Movie theater chains ready to fight against premium video-on-demand offerings

Movie theater chains ready to fight against premium video-on-demand offerings

Summary: We have no idea yet whether the decision by a group of film studios to test offering new movies on demand for $30 per pop a mere few weeks after they are released will be a hit, but it is already successful in ticking off movie theater chains.Fearing that the on-demand titles will cut into the already shrinking audience that will go out to the movies, the National Association of Theater Owners immediately called it a "misguided adventure.

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We have no idea yet whether the decision by a group of film studios to test offering new movies on demand for $30 per pop a mere few weeks after they are released will be a hit, but it is already successful in ticking off movie theater chains.

Fearing that the on-demand titles will cut into the already shrinking audience that will go out to the movies, the National Association of Theater Owners immediately called it a "misguided adventure." Now specific chains have readied their knives against the participating studios, which include Fox, Sony, Universal, and Warner Bros.

Their tactics will range from not showing as many trailers from the participating studios to asking for lower rental fees for the films being released to on demand. AMC even crafted a press release touting "a new guest rewards program, better-for-you items, enhanced food and beverage offerings, dine-in theatre options and alternative, engaging programming for our guests to enjoy in our comfortable, state-of-the-art auditoriums."

However, none of the chains' proposals deals with the reason studios are anxious to put recently released movies on TV screens sooner: It costs too much for a typical family to go to the movie. While AMC and other chains may try to offer more amenities for current filmgoers, that doesn't address the fact that $30 for a VOD title is a fraction of the price of a family of four going to a flick when you factor in a trip to the concession stand.

After all, it's hard to sympathize with theater owners who openly admit that the ingredients in a $6 large popcorn only cost them 15 to 20 cents and have been fighting against new rules to make them reveal the nutritional information (or lack thereof) of said popcorn. That works against the moviegoing experience as much as any attempt by studios to get films in front of people who have abandoned going out to movie houses altogether.

Nonetheless, analysts believe the theater chains have a lot of leverage to battle premium VOD. In fact, they're bullish on the chains' stocks given the prospect that they can negotiate better rental deals with the studios.

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15 comments
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  • Good to See

    I'm more pleased about movie theatre prices coming down than the availability of new movies at home. There have been very few movies lately that are worth seeing at a theatre given the cost, especially with an increasing number of people having a good home theatre setup. I don't care about $10 for a movie as much as the aforementioned $6 popcorn. Hopefully these changes will make the movies an affordable entertainment option for more people.
    TBone2k
    • Popcorn is what keeps them open.

      @TBone2k

      It's that $6 popcorn that make the theater money. When I worked for the theater I got see why pop corn was so expensive. Very little is made off ticket prices and most of it goes to the studios and over the years that percentage amount has increased. I head one movie, a summer block buster a few years ago the studios too 100% of the ticket sales price on the opening weekend and after that 95%.
      voska1
  • Try going on a Saturday or Sunday morning before noon.

    Most AMC theaters have all shows before noon for $5. We like to get up on Saturday, have breakfast then go to a 10:30 or 11:00 show. It's a great way to spend the day if it's cold or rainy and as an added benefit the theaters are usually half empty. We saw AVATAR on it's openning weekend for $5 (in 3D) and the theater was only about 75% filled.
    Scubajrr
  • Haven't been to a movie theater in LONG time

    The movies are generally bad.<br><br>The prices are outrageous, in particular at the concession stands, which I avoid on nutritional grounds in any event.<br><br>I cannot stand to sit among a bunch of people who spend the entire two hours stuffing their faces and then drop the garbage on the floor for me to wade through on the way out.<br><br>Thanks, but no thanks
    Economister
  • Long and long between movie theater visits

    Movie theaters today are mainly aimed at attracting teens and separating them from their cash. Combine that with the horrid quality of current movies leaves me with no desire at all to fund their excesses. The money that I put into my home theater setup (seats 10) has more than paid for itself.

