may have largely become a thing of the past except in places like Las Vegas or the planetariums.

    I view the 3D thing as largely a play to stay relevant, and it's probably not working all that well. I'm sure some theater owners are praying for Avatar 2 and 3 to come out soon.

  • by Anonymous Coward on Tuesday January 01, 2013 @10:09PM (#42446911)

    I book films for a local theatre. Unless there are major changes with film distribution terms, this won't fly. Films are rented to theatres with terms that require a minimum guarantee from the theatre versus a percentage of the boxoffice gross. For a first run title, the percentage will start high (think 90% or so) and drop each week until it gets to 35% or so. For a 90% title, the theatre gets $1 of your $10 ticket, and the distributor gets $9. Boxoffice reports are submitted daily and list the number of tickets sold for each price category and the total number of tickets sold and boxoffice take for the day for the film in question.

    There is no way that a subscription pricing model would work under standard film rental terms, since there is no standard ticket price on which to base the percentages. Any theatre that tried this without first convincing the film distributors to all change their business models (ha!) would never be able to get films to show. This is an industry that does not really like innovation and which is reluctant to change a business model that has worked well (more or less) for the last hundred years (or so).

    The D-cinema thing is an entirely different issue. Cost is about $60k per screen for the projector and server, assuming that a sound system already exists for 35mm and can be (mostly) re-used for D-cinema. Only DCI-compliant equipment can be used--this is not the same thing as a regular off-the-shelf video projector, as it contains specific crypto hardware to make movie piracy difficult (no doubt it will be cracked eventually, however). No one is actually forcing this conversion at the moment, so 35mm film is still viable for the time being. This conversion process has been discussed for the last ten years or so, but has only really started to speed up over the last two.

  • Re:too expensive (Score:4, Insightful)

    by jamesh (87723) on Tuesday January 01, 2013 @10:18PM (#42446961)

    They'd have to give a discount on food as well. At least in the US popcorn and a drink run you as much as the ticket.

    We hardly ever buy movie food, we just bring our own. The local (Australia) cinema won't let you bring a backpack or other large bag in (tripping hazard) but they haven't batted an eyelid when we've put the backpack in their lockers and taken in our own popcorn etc. Three of my kids and my wife can't have gluten so buying the food there isn't really an option - too much risk of contamination (who knows what they put in that 'butter'!).

    I prefer not to have food at all in the cinema, but when you have young kids it's a great way to keep them still while they get interested in the movie.

  • Re:Great Deal (Score:5, Insightful)

    by erroneus (253617) on Tuesday January 01, 2013 @10:29PM (#42447021) Homepage

    Membership has its priviledges.

    I am sure there are a lot of ways they could add incentives in with the price of admission. There is still something nice about the act of going to the cinema. Watching shows at home tends to be a less formal thing and so you usually don't turn your phone off and other distractions tend to take precedence. At the movies, you are locking yourself away and dedicating yourself to the big screen experience.

    I might return to the theaters if I had a subscription of some sort. I think perhaps $20/monthly would not be a plan suitable for me, but perhaps a "discount membership" which would enable me to watch movies at a discount and perhaps excluding "opening night" movies would be a better plan for me.

  • Supply and demand? (Score:5, Insightful)

    by _Shorty-dammit (555739) on Tuesday January 01, 2013 @10:30PM (#42447025)

    Why is that movie theaters seem to be about the only business that not only doesn't understand or even attempt to follow supply and demand with their pricing of both the attractions and the food, but seem to publicly admit that they don't think supply/demand makes sense? If nobody wants to buy something I'm selling, the price is too high. Any sane person in the world would lower their price. That's the whole idea behind supply and demand. But what do movie theaters do? Jack up the price even more, and claim that they need to do so to survive. On what crazy planet does that even begin to make sense?

    Popcorn is CHEAP. Why would you charge $7 for it and then complain that nobody buys it?

    Sodas are CHEAP. Why would you charge $5 for it and then complain that nobody buys it?

