Tuesday, June 07, 2005

Addendum to KW's Post

I started out commenting here, and then I found out that it looked like an entire blog. So, I'm basically making a comment, or comments, here.

I worked for Carmike when they were the number one chain in North America, and then for Regal as they gained that status. That always seemed to be the most important thing to them--expansion and taking over existing franchises. Being number one in screens always trumped a better moviegoing experience at theatres people were already attending.

What happens is, a ton of money is spent on expansion, and the other theatres get neglected. I know, because I worked at a place that had very little volume compared to one across town that was next to the number one mall in the midstate at the time. We couldn't compete at all. We had a fair amount of people here and there, but laughable, and it eventually died (but, well, so did that other theatre...read on).

Existing customers do indeed flock to the higher-end theatres. Better sound, better seats, and so forth. But all this expansion seems to waste a lot of money. There's theatres everywhere now. Plus, with the expansion, there's a ton of prints being distributed. STAR WARS hit 9400 prints, a record.

The point is, no one is satisfied with what they have and do not intend to improve it. It's much easier to come out with a state-of-the-art complex than to improve an existing one. When Carmike's Thoroughbred in Cool Springs opened, both my old theatre (and 8-plex) and Carmike's gem 10-plex that outsold us at every turn vanished (18 screens vanish, 20 come in, under one roof).

The other problem is, and I've discussed this before, is that studios charging 98% and up for opening weekend gross are also handicapped by a system they created. I'll refer again to Hit & Run, the book about Sony's foray into buying a studio and putting the wrong people in charge. Sony wildly overpaid, into the billions, to run Columbia and Tri-Star. Then they spent extravangant amounts on stars--Bruce Willis, Sylvestor Stallone, and Arnold Schwarzenegger all commanded record salaries, and for every moderate-gaining picture, they lost more (for example, Hook was not nearly what they hoped it would be, but Last Action Hero tanked so bad that it rightfully could be called a disaster--and under the Guber/Peters regime the studio did not make one picture that rivaled Batman, the film they produced that gave them huge recognition in taking the reigns of Sony--in fact, the already-existing Columbia/Tri-Star stuff on TV like "Wheel of Fortune," and its syndication dollars, made the most bank).

The domino effect of that, of course, is staggering. I mean, Adam Sandler and Jim Carrey commanded $20 million, and people like Vin Diesel thought they deserved that. Everyone starts thinking because they "open a movie" and it does well, it was all them (once again, not that it looked good or was a good product, but that their very name sold the tickets)--and then all the executives think they should earn more because this guy gets a lot, and so forth. After awhile, a studio feels the need to ask for every possible dollar they can get to make back their investment. Nearly everything is costing $100 million to make nowadays.

As for the argument about DVD and home theatre, perhaps I'm thinking "too old" here, but let's say movie theatres died, and companies decide to open movies on DVD. There's still a stigma that I have that the movie that is being advertised is "straight-to-DVD." Maybe I'm wrong. I've always thought that there was a stormy, but beneficial marriage to opening a movie in a theatre first, so as there was sort of an "advertisement" to get that movie on DVD later.

If you think that straight-to-DVD for major releases is coming, then I say we're heading for another disaster before it even starts. I remember when movies were "priced for rental," meaning they cost $99 to buy and it allowed chains like Blockbuster to get some rental profit before the video's cost went down. I can't help but think that such a move, if that kind of release were to happen in the future, would be renewed. Because if a movie costs $100 million and it's going straight-to-DVD, there's going to be a cost hike--either in rental price or buying price. Imagine, a company sells their product to Blockbuster and a whole family can see the movie for $4 when it used to be $20 or more when going to the theatre. That's not going to work. Blockbuster is going to be charged a significant price rivaling the exhibitors' headaches, thereby increasing your rental cost. And who wants to own a movie they don't know is good in the first place? You're going to have to rent the movie for a skyrocket price and then buy it for an even more skyrocket price. It just doesn't make sense to me, but that's apparently the utopia that everyone seems to be foreseeing. It's gonna' be great!

Plus, hell...if studios are worried about pirating now...they'll be shell-shocked about the DVD thing. And then, what, we're going to get some new DVD format that can't be copied yet (only to be able to be copied six months down the road, and so on and so forth)?

The only way anything gets better is if people decide to cut their prices (this goes for professional sports, especially). We've already seen hockey go down the tubes, and ESPN isn't renewing their contract with them, and I feel hockey is just plain dead in the water. Movie theatres, and movies themselves, can die, too. These businesses (sports and movies) have only been around for 100 years, and it's nice to think they'll be just like food and housing, go on forever, but once people eliminate the "need" for them, the once-proud product will have to start over again. We'll have people shooting their own movies for minimal profit or no profit, just like the guys who invented film cameras did. Then, after that, if it catches on again, the mistakes must go un-repeated. But someone needs to tell Bruce Willis he's not worth $20 million, and the domino effects are not worth their new prices, either.


At 6/07/2005 07:10:00 PM, Blogger Kennelworthy said...

I think you're right on with the DVD thing. I'm actually hoping I didn't come across as suggesting that the "no more theaters...only DVD" would be utopian. Because I certainly don't agree with that. I think you're dead on that the price will rise. I guess that's part of the fear I have, because the consumer will bear the brunt of the cost.

But I do think that studios have other options besides DVD for extra revenue. As for what form movies would take if theaters ever died...I cannot say. I'd guess it would be something that hasn't been invented yet. But I don't know.

I'm just saying--and I don't think you were disagreeing with me--that something's gotta give. Studios can't keep charging what they're charging, exhibitors can't keep raising prices...or the whole thing will collapse. Believe me, there will come a point where the average customer simply decides that going to movies is too expensive (and annoying) and make up their minds to stop. What we do then...is anyone's guess.

But I hear so many customers who just blanketly complain about ticket prices or hotdog prices and act as though Regal and other chains are just greedy...that they could lower prices and the whole thing is solved. That's ridiculous. So my post was mostly about educating those movie fans who don't know how the dollars flow in the industry...so they'd have a better understanding as to why that popcorn costs the same as a steak.

I also didn't mean to completely absolve the exhibitors of any blame, because as Chris points out...their over-expansion is a major chunk of the problem. But even if that lesson has been learned by the theater chains...there's a financial flaw in the system that will eventually catch up to all parties involved...including us customers. I just hope it's after I'm gone, because there's nothing like the big-screen experience done right.

At 6/07/2005 08:47:00 PM, Blogger Chris said...

Yeah, absolutely no disagreement on my part, thus the word "addendum" and not "rebuttal."

I would like to further point out, though, that product trumps everything. These highly-touted DVD sales would be nothing, peanuts, chump change, etc...if it weren't for those DVD titles already having been played on television or the theatre. The highest-selling TV DVD of all time is "Chappelle's Show." It would not be the highest selling DVD if it had not already played on Comedy Central.

I think the only titles that would do well on DVD (and "well" on DVD is usually not what we call "well" at a theatre) are existing name-brands. I think a HARRY POTTER could open on DVD and sell. But how about THERE'S SOMETHING ABOUT MARY? Don't think so.

This is why I cringe when I hear of people "forecasting the future" as they see DVD and internet taking over. If this is allowed to happen, you are embarking on the final nail in mainstream movie-watching.

At 6/08/2005 09:08:00 AM, Blogger Kennelworthy said...


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