    I still do the mall trip occasionally, with children who *have* to see the hot new movie on the premier day so they can talk about it with their friends. As they grow up and can appreciate how that money can be spent on other things, I can only hope to break them of this habit.
    terry flores
  • RE: Movie theater chains ready to fight against premium video-on-demand offerings

    Good to see this competition. Its not so much the price of the movies because I'll catch the matinee for $7 but the price of the snacks.
    Loverock Davidson
  • Message has been deleted.

    bc3tech
    • RE: Movie theater chains ready to fight against premium video-on-demand offerings

      @bc3tech Are you kidding ???

      1) cost of operations (electricity/heating/cooling)
      2) Cost of movie rentals
      3) Cost of labor @ movie theaters
      mrlinux
      • RE: Movie theater chains ready to fight against premium video-on-demand offerings

        @mrlinux
        What in the items you mentioned averages $23 a person to see a movie? Try taking a family of six to a movie today. At almost $140 to see a movie, you could nearly fee the kids for a week.
        Rick_K
      • RE: Movie theater chains ready to fight against premium video-on-demand offerings

        @mrlinux & Rick_K<br>As mentioned above, almost NONE of the ticket price goes to the actual theatre. At least 95%, and often more, goes directly to the movie distributor. To make matters worse, theatres can NOT charge less. Distribution companies will refuse to rent you a print if you charge below a certain amount. So if you want to charge $5, you are free to, you just won't have any movies to show.<br>Not to mention the rapidly declining audiences. Factoring in both, cinema owners are trapped between a rock and a hard place. They want to charge less, trust me, they simply can't!<br><br>FTR, I used to work as a projectionist at a single-screen, two projector, pre-platter system movie house, a la Cinema Paradiso, so this information come first hand.
        DeusXMachina
    • RE: Movie theater chains ready to fight against premium video-on-demand offerings

      @bc3tech

      I worked in a theater back in 95, a summer job while I was in College. Back then 85% of the ticket sales price went to the studios. On top of that they had flat fee to get the movie in the first place. So the potential was there that you could actually lose money on movie. Last I heard that fee has gone up and the percentage is now around 95%-98%. Basically movie theater make all thier money of popcorn and pop sales. Which makes seeing as a pop costs 7 cents and was sold for $4.25 when I worked there. Same with popcorn.

      Theater aren't all that greedy, not greedy like the movie studios.
      voska1
  • I don't see the issue

    I don't see why theaters would be upset. If they are then they really don't understand their customer base and I'll be surprised they are still business if that is the case in the next 5 years.

    Now who are the customers? They are people who want a night out. People who want the big screen experience. People who love the movie theater pop corn. Really they are targeting those who want the experience and want a night out. Like teens who want out of their parent house and access to screen 50 times larger than their techie parents 65" flat screen home theater. It's parents who want a night out away from the kids. It's students who want to get out of dorm and away from anything related to studying. Those are how theaters need to cater too.

    What their customers are not, is the person dying to see that movie but doesn't care about the night out, experience or big screen. They lost these customers years ago to the internet and Torrents. Back 15 years ago these types had no choice but to go to the theater and see the movie. Now they can get it for free illegally. These type could change over time when night out means more to them than sitting their parents basement sticking it to the man.
    voska1
  • Movies at Home or in a Mob??

    There is no contest when it comes to this issue. I went to a movie instead of waiting for it to come to DVD and what a mistake! Tron Legacy 3D set me back $28 (1 person), it was crowded, noisy and the movie was junk. First time that I went to a theatre in almost 10 years for a new showing and now the last.
    We can take the $30 charge and enjoy it at home, and too bad for the chains.
    THX 1138
  • RE: Movie theater chains ready to fight against premium video-on-demand offerings

    Theatres still have some things to offer - mainly the much larger screen, great sound system and (most) the comfortable stadium seating. My main issue is that there are almost no movies anymore that I want to see, at least not badly enough to pay those ticket prices, no matter who the money is going to. I'd much rather wait until it comes out on DVD/Bluray and pay a couple of bucks for a rental.
    Unusual1
    • what types of movies do you like?

      For me it has to special effects that deserve a big screen. No point wasting money on comedy. Those are just as good at home on the 50". Romance and drama, boring! I haven't see a good one of those come out in years.

      I like the comic super hero movies personally. I grew up reading comics and it just reminds of my youth. Nothing Oscar worthy but entertaining enough for me.
      voska1