    I don't know about theaters around the country, but where I live we have "cheap nights" on Tuesdays, where movie tickets are a good deal cheaper than usual. And typically the theaters are packed full on that night. Every other night? You could count patrons in a given theater without running out of digits on your hands/feet. And even *THAT* doesn't tell theater owners that their regular prices are too high?! Your theaters are packed full on cheap nights because the price is easier to swallow. It shouldn't cost a family of four over $80 to go have a movie night, yet that's exactly what it cost a friend of mine to take his family to a movie on the weekend. Hell, it cost me and a friend, just two of us, almost $50 to go see 48 fps Hobbits a couple weeks ago. Almost $50 for two tickets and one popcorn/drink/chocolate combo. That's way too much money, and that is exactly the reason movie theaters are struggling, yet they just don't get it.

    Supply and demand. This is an insanely old concept that pretty much everyone seems to understand. Except movie theater owners. WHY?!

    Look at video games, and Valve's Steam store in particular. They've publicly discussed a few times over the past few years how they have seen insane increases in revenue whenever they have big sales on games, on the order or 40x increase in revenue in one case! Here's what I think was the first article discussing it back in 2009: http://www.edge-online.com/features/valve-are-games-too-expensive/ [edge-online.com]

    Movie theaters' own cheap nights prove that supply and demand is warranted in their market, just like any other. If they would lower prices of everything, tickets and refreshments/food, they'd see way more people, and way more money, come their way. If only they'd take their heads out of their asses.

  • Re:Great Deal (Score:1, Insightful)

    by Anonymous Coward on Tuesday January 01, 2013 @10:57PM (#42447165)

    I'll take my 65" HD screen with my $25k audio system in my dedicated home theater over going to the movie, ever. Sure -- the screen isn't 20 feet wide, but when you're sitting ten feet away from it, who cares? And it comes with the added benefit of watching shit when I want to, how I want to, and without hearing people eating popcorn, texting, chatting, or babies crying and children fidgeting in the theater.

  • Re:Great Deal (Score:5, Insightful)

    by Kjella (173770) on Tuesday January 01, 2013 @11:04PM (#42447213) Homepage

    I think you underestimate how much the local community might be willing to back up local business, if it's clear that the choice is otherwise having none at all. Once you start losing social facilities like the cinema then young people start moving away and you turn into a dying community of old farts. I live in a considerably bigger city and never feel my presence is "make-or-break" for services, sure individual shops come and go but there'll always be another. Out near our cabin I notice an entirely different attitude in the permanent residents, they'd better use the local services because otherwise they'll go tits up and then they won't have any. With apologies to Niemöller:

    First the market forces came for the cinema, and I didn't care out since I didn't use the cinema.
    Then they came for the restaurant, and I didn't care since I didn't go to the restaurant.
    Then they came for the hospital, and I didn't care since I was healthy and didn't need it.
    Then they came for the grocery store, and I found everyone else had already left.

  • Re:Great Deal (Score:5, Insightful)

    by Zeussy (868062) on Tuesday January 01, 2013 @11:05PM (#42447225) Homepage
    That is a 104 years of theatre subscription, in your sound system alone!
  • Re:Great Deal (Score:4, Insightful)

    by lawpoop (604919) on Tuesday January 01, 2013 @11:26PM (#42447367) Homepage Journal
    Where are people going to see movies these days? Pleasure Island from Pinocchio? I've never seen or heard anyone texting, talking, or whatever on their phones. Granted, it's not a monastery, but it doesn't disturb me or ruin the movie for me. If you haven't been to the theater in 15 years, how do you know the behavior has gotten worse?
  • Re:Great Deal (Score:3, Insightful)

    by Anonymous Coward on Tuesday January 01, 2013 @11:35PM (#42447433)

    my $25k audio system

    Wow, a fool and his money easily parted, indeed!

  • by raymorris (2726007) on Tuesday January 01, 2013 @11:37PM (#42447443)
    Why don't they lower the prices, you asked. You then mentioned they do lower the prices, especially on Tuesday. Weekdays cost less than weekend nights. A movie without popcorn costs a lot less than one with popcorn. Their web site has coupons. You can spend $5 going to the movie, or $25.
    Theatres are very good at letting you spend as much or as little as you want. Some people will spend $25 or more for Saturday night ticket, candy, and large soda. The theatres have pricing where they'll accept that $25 from those people. They ALSO sell to the $5 crowd, on weekdays.
  • Re:Great Deal (Score:5, Insightful)

    by Anonymous Coward on Tuesday January 01, 2013 @11:49PM (#42447513)
    You're just showing your age. Don't worry, I'm getting up there too. 90% of movies released in the theatre are for people under 40, often well under 40. They are for dates, college students and people with kids. Why do you think you don't care for new movies as much as you used too? They're not getting any worse, you're just moving out of their targeted demographics. Do you think back in the 50s that seniors went to drive-in movies?
  • by arth1 (260657) on Tuesday January 01, 2013 @11:52PM (#42447535) Homepage Journal

    You're assuming that only one person watches the TV, and that every movie goer lives in walking distance of the theatre.

