On average, movie theaters only use about 15 percent of their total capacity, a shocking statistic to anyone who had to lube themselves up to cram into a multiplex during The Hunger Games’ opening weekend. For all the talk of a box-office renaissance, the truth is that most of the gains of the past decade have come from rising ticket prices, not more people seeing movies.
Last week, the high priests of the multiplex gathered in Las Vegas for CinemaCon, the annual theater-owner confab, to figure out how to change that. We can’t blame you for not going — the sight of hundreds of these milky-white theater-moles squinting in the harsh desert sun can be a disturbing one. And so, we here at Vulture decided to find out just what sort of box-office blandishments might be coming your way.
The loyalty of the Hollywood consumer is rarely rewarded. This holds particularly true for movie-theater patrons, who generally fall into two camps: the ultraloyal cinephile and the below-“average” moviegoer.
“[But] an ‘average’ in the case of this industry is a miserable number to look at,” says David Andreakis, a behavioral economist and decision science expert at Amia, a customer loyalty research firm. “Because it’s actually rare to find someone who sees the ‘average’ number of movies. There is a huge group that sees just one or two a year, and another huge group that sees a dozen to twenty — and they walk side-by-side.”
The problem with theaters rewarding such avid cinephiles (who comprise an astonishing 60 percent of movie business grosses), of course is, “there’s a saturation point. There’s no incremental benefit, so they’re just subsidizing [their best customers.]”
The truth that theaters are waking up to is that the real growth area is in the reluctant moviegoer. The good news for you is that being an inconsistent movie patron actually comes with perks — and it’s about to get perkier still.
“There’s been years where the airlines have made more money selling points than tickets, because of the ancillary revenue,” explains Andreaikis, who was recently hired as a consultant at AMC, the nation’s largest theater chain. For infrequent moviegoers, Andreaikis says new and varied carrots will soon be dangled. “If you can find a way to get them things they want, like, say, frequent flyer miles, you might be able to get someone who’s on the fence between going to a bar and going to a movie.”
Yes, whether or not you see a movie at all is clearly a big deal to movie theaters. But as important is when you see a movie. “On opening night, the split of the ticket revenue is in favor of the studio,” explains Andreakis. “Three weeks later, that formula is inverted. The staler the movie becomes, the more theaters get of the ticket price. We want to see some economic mechanism put in place like, ‘Buy one get one free,’ but not valid for opening night. The cinema industry should be all about velocity: If I can get you from just two to three movies a year, that’s huge.”
Distributors counter that box-office revenue-sharing models are evolving, and increasingly, the split is pre-negotiated throughout the run of a picture, but allow that Andreakis still has a point: If movie tickets can be commoditized, like toilet paper at Costco, people might be inclined to purchase a whole bunch, months in advance. After all, just like rolls of toilet paper, you’re going to be using ‘em at some point in the future.
In February, Nicolas Gonda co-founded Tugg
, a new venture that bills itself as “a collective action web-platform,” but is really just a simple way to see the movies you want at your local movie theater with a bunch of fellow fans.
Basically, Tugg is Groupon meets the Long Tail, at your local multiplex: You want to see Dr. Strangelove on the big screen with a bunch of like-minded souls? No problem. Tugg has deals with most of the nation’s largest chains (like AMC, Regal and Cinemark, to name a few) and, increasingly, with many of the studios. Just get the theater’s minimum number of butts into seats, and you’re screening is a “go.”
“It’s leveraging behaviors that have been taking place online for quite some time,” says Gonda. “Within the Facebook ecosystem, everything that was once an obscure interest isn’t [anymore]. People can identify with others who share their likes — sometimes in the thousands or hundreds of thousands.”
Since launching in February, hundreds of screenings have occurred in over 30 cities, eliminating empty seats in underutilized time slots. “For the content owners, this isn’t speculating,” says Gonda. “This is those people saying, ‘We want to see this.’ So, for studios, it’s pretty much a no-brainer.”
Gonda declined to confirm it, but an insider at the Weinstein Company says that it has just signed a contract with Tugg, joining studios like IFC Films and Sony Pictures Classics. More and larger studios are likely to join up, since the downside is almost nil, as recent first-run features have shown.
The 2011 documentary Incendiary has so far doubled its market reach beyond its traditional theatrical release in a half dozen markets, doing repeat business in cities like Seattle where it had never even opened. Just a few weeks ago, One Day on Earth, a just-for–Earth Day film
that screened solely through Tugg in the U.S., generated almost 2,000 ticket sales at eleven screenings across the country.
But the idea of Tugg holds water even if you’re not documentary fanatic or tree-hugging granola cruncher — you can just be a godless hedonist who wants to see 9 1/2 Weeks in a theater again. And we weren’t kidding about Dr. Strangelove, either: Last month a Minnesota screening of the film attracted hundreds and sold out its theater.
He says the last business precept to penetrate the movie business — customer engagement — has been long coming, but is coming soon: “Why don’t you try and get me to go online and buy the action figure for the movie I am about to see right now, or this amazing score to The Hunger Games right here, while I’m in my seat? Because what we’re finding is that the Millennial generation is willing to give their personal information to marketers — provided that they feel like they’re getting something worthwhile in return.”
Direct-response deals used to be the provenance of the Ronco Showtime Rotisserie Oven, but with the proliferation of smartphones, the ability to get a better deal on a product being advertised before the movie may soon gain traction.
And for those who don’t want to fork over their personal data?
“When loyalty programs are in play, [many people] don’t want to have their data sold,” says Andreakis. “So why don’t I give [just] away my new Coke beverage, or Mars bars, so you can start to like my product right now, in the theater.”
Andreakis notes that one of North America’s largest theater chains has been quietly experimenting with it in Canadian markets. As such, in-theater child-care centers may be coming to a theater near you. And before you balk at leaving Junior with some pizza-faced hoodlum at the local multiplex, ask yourself: Is my current babysitter Red Cross certified, drug-tested, and background checked? Exactly. So sit back, drop those rugrats off, and enjoy watching Safe in all its knuckle-dragging, gun-blasting glory.