Tuesday, July 05, 2005

More Box Office Magic and the Idiocy of Media

The grosses are out, and surprise! War of the Worlds didn't beat last year's Spider-Man 2 same-weekend, out-of-stratosphere opening take and thus adds more fuel to the fire for the ridiculous media to continue claiming that this is a box office slump we are experiencing in 2005.

And now, with Fantastic Four and Dark Water opening, along with what should be a fairly strong 2nd week for WOTW, we're seeing speculation that the "slump" could possibly come to an end, as last year's Anchorman and King Arthur didn't perform to expectations, and so, a big weekend could mean the end of the slump.

I'm sorry, media, but I'm not allowing you to get off that easy. You want to tout "slump" for 18 weeks and now, just because one week could possibly be better than a comparable week from last year, the slump is over? Let me ask you something. If, say, Jason Giambi hits .220 with 5 HR for 18 weeks, and then one week hits 4 HR and raises his batting average to .235--is the slump over? We're looking for consistency, right? If you want to raise questions like, "Why aren't people coming to movie theatres?" and list a hundred reasons as to why that is, then those reasons do not magically vanish because of one friggin' week. They especially don't vanish just because Fantastic Four and Dark Water are opening--are we going to start calling those movies the saviors of the industry, if they indeed help buoy the weekend past last year's comparable weekend?

Slumps, ladies and gentlemen, are a measure of futility, a period of ineffectiveness. We can take the literal definition of slump and twist it to mean that, compared to one year, business is slumping. But it's not true. Let me illustrate with a simple scenario that paints a clear picture of what I'm talking about.

Barry Bonds in 2001 hit 73 HR (a record), with 137 RBI. The next year, he hit 46 HR with 110 RBI. So tell me, was Barry Bonds slumping in 2002? Was he just not a dependable player for the Giants then? Was then-manager Dusty Baker looking for another bat to replace him? Was he looking for a solution for Barry's futility at the plate?

My biggest problem with this idea of "slump" is that people actually believe this. People read the paper and say, "Wow, these movie theatres must be ghost towns." Tell me what kind of world we live in when a product makes $200 million worldwide in 5 days like War of the Worlds has and we still have people saying, "Not good enough." I've said it before in an earlier post, but you cannot gauge box office like this. I've been looking at the grosses, and the budgets, and essentially, movies are making money. There are a few that haven't, like Cinderella Man, but even a piece of turd like Land of the Dead is going to end up profitable. All of the big box office bonanzas of the summer have made their money back and then some.

On the actual theatre front, we all know what the problems of theatres are and where there are actual factors that turn people off of the moviegoing experience. But these factors have always been in place. It's always been expensive to go to a movie. People used to bitch about $3.25 for a matinee price. As KW's post about why movie theatre prices are so high illustrates, it's a necessary evil for those theatres to hike prices--because of Hollywood's excess. And now the movie theatre problems are amplified because of the bad product.

I was talking to KW the other day, and he said he was tired of people talking about all the remakes coming out, like, "When are they going to stop making remakes?" As we all know, there's not a chance in hell that's ever going to happen. Hollywood has been remaking practically as long as they've been making. We will not see the end. My biggest contention with remakes is how many are produced, with no point. We're seeing these sort of fade away at the box office, although The Longest Yard's nearly $150 million take does not bode well for an overhaul. I firmly believe that Hollywood executives are looking at the box office, and they see all the bad remake grosses, they ignore them and see the one or two that make money and that tells them to greenlight more. The other problem is pointless sequels--like Miss Congeniality 2. The dearth of creativity this year is about the worst I've ever seen. If the number of these remakes and sequels could have been slashed by half, and some interesting product put in its place, then I wouldn't be bitching nearly as much about it.

I'm going to accept the blame for the theatres at this point--and make sort of an argument that comes back to this ridiculous media coverage.

In addressing some comments made lately on the aforementioned KW post, I have often chewed over these very concerns. One person says, and I'm slightly paraphrasing, "...paying $10 for sticky floors, bad recycled air, generic and generally artificial unhealthy snacks, stadium seating, and to add insult to injury, commercials!" and then asks if Starbucks can do it, why can't theatres? There is no viable excuse to give to a person who thinks this way, and by no means do I condone the poor theatre conditions--so let me preface this by saying, "I'm not making a defensive argument here." I will say that theatres pay minimum wage, and if you think good help is hard to find, then imagine trying to find good help for a large multiplex, daily, for an average of around 10 hours a day. Starbucks can be awesome because it's a small business and takes minimal staff to run. To run a theatre like a Starbucks (like for instance, let's say it's a 10-plex) it would take a monumental staff that theatres cannot only not afford but cannot assure will do the job.