    Face it, we have a TV anyhow. We might want to buy a bigger one if we're movie buffs. So realistically, perhaps only $500-$1000 in extra expenses. Add the cost of renting or buying movies.
    Then subtract the cost of going to a movie theatre, including tickets, concession prices versus home prices, travel, and extra time. For a family, it quickly becomes far more expensive, with less choice and comfort, sitting behind Big Afro, with miss Wheezy Death coughing down your neck, two tweens who giggle and just won't shut up on one side, and an idiot who txts every 30 seconds on the other.
    At the end, you smile and tell your friends how great a time you had and that you should do it again soon, while in your mind you hope "soon" is far, far away.

  • Re:Great Deal (Score:5, Insightful)

    by NFN_NLN (633283) on Wednesday January 02, 2013 @12:12AM (#42447637)

    Maybe you are the new-fangled type that prefers to watch media on their home entertainment system?

      I've found that certain movies are enjoyable on the big screen, and less so on the small.

    'White man make big fire... sit far away. Indian make small fire... sit close.'

    Sorry, I actually agree regarding the theater experience. But honestly, how often do you get to use the above quote in the actual context it was intended? :)

  • by Anonymous Coward on Wednesday January 02, 2013 @12:52AM (#42447811)

    Major theatre chains pay a film rental fee to the distributor based on overall attendance.

    Most film rentals are around 50% of net box, but are negotiated.

    Paying x% of the first weeks take stopped around 2000 when the major theatre chains went bankrupt.

  • Re:Great Deal (Score:3, Insightful)

    by AaronMK (1375465) on Wednesday January 02, 2013 @01:11AM (#42447893)
    What stops you from turning off your phone at home?
  • Re:Great Deal (Score:5, Insightful)

    by Fluffeh (1273756) on Wednesday January 02, 2013 @01:22AM (#42447947)

    Maybe you are the new-fangled type that prefers to watch media on their home entertainment system?

    Yes and No. Yes, I do watch quite a bit of media on the home entertainment system - but at the same time, for a select bunch of movies, I really do want to watch them on the big screen first. The problem is that there aren't many that fall into that bucket. The last lot I saw were The Lord of the Rings Trilogy and Avatar. Having said, I would be quite happy to maybe do a LOtR Trilogy one day, then see the hobbit the next day.

    Or you know what, how about Game of Thrones or BSG at the cinema? I do know quite a few folks that would probably LOVE to watch those as a weekly event. I guess what I was trying to say was why does a cinema have to show ONLY the newest movies (most of which I think are crap) - why not expand into a different niche?

  • Re:Great Deal (Score:3, Insightful)

    by carcomp (1887830) on Wednesday January 02, 2013 @09:17AM (#42449517)
    I live in an area such as this.. Indiana. It has many small farm towns where if lucky, there is a gas station and perhaps a restaurant / bar. The town I live in is large enough to support a Walmart, however the theater (built circa 1995) is lacking. Housing 2 "large" screens and 6 smaller ones. I don't know the specific sizes but i think the smaller screens have 4 or 5 seats on each side with one aisle down the middle) The larger 2 screens still do not compare to the newer theaters in Indianapolis which seem HUGE, and aren't even IMAX. The change to digital 3d has forced prices for tickets and coke sky high, but the experience is lacking b/c I can drive for 1 hour and pay the same price and watch in a comfy chair with better sound and video quality. If there is a way that subscription model pricing can be viable, sign me up. I've dropped cable, switched to netflix / vudu / dvds throughout my house, and have cut back in other areas as well. My family and I love going to the movies, but I can't seem to justify the $30 night out at the local theater because I know the options an hour away are so much nicer.

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