Cinemark announces $8.99/mo. subscription to fill more seats, take on MoviePass

"The average domestic ticket price (including matinee showings) reached a near record level of $8.93 in the quarter that ended in September, according to the National Assn. of Theatre Owners"

Amusingly enough, the website still tried to pitch me the $8.99 monthly subscription for one movie in a month. Um, no thanks. :)

I think tickets are around 12 or so in AMC, and sometimes higher for 3D movies (I don't think there have been more than a handful in the recent past) or certain releases (Star Wars pre-order on Fandango is 19$ now). Those stubs are always 1:1 though.

Of course, I saw Dunkirk in IMAX 70mm projection at the Metreon in San Francisco, which is a state of the art screening room, but that will probably only ever happen every few years. Sadly the Metreon recently remodeled with completely terrible seats (only in the IMAX room), so I'm rarely tempted to go there.

More importantly, though, not very many movies were/are shot in that format. Not enough to really build a business on.

Having to juggle sodas, popcorn, napkins, etc., is always an adventure in the negative sense when I go to the movies.

Let's throw together a simplified example scenario. Imagine a user that previously went to the movies 12 times a year paying $10 per ticket. In a world without MoviePass the theater collects $120 from that customer. However with MoviePass that user might now go 15 times a year and the theater collects $150 total from MoviePass. That is an added $30 in revenue for the theater that was created by MoviePass. The theater still comes out ahead of any revenue sharing model with MoviePass that costs them less than $30 per year. Perhaps more importantly they also reduce the risk that the customer's $120-$150 per year ends up going to a different theater across town that is willing to make an agreement with MoviePass.

No, because consumers aren't rational value maximizers even if businesses might sometimes approximate that; consumer behavior is strongly shaped by path-dependent expectation setting, and once theaters have let MoviePass model become dominant enough to set pricing expectations, they will catastrophically lose business if that model collapses. Eventually, if they survive, he public might be drawn back, so the industry might survive in some form, but each individual firm in the industry faced serious risk of being wiped out by that.

It's much better for them to not encourage MoviePass to consumers and do everything practical to distrsct from it while finding other ways to attract price-conscious customers in a more sustainable way.

But it does matter. Because there's always the potential for the theater to go from barely getting any ticket revenue to actively losing money for every ticket sold. Concession sales then start subsidizing box office revenue to pay distributors, eating away at your one profit center.

Take two scenarios for how distributors, the ones that take most of the ticket revenue, make money:

Scenario A, the status quo: 1000 tickets a day x $10/each x 95% of ticket revenue = $9,500/day going to the distributor

Scenario B, assuming MP is a raging success, has captured the majority of the movie-going market, and is able to muscle the theater to give it a 50% discount on ticket rates: (200 non-MP tickets x $10/each + 800 tickets x $5/each) * 95% of ticket revenue = $5,700/day in revenue going to the distributor

Even though the distributor still keeps the majority of box office revenue by percentage, that's a substantial discount to what they're used to and they're not going to just let the theater pass that loss off to them completely. So now, instead of just 95% of box office sales, they want 95% with a minimum guarantee, or want concession added into the percentage distribution, which could work out to paying substantially out of concession profit if your ticket sales don't hit that minimum (basically moving the risk back onto the theater, which is exactly what theaters so enthusiastically tried to avoid by moving from fixed-fee distribution to percentage-based distribution).

While MP would also theoretically increase foot traffic to the theater, and thereby making up the loss in revenue per ticket by a higher quantity of lower revenue tickets being sold, there's only so much unused capacity during peak time already that there's a physical limit to how much additional volume an existing theater can absorb. If MP increased viewership during off-peak times when the theater's are mostly empty (like midday, midweek showings), then it might be beneficial to both the distributor and theater owner. But otherwise, one of those parties tends to come out of it worse than before MP.

Sure VoD, streaming, and DVD/BR allows piracy, but it also creates many more sales.

People are already paying $10-15 per person to see a movie in the theater. I'm sure some consultant concluded the new sales from pre-release home rentals won't cancel out lost ticket sales and piracy.

They also have to worry about theaters, which are a key part of their busines model but aren't under studio control. If 50% of customers stop going to the movies because they rent at home, that might make theater unviable or make the theatres demand larger cuts of profits.

And I also imagine they are worried about brand dilution. Movies and TV have never been more similar. TV might even have better overall quality now. But movies can charge 12 bucks for 2 hours and TV is having a hard time charging 12 bucks for unlimited everything.

If Avengers 4 is available on your local TV, is it still a movie? Will people still want to pay 50 bucks to stream it? Or are they going to want to pay 3.99?