Hollywood is in Trouble!
Filed under: Lionsgate Films, Exhibition, Newsstand, Home Entertainment
It isn't a secret that DVD sales keep Hollywood profitable these days, and it isn't big news that DVD sales are reaching a plateau and potentially will begin a decline in the next few years. So, Hollywood is in trouble! According to a NY Times article, the home entertainment divisions of all the major studios appear to be nervously seeking out a new way to get money out of consumers. With the industry divided over hi-def formats, download sites not yet showing returns, Netflix gaining ground, and video-on-demand cable services providing more selection, there isn't much time before home video sales drastically fall. Even Steve Beeks at Lionsgate admits companies have depended for too long on the "shameless" act of re-releasing titles in new packaging "as long as people would buy them."
I've got a good idea for a new cash cow for Hollywood: Movie theatres. Instead of ignoring the downfall of moviegoing, why not invest in the experience again? Stop taking advantage of the theatres that work so hard to aid your business and instead help them get back in the game. It might be more difficult than sitting around and waiting for consumers to accept new technologies, but it might just be a better solution in the long term. I mean, what does Hollywood have against the cinemas anyway?










Reader Comments (Page 1 of 1)
6-14-2006 @ 11:52PM
DavidG said...
Hollywood (Studios) have. Right now they are making a multi-million dollar investment that will upgrade theaters to digital cinema. This improves profits and allows more flexability in schedules in addition to providing advanced technology for things like 3-d.
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6-15-2006 @ 12:22AM
Beeslo said...
Thank you, Chris! I have been preaching this to all and finally someone else sees the truth for what it is. What can we blame for last summer's and possibly this summer's low blockbuster return? Bad movies? Yeah, the movies must suck. No wait, there were some good movies last summer. Perhaps its the fact that my home theater is freakin' awesome to watch my DVD's on...of course, if I have a 300x200 size screen, perhaps. No, when it comes right down to it, Hollywood has been forsaking movie theaters and relying on the DVD sales. If a movie bombs at the box office, it could still make more money on DVD's...Alien vs. Predator anyone? And because of this, hollywood has no problem setting ridiculous prices for theaters to pay to show their films. I used to work in the movie theater biz and everyone's question was always two things. Why are tickets so expensive and why does a bucket of popcorn and a coke cost me $10? Well there is one answer for both these questions: Don't blame the theater, blame the distributors. Not only do the distributors ask ridicilous amounts of money for theaters to show their films but they also expect a large percentage of ticket sales. Meaning that $8 ticket to see Superman, only about a $1 goes to the theater. And so logically, if they aren't making money in ticket sales, they have to raise concession prices to break even.
So yeah, Hollywood is turning its back on theaters. Is all lost? No. In fact I live in Austin, TX, where I am privy to the #1 best movie theater (voted by Entertainment Weekly and even you Cinematical folk) in the country, the Alamo Drafthouse. While there are only 8 in existence through Texas, it is indeed something Hollywood should invest its money in. No one cares about digital projections except for the hardcore afficiandos. Real people want to have a good time watching a movie and the Alamo Draftouse has got it going.
Thank you...that has been eating me up forever. Thank you for saying the freakin' truth.
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6-15-2006 @ 12:45AM
Neil said...
The problem, I think, with many theaters is a result of the massive multiplex constructions that took place in the late 80s and 90s that eventually caused many national theater chains to go bankrupt by the turn of the millennium.
Specialized movie theaters, like Mark Cuban's Landmark Theaters, are going to be what draws viewers to the movies.
But the burden of creating a unique viewing experience for moviegoers in movie theaters is still on theater chains... more so than distributors or even Hollywood.
I predict that with the Internet's ability to distribute films and ultimately many viewer's ability to watch downloaded films on their Media Center computers that Hollywood will suffer the most. Essentially, Hollywood's cash cow for the past 20 years has been its ability to control distribution of most commercially released films - with the Internet's potential, this control may soon be distributed among many... (well, at least I hope so)
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6-15-2006 @ 1:13AM
Gary Bourgeault (bizofshowbiz.com) said...
Shari Redstone, the daughter of Sumner Redstone and president of National Amusements knows that Hollywood has left her on her own. Here are a couple of things she's done for her theaters:
She is offering cocktails, waiter service, and high-quality food. In other words she has made her theaters a "destination" and more of a high-end service for a different demographic.