Another person remarks, "Set the ticket price to $1 and sell and the sodas for $1. Now Regal should make BANK! See, the studios will have 99% of $1. And the movie goers will have lots of money to buy soda and stuff. Theatures can sell T-shirts, or food or whatever.. Currently it costs me $40 to take my wife and kids to the movies. If the movies were $1, I would be happy to give the theatures $30. Appearently a MAJOR increase to the theature over the ZERO I give them now. Why won't it work?"

Just an opinion here, because I've never been a part of the corporate structure, but I imagine there's a minimum ticket price that studios need in order to first-run a movie. This may be more KW's expertise, since he was closer to that side of it than I've ever been. But if you charge $1 for a movie, then you're not getting a blockbuster film to show, not for three months or so anyway. Now, as for concessions, I've always held the belief that reducing the price there would mean you could sell more. Like, Snickers costs $3.50 a box. One person says, "OK," and the other person says, "No way." Then, I reduce the price to $2.00. I get both customers, and I make 50 cents more (and, the probability across the board is that I make a ton of money at the end of the day by adding up all those 50 cent profits). The other problem here, again, is staff. I swear thousands of dollars are being lost a week from the long lines at concessions, whereby someone who would likely buy concessions bypasses it altogether. But with the domino effect from Hollywood (outrageous budgets, excess, salaries, unfair percentage takes), movie theatres generally get the shaft when it comes to running everything perfectly, just because of the wages and the sheer size of the business--a movie theatre is usually many times the size of a McDonald's, and none of the people paid to run it are making lots of money. So they work accordingly. The number of worthless employees at movie theatres across the nation could fill the Grand Canyon.

And I'll reiterate, I'm not defending the ways of the movie theatre. Under these conditions, it's bad publicity. But since people like movies, the conditions of a movie theatre are unlikely to change. Now, we could all say, "Screw it," and not go tomorrow, and movie theatres would die. But like I wrote in my addendum to KW's post, the same problems would carry over to video stores, or the internet, as far as prices go. We would be hearing, "Remember when it only cost $4 to rent a new video? Now it costs $20."

But in general, the whole reason to address these things are from the erroneous perception that movies aren't making money. The media is telling us, "Box office is slumping," but what a slump to be in! Wouldn't everyone like to make $100 million and be considered slumping? That's the problem with the story. In the very act of announcing that box office dollars are lower, it makes it sound like no one is going, when in fact the opposite is true. There are still lots and lots of people coming to theatres, despite the problems. In that way, it's almost like being a fan of the Chicago Cubs (sorry, Jonathan). People will always come out to root for the Cubs, and they'll sell out Wrigley every day, and it doesn't matter who's on the field. So, if you're the Cubs, the pressure to put out a winning product every year cannot be intense. People just love the Cubs, and they are consistently a top draw when they visit other towns, too. But people will still pay $6 for a Coke at the stadium, and a $4 hot dog, on top of a $17 ticket.

Which brings this up--why are movie theatres consistently the whipping boy for high prices, when every other form of event entertainment--sports and theme parks, for instance--get a pass and they are way higher?

I'm just saying...I hope the point of this (yes, long--don't kill me) post isn't lost on people. I'll review:

1. The media is stupid for saying box office is in a slump by comparing this year to last year and not comparing cost to net.

2. Movies are not dying, and from my perspective, not dying soon. People love movies, and will always come to see movies. If they want to stop coming to movie theatres, then they will have to stop going anywhere to see movies. Movies themselves will have to lose the interest of the public.

3. Movie theatres clearly need to be better, but what is stopping them from continuing to be mediocre? See point 2 if you think that any one person's buying power is going to cause any change.

4. I personally do not think everything's all right with movies, studios, and movie theatres. I think they are doing a poor job of customer satisfaction. I especially think studios are handling creativity poorly. In sum, yes, after all I have said, movies are not making the money that they could be making. They are making enough to survive, but not enough to grow.


At 7/05/2005 11:07:00 PM, Blogger Rusty said...

I just got through reading your post about movies prices. I live in a town where there is alot of competition for movies. They opened 16 movie cineplex here. The old movie theater has 6 theaters, 5 with your general small screens, and one with a fairly decent screen. This movie theater lowered their price to $2 for matinee shows (Before 6pm) and to $4 for shows after 6pm. You wouldn't believe how busy this theater gets on the weekend. They constantly sell out on shows that are popular. Their concession stand is always busy. I know that for a fact, since I have been going to the movies alot more since they lowered their prices, I tend to buy something at the concession stand. I would usually go to a movie maybe once a few months to where I might go see a movie maybe once a couple of weeks to recently I saw 3 in the last week. When I had to pay 8 bucks to see a movie, I usually didn't spend a dime at the concession stand. I am now finding that I am buying a medium popcorn and a large coke. So lowering the price of a movie, might be worth looking into.

