What Hollywood and the Movie Theater Industry Need is a Good Kick in the . . .

by Davis Freeberg, staff writer

During my life I’ve spent about four years working in just about every capacity at three different movie theater chains. Recently reading about Hollywood’s losing streak at the box office I’ve been a little glib and pleased that they are starting to feel some indigestion from the digitization of our society. However, as a former front line veteran of the movie theater business, I have to admit that to see this slump continue would make me a little sad.

When you work at a movie theater you don’t really do it for the money – you take the job more because you are drawn to the thrill of movies and entertainment. The pay is pretty lousy but the perk of free movie tickets is irresistible. During the period of my life that I worked for theaters I saw just about every major movie that came out.

Although I’ve certainly enjoyed many great films over the years I also saw plenty of lemons during my four year stint in the theater trenches – truly horrible pictures like Mr. Nanny, McHale’s Navy & Gold Diggers (which coincidently in my opinion is the worst movie ever made). Those four years of my life were fantastic, because even bad movies aren’t that bad when they are on the big screen and you don’t feel like you’ve paid for it.

It’s easy and convenient to blame the recent box office slump on piracy and home theater systems because they are definitely having an impact on consumer behavior — but the theater industry needs to realize is that there is another cultural shift going on as well. Consumers are choosing to lease their entertainment over buying it.

Companies like Netflix, Gamefly, Napster & Comcast all make it possible to subscribe for a fee instead of buy or pay per use. By charging per month, these services bring in substantially more revenue than businesses that charge per use. This revenue, by the way, is the magical reoccurring revenue that every business so covets.

My name is Davis, I am a TV addict. While some people are proponents of the ala carte pay per use pricing menus for their entertainment, if I was forced to pay for every show I watch on TV, I would either watch a lot less TV or pay a hell of a lot more. Some people like to go outside and play in the sunshine. I do not. At present by paying cable “only” $39.99 (plus $10 in taxes that they really should pay for) per month I am the equivalent of the super fat man who spends every day gorging himself at the smorgasbord.

So this brings me to my point. Why not offer a monthly subscription fee to your local movie theater chains. Consumers would be happy to spend $30 or $40 per month in order to have the privilege of seeing films the way I did when I worked for the theaters. Instead of collecting $40 per year from me now, theaters could instead bring in $480 each year with an all you can eat model.

Having worked on the books of several theater chains, I can tell you that it’s not about Box Office receipts. Hollywood eats most of that up. It’s about the popcorn. The margins are ridiculous. It’s not butter flavoring, it’s liquid gold. The increased traffic would create a boom in concession sales and this type of program would draw moviegoers out on weeknights, which is an especially dead period for the theater industry. If Hollywood was serious about backing this type of initiative, they could even allow for normal TV to be broadcast on Digital Projectors during the weeknights. How about Alias on the IMAX or an audience version of Survivor to go along with the real show?

Of course the problem with this business model is that it would require Hollywood to be innovative and for the studios to all get along. It blows my mind that the MPAA can get substantial backing for their piracy crackdown efforts but Hollywood still refuses to provide a digital solution or even agree on which DVD format to rip their customers off with.

Hollywood has missed the leap to the 21st Century. I have no doubt that Hollywood will survive this digital transition stronger then ever because I truly believe that content is king — but they should really try to come up with something more creative then their most recent desperate gimicky efforts.

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  1. Dave2 says:

    It’s not the cost that keeps me away from the theater… it’s the people.

    People with screaming kids, people with mobile phones, people kicking the back of your seat, people talking through the movie, people being idiots.

    People that don’t care that they are ruining the experience of going to the movies because they don’t have even a shred of common courtesy. It used to be that seeing a film with an audience was part of the fun… now it’s just an annoyance. I’d rather watch a DVD at home in peace and quiet.

  2. Brent says:

    While I can totally sympathize with Dave regarding the monstrosities that are our fellow man, there are few things better in life than watching a great movie, with a great crowd that’s into every second of it. 600 total strangers sharing the same exhilarating experience, there’s something special about that.

    I do like your idea about subscriptions to movie theaters since at this point, nothing I have at home can rival the experience of the big screen. But I’m not sure how exactly you could work out tickets for everyone who wanted them on demand. But someone else can figure that out.

  3. Mike says:

    A monthly subscription to the cinema? Why we already have this in the UK.

  4. Brant Smith says:

    Brilliant idea from theater-owners’ perspective, particularly for art houses where the audience loyalty is high (think about the financial problems of the Roxie in the Mission District of San Francisco).

    But, not sure how the book-keeping would work from a distributor/filmmaker revenue share perspective. I suppose we could take a look at how Netflix does revenue sharing as well as perhaps some of the other subscription services out there (Rhapsody, etc.).

    The link from Mike in the UK was particularly helpful. Curious to hear how it’s going. $20 a month (or thereabouts) is a steep price, but then again, that’s just the cost of two movies per month…Hmmmm.

  5. Janesvillean says:

    Hmm. Possible drawbacks. Lots of chains already have some sort of “season pass” program, but we all know they don’t work the first week a blockbuster is out and there are plenty of blackout dates. I suspect that theaters would quickly implement similar rules that would make a subscription just as inflexible. There’s a problem, you see — they have limited seats, and everyone wants to go out on Friday and Saturday nights. That’s why matinees are cheap — the theaters are empty. (But you know that.) Also, I strongly suspect that there would be a boomlet in subscriptions for the summer, maybe December, but not so much the other months of the year.

    If subscriptions were to substantially change viewer habits, e.g. more people showing up on Wednesday night in mid-October, they might have a chance.

  6. Somebaudy says:

    er… there’s already something like you describe. In the theatres run by UGC in France and Belgium, you can get a card that gives you un limited access. For a flat fee you can see any movie you want as long as the card is valid.

    There is no english-speaking web page describing it but the name of the card is “illimite” in France (ugc.fr) and “unlimited” in Belgium (ugc.be)

  7. Anonymous says:

    Interesting idea. Comment (FWIW): Hollywood get’s 100% of the ticket, and has for as long as I followed it. (Projectionist, then manager: 78-95)

    Affirmation: Yep, theaters are 7-11’s with big pictures on shined on the back walls. So from an exhibitors’ POV, monthlies make excellent sense. Hollywood–like any industry faicing iminent death–can MAKE this work if they want to.

    And I loved reading about your explanation of the “why” for working there. My gig was special-venue theaters, where we got to see them 300 times. The good ones I can still watch. BTW, my record was 900+, doing 3 runs of the same film in 3 theaters. Actually bought a tshirt from that one to comemorate the ridiculousness of that record.

    Everyone should work in a movie theater: it injects some reality into entertainment. You get jaded after spedning 3 hours counting Nerds at the end of a 14 hour shift…

  8. At present by paying cable “only” $39.99 (plus $10 in taxes that they really should pay for) per month I am the equivalent of the super fat man who spends every day gorging himself at the smorgasbord.

    Tom, don’t you know that businesses never pay taxes? It’s all factored into the cost of their products and services. So if your cable company suddenly made noise about how they were now paying these taxes, your cable bill would mysteriously go up $10.

    It’s not right or wrong. It just is.

  9. Lee Wilkins says:

    we have this in the UK, £10 with UCI Cinema per month gets you unlimited movies.