Along with that, she's doing what we've been talking about for awhile here - showing baseball games and recreating the peanut sellers by hiring kids to hawk peanuts in the theater. She is also renting the theaters out to Fortune 500 companies and churches for services.
When you consider that young people don't care how video or movies is consumed, and Hollywood has pretty much abandoned the theater owners, things like Shari is doing, where there are other things being offered besides movies, will be the thing that will keep owners in business.
Those that don't see what's happening and rely on the next "blockbuster" to save them, are really going to have a hard time surviving in the short years ahead.
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6-15-2006 @ 5:27AM
90014 said...
While I love the cinema experience, I will not buy a ticket for a movie I know will come out on DVD in the 'extended' or 'directors' cut. With so many DVDs released as 'uncut' the film in the theaters simply becomes an advertisement for the future DVD release.
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6-15-2006 @ 9:24AM
DaveH said...
Uncut dvd's are a scam to sucker you into thinking you are getting 'something more'. Pure brilliant marketting.
Nothing beats the drive in.
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6-15-2006 @ 10:48AM
Phil Gray said...
Going to a theatre to see a film nowdays is more a test of indurance than a "movie going experience". Outside of the occasional IMAX 3D or documentary film I haven't been inside a theatre in three years and no one is giving me any reason to change that. They are however giving many reason not to change that.
Lets see:
Outrageous cost of tickets and food
A minimum of 15 minutes of commercials (projected poorly by the way) prior to the start of a film.
An audience that thinks part of the experience is talking to the screen or talking to their friends or talking on the phone - along with theatre operators who act offended if someone complains.
An auditorium that is usually no more than a box painted a dark color.
House lights that stay partially on during the film presentation.
I am sick of theatre chains bemoaning how the film industry is killing their business with costs and they are forced to pass this treatment on to their customers in the form of high prices and a degraded film experience to the fewer and fewer people who attend them. You know what - they need to take their gripes to the studios instead of punishing the audience.
So now I wait for the DVD with absolutely no guilt about not seeing the film in a theatre and that will not change until theatre owners give me an experience I can't get at home instead of treating me like one of the cattle at the local slaughter house. As far as I am concerned they brought it on themselves.
And the filmmakers like James Cameron and Steven Speilberg who stand up and have the audacity to tell people films were meant for theatres and not living rooms are as much to blame as the theatre owners. I guess if my access to a theatre experience was limited to premiere night at a grand old movie palace or a plush screening room as I am sure theirs is i might be saying the same. I defy any of them to get in line at the local cineplex like the common folk and then try to pass that rhetoric off.
Phil Gray
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6-15-2006 @ 2:21PM
josh said...
"No one cares about digital projections except for the hardcore afficiandos"
You are missing the point. The true power of digital projection has nothing to do with the image quality (as long as it's good enough to do the job). It's the fact that this lets theaters use digital DISTRIBUTION.
The real power behind digital is that a theater can then show 6 different movies on that screen in a day if they want, without having to have someone breakdown and reassemble any prints, or do any work at all... They just play a different file on that projector.
It will allow theaters to be MUCH more flexible with what they show. Eventually, hopefully, theaters can even easily show pristine transfers of any and all older films, which will generate money and ticket sales. It's easy to imagine a situation where your locale 20 plex has all the big current films on the big screens at night, but also has matinee showings of the Godfather and Network and Raiders of the Lost Ark during the day.
Imagine if your local theater showed 2 different films from the AFI's top 100 list every weekend, with nice pristine projection. Would that tempt you to go check some of them out? It would me. But right now it's just too expensive and difficult for a theater to track down 2 good quality prints of older films just to project them once or twice. But digital distibution can (and hopefully will) change that.
Not to mention the ability to show short-run or one time documentary and other programming (sports, concerts) much easier/with better quality...
This kind of programming flexibility will go a long way to make theaters more profitable and more of an enjoyable destination. If they can get on the ball with it, that will save the theaters.
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6-15-2006 @ 4:04PM
Beeslo said...