At 7/05/2005 11:19:00 PM, Blogger Henry "Conductor" Gomez said...

I just stumbled onto your blog and I'll be bookmarking it. I just saw Batman begins, which I enjoyed thoroughly and your reviews are dead-on.

Keep up the good work.

At 7/06/2005 09:14:00 AM, Blogger Chris said...

That's an interesting comment, Rusty. I had no idea, to tell you the truth, that such a thing could be done. That certainly means that a theatre can lower ticket prices--but of course, I don't know the entire story of this multiplex that has opened. There might be some other factors at work that allows them to do this. Of course, if there aren't any, then that's a refreshing direction that theatre is taking.

My reasoning comes from working at huge chains. I've always thought that if a chain could lower prices and get more people through the door, then they would have. But obviously, there are some tightly-held beliefs within the corporate system that prices must always go up.

Hearing comments like these make blogging special.

And thanks, conductor. I'm glad you enjoy the reviews on this site. Keep on comin'.

At 7/06/2005 10:14:00 AM, Blogger Kennelworthy said...

Great post, Chris!

Thanks for commenting, Rusty and Conductor...glad you're reading. Hope you'll come back frequently.

On the topic at hand, and to address Rusty's comments: I'm guessing here, but your town isn't a major metropolitan area, right? I mean, here in Nashville, movies are around $8 for an evening show. In New York City, on the other hand, the evening shows are more like $10 or $11. The larger the city, the higher the price.

In addition, the smaller the town, the more flexibility the studios give the exhibitors to lower prices. I would also bet that your local theater isn't a Regal or AMC--I might be wrong here, but it seems likely. Again, the smaller exhibitors (who have a harder time staying afloat) get better deals from the studios.

I went to college (and started my theater management career) in a town of about 60,000. They had two theaters of ten screens each. And tickets cost $4 for an evening show. I say that to explain why I think you're in a smaller town. Those theaters also were not the big dog companies, but were smaller, locally-owned chains.

I can assure you, no matter how much I like your idea of lower ticket prices, that it will never happen across the board. Hollywood will allow it in select smaller cities and with select smaller chains, because they need all the screens they can get to be in operation. But if you town ballooned to the size of, say, Nashville, (population somewhere around a million), then the ticket prices would soar.

So, yes...in certain cases the lower prices are allowed, and they work as far as bringing in tons of customers regularly. But the studios hold the power. They can pick any aspect of an exhibitor's operation (ticket prices, house placements, showtimes, etc...) and make it a sticking point for negotiations. And ticket prices is where they do this a lot.

On a completely unrelated matter, I wanted to talk about concession prices, by telling a quick story. My roommates (husband and wife) went to the movies the other day. Then, after they returned, we all went out to eat. We were talking about their movie, and they started complaining about how much they'd paid for popcorn and soda and candy. I wanted to explaint to them why the prices are so high (but they wouldn't have cared) but then I realized....they're complaining about the prices...but they willingly paid the price! They stood in the long lines and they forked over their many dollars of their own free will...and then turned around to complain about it. And this is a common, common story. I can't tell you how many angry customers cussed me out over concession prices while holding a 44 ounce Coke and a bucket of popcorn. My line of logic to people like this is: "If you don't like it, don't pay it."

And this is why the prices won't come down on concessions. One, the theaters need those prices to stay high so they can make enough money to stay afloat. Two, people keep paying those high prices. I imagine if there were some nationwide boycott of concessions at the theaters....the exhibitors would be forced real quick to lower those prices and work out some other new way to make some money. But that will never happen.

Good point too, Chris, about sports stadiums getting a free pass on concession prices while theaters take all the crap. It's completely true. In fact, prices at Predators and Titans games are higher than at the movies, but I don't hear people moaning about that.

I saw an article today talking about how the Fantastic Four hope to "Save the day at the box office". Sheesh. I'm as tired of all this as you are. And, as I told you in our conversation the other day, I think all this slump talk...all this whining from Hollywood about a slump...is actually contributing to people staying away. "Movies are in such a slump that there just must be nothing good out...so let's stay home tonight."

At 7/06/2005 08:17:00 PM, Blogger Jonathan said...

In response to Rusty's comment, there's a local theater in Murfreesboro where I go a lot. The ticket prices are about the same; I think there fifty cents lower than Carmike, but the cool thing is the concessions. He charges as little as 1.00 for a some of the candy, small popcorn and small drinks. You can actually get popcorn, a couple drinks, and candy for five dollars. It makes me a lot more enticed to go.


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