Revenge of the Feature Film? Why Movie Theater Owners Expect a Blockbuster Year

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Is this the year people start flocking back to the movies? Theater owners gathering this week at a convention in Las Vegas say yes. Absolutely! Of course! Why ask such a silly question?! But what else are they going to say? Considering that the number of movie tickets sold has been on a decade-long decline, and that in surveys most people say they rarely or never go to the movies anymore, there’s reason for skepticism.

John Fithian, president of the National Association of Theatre Owners (yep, the acronym is NATO), told exhibitors at this year’s CinemaCon that compared to 2011’s “cold streak,” the current atmosphere among in the movie business is “decidedly optimistic.” Ticket sale revenues were down 4% last year, despite—or perhaps because of—the fact that average ticket prices have been rising for years. Nonetheless, after box office revenues increased 23% in the first quarter of 2012 compared to the same period last year, theater owners anticipate a blockbuster year.

Will it happen? Even people who are paid to talk up the movies admit there are hurdles in the marketplace.

(MORE: The Top Ten Biggest Money-Losing Movies of All Time)

Christopher Dodd, former U.S. Senator from Connecticut, is now the chief executive of the Motion Picture Association of America. In his speech at CinemaCon, quoted by the Los Angeles Times, Dodd owns up to the fact that one-third of the public flat-out doesn’t go to the movies anymore. He is especially concerned that young consumers aren’t as interested in the movie theater experiences as previous generations:

“We need to make the case — both to the new, younger, ‘connected consumers’ and to others who wonder if the moviegoing experience remains something special, something to be savored and enjoyed, something so innovative and creative — that it cannot be duplicated at home, no matter how many boxes they have.”

Thus far, the formula for producing a unique, “unduplicateable” experience has been to put an emphasis on 3-D and IMAX movies—which, conveniently enough, also give theater owners a justification for charging more for tickets. This year’s CinemaCon’s schedule includes events such as “A Salute to the Top Grossing Films of 2011,” which is being shown as “a special MasterImage 3D presentation.” That shouldn’t be surprising: Studios and theaters have been pushing 3-D for years, even as reviews of the technology have been lukewarm and consumers have demonstrated a reluctance to pay extra for it.

(MORE: Why Hollywood Loves IMAX More Than 3-D)

It seems easier for moviegoers to accept the idea of paying extra for an IMAX presentation because the product is literally supersized and, unless you’re game to install a 60-foot-high screen in your basement, impossible to duplicate at home. No dorky, uncomfortable 3-D glasses to deal with either. Tickets to an IMAX showing of a film cost 30% more than regular seats, according to the Wall Street Journal, which recently reported on the expansion of films being released in IMAX format.

Figuring out ways to charge more for movie tickets has been widely recommended as a way to save the ailing movie business. But there’s another strategy that might work even better: charging less for movie tickets. Cheaper prices would mean more tickets sold, simple as that.

(MORE: 16 Easy Ways to Save on Groceries)

The idea of “variable pricing” for movies, in which a ticket might cost $10 during the first two weeks, but $5 a month or so after release, has been floated from time to time. Studios and theaters have been reluctant to cheapen their product in this manner. But the theater owner association’s Fithian tells the Associated Press that the concept is being tested:

To lure in consumers, some theater owners are experimenting with variable pricing that would allow them to sell more expensive tickets to new releases and then lower the price once the film has been out for many weeks, Fithian said.

(MORE: The Cure for the Ailing Movie Business Is To … Raise Ticket Prices?)

Such a pricing structure could make 2012 a big year for a certain breed of film. You know, the mediocre movies that aren’t worth $10 or $12 to see, but can be justified if a ticket only costs $5 or $6. Come to think of it, there are a lot of movies that fit the category.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

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