Well to comment on the last comment. The very fact remains, still...no one will be drawn to the idea of digital projection. You are right, it does make a theater's schedule more flexible but the normal movie patron doesn't even know how a normal film reel works. Couldn't tell you how often, when I worked at a theater, patrons would ask me to rewind the film when part of the movie messed up. I would always give the same answer, "you can't rewind reels." So yes, while digital projections will make things easier, its not what will bring pristige back to the theater business.
You also suggest that with digital projectors, theaters can show classics. Yes this it true, but at the same time, not only is this a decision made by the theater regardless of what type of projection they have (while this could entice some to come to theaters, it only rests on the decision of the theater, and even some who do possess digital projectors, they fail to do even this), but also just merely showing classic films is not exactly something that will drive patrons to the movies. A local movie theater around here in Austin, TX does just that all summer and it only attracts the expected crowds, film afficiandos.
Now another theater chain that has been growing outside of Austin is the Alamo Drafthouse. Tim league, the owner, realizes that people do not go to movies for the movie itself (new or old, film or digital). They go to movies for the enjoyment of it. He offers food and alcohol at reasonable prices, special screenings and events, rolling roadshows (where they erect a portable screen and show movies in other locations such as Jaws at a lake while you sit in the lake watching the movie...that one was fun) and improv movie events like Mr. Sinus which is a live version of Mystery Science Theater 3K.
This is where theaters need to go. Yes, the Alamo has both digital and reel projectors but this is only to make what they can do easier. It is a step, but the right move is to make the experience itself more worthwhile.
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6-15-2006 @ 11:59PM
darkbhudda said...
Outdoor cinema is popular in Australia as well.
Digital distribution has been around for a while, but getting it as a defacto standard would benefit certain filmgoers. One of the costs of running cult/obscure/classic movies is actually getting hold of the prints. Film festivals have to cancel movies because the prints don't arrive from other film festivals and there are arguments over who pays the postage/courier fees the sender or the recipient. Digital distribution eliminates most of these problems. It adds some more though.
Smaller, film groups can use DVDs because they use smaller screens. Cinemas can rarely get away with that.
When I was going to Uni there was a cult cinema that ended up closing as most films had very few patrons.
There was one monthly session that was packed out. Star Trek: The Original Series. Bear in mind this was the early 90s before DVDs.
I've noticed a lot of the smaller and specialist cinemas, particularly Chinese and cult cinemas have closed down over the last 10 years.
Now that all said, there are start of the art cinemas, not part of a chain, that charge the same rate as it costs to rent a movie when it first comes out. The more expensive cinemas have more problems with the projection and sound systems.
However ALL screenings I have been to in the last few years have problem patrons. Either they sit behind youn in a near empty cinema and kick your seat, or talk constantly or SMS people or answer their mobiles.
I have never seen anyone thrown out for this behaviour. Even when people trek the 5 minute journey to find an usher and the ushers ask them to keep quiet, they just start up again 10 minutes later. By then no one can be bothered missing another 10 or so minutes of the movie. This behaviour is in all levels from young people to old people from mainstream movies to film festivals.
I kid you not I have had to ask the usher to tell off old people, in their 70s, for kicking my seat and talking.
I have gone from weekly cinema watching, to monthly to twice yearly. Even that is usually to a Bollywood movie since I know it won't be crowded.
I actually *dread* the thought of going to the movies.
I can never relax, if I'm lucky enough to find an unkickable seat, then I just wait for the talkers to start. If I don't find an unkickable seat, I have to wait in for the inevitable person to sit behind me, even though I'm close to the screen and off to the side where no one else ever sits unless I'm sit there. Then when someone sits behind me I wait for the inevitable kicking of the seat.
Yeah, great experience Hollywood.
Fix my dread of going to the cinemas Hollywood.
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6-17-2006 @ 11:56AM
GhostDoggy said...
How about salary caps? Sure, it may sound stupid, but it works in some industries. If none of the high-paid actors can stomach the salary cap ($1-Million/film, nothing else), then they can go looking for another job as whatever monies they have begin to dwindle.
Its also a fresh way to garner more opportunities for lesser-opportuned actors to take on better roles.
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6-17-2006 @ 9:11PM
stephen said...
For a couple of million extra, the companies can make
any previous flick into a 3-d one.If anyone saw Chicken Little using the latest technology will marvel
how real the movies can look. so, if they were to have
the theatres to be able to project in 3-d, can show
even the older ones also.Think about how cool that may be to see great,classics that way on a large screen.
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