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It doesn't help that virtually the only way for theaters to make money is to sell that food. They make virtually nothing on the tickets themselves - almost all of the ticket money goes back to the studios for the first few weeks.

How do you keep a theater running as a business when you need to have huge floorplans, when you need to make money some way other than via ticket sales?

I'm not an expert in film finances, but this is my sense too. If studios want people to see their movies in theaters, they need to take responsibility for keeping theaters alive and affordable by sharing more of the ticket sale profit.

I think Netflix should look into releasing some of their stuff to the Cinema while not taking advantage of them like that.

It would be better for them to continue to let theaters die off, than breathe life into their competition.

This is ridiculous the more you watch movies the more you want to watch more and in different setup. Here in France pirating is known to have brought back people to theaters (mainly because theaters stroke back with $20 monthly subscription for unlimited entry).

Netflix is an even better vector than piracy because people actually pay royalties to Hollywood to watch movies at home. How can they be so blind?

I’m pretty sure that if they could come up with a combined subscription Netflix+Theaters for around $30 sales would skyrocket. Actually I think it’s what will happen anyway, depending on how it turn out it will be a cross deal or Netflix will just start to buyback theaters at some point.

> Netflix will just start to buyback theaters at some point.

I like this idea a lot. Netflix subscribers can pay a fixed premium ($4?) per showing of new/exclusive films that are held off of Netflix for a week or two.

One could buy a "Comedy" pass for a specific theater hall that will only air comedies back-to-back with schedules published in advance. Given pure digital distribution, Netflix could even set up a local CDN and refresh content every day if they wanted to.

Lots of possibilities!

take my money!

Or old movie could be rescheduled on theater based on local wishlist of nearby Netflix subscribers. Could be a way to reintroduce a form of midnight movie formula: "Alert: This item on your wishlist will play in theater near you on Wednesday night at midgnight! click here to book your seat !"

They're already considering buying theaters. Last week it was reported that they're looking at multiple chains including Landmark (http://www.latimes.com/business/hollywood/la-fi-ct-landmark-...).

It is implausible that Netflix, or piracy, brings people to theaters. If so, given that there is massively more piracy, and streaming, than there was 30 years ago, you’d expect an increase in theater attendance, not a massive decrease. Pretty clear that streaming and piracy are substitute goods for theater attendance.

If theater attendance disappeared, it would help Netflix as those ex theater goers sought replacement content. Therefore, it makes little sense for Netflix to try and save theaters. Also, saving theaters send money to competitors like Disney who are going to be competitive in the streaming space in the future.

if Netflix would give them better deal, I'm pretty sure cinemas would play nice to Netflix.

I'd be sad to see cinemas dying. It's possible that VR might offer an alternative but cinemas are one of the social thing we can do nowadays.

I don't think that cinemas are much more competition to Netflix than books or bars would be. Maybe for some, but for me it's definitely not "I want to get entertained by moving pictures, Netflix or cinema?". If I want to relax on the couch, Netflix competes with books, videogames, linear TV and, of course, other streaming services (and with scrolling social media feeds). If I want to go out for entertainment, cinemas compete with bars, actual theatres, all kinds of music venues. They only ever register in the same decision as part of the aggregates facing off in the general couch or out decision.

I think it would be awesome for Netflix to release some movies in theater first and then release on Netflix 2 weeks later while its "still in theaters".

Plus, seeing the Netflix logo on the big screen would boost their brand imo and double as an advertisement.

Looks like they are considering this: https://www.esquire.com/entertainment/a19884619/netflix-movi...

Well they're definitely profiting off of popcorn. The customer pays around 1200% markup of the cost of making it.

Sure, customers pay a huge markup. But even with such a huge markup, it's only around $4-5 per bucket sold. And in my exceptionally limited experience, only around one in five moviegoers buys popcorn.

My issue with theater popcorn isn’t the price, it’s the fact that it tastes like stale styrofoam covered in “buttery” oil, at least in America.

So as to force you to buy a soda to wash it down.

This is why the theaters are transitioning into more of an Alamo Drafthouse style setup with a kitchen and alcohol. While the theaters have to be reconfigured and actually lose seat count, the type of customer drawn in by food, booze, and reserved larger reclining seats will net more per showing than a cramped theater full of buckets of popcorn.

Source: I know a manager at a theater chain whose location underwent the conversion -- his store's profits went up. But the location at the mall stuck with the higher seat density because it had more foot traffic and removing seats would decrease profits

Or, like, they could lower prices and move more volume.

22000 popcorn profits > 5100 popcorn profits..

Surely they've worked out (with far more information than we have) what they think is the optimum price on the supply-demand curve to maximize profits.

You're likely correct, they probably did some a/b-like testing to see how high they could raise concession prices before profits from concessions began to drop.

What I think they failed to look at was the long-term effects overpriced concessions had on the ticket sales. Concession prices have absolutely contributed to the long-term decline in ticket sales. I know lots of people that stopped going to movies because they knew their kids/SO would want that $15 drink and popcorn.

I only started going back when a theater that offered real food opened up. I won't pay $10 for a bucket of popcorn, but I'll definitely spend $15 on a decent burger.

Sales don't work like that.

If there are N people who would still buy at BIG_PRICE and M people who would buy if it's LESSER_PRICE and below, even if M > N, you would still be losing money if NBIG_PRICE < MLESSER_PRICE.

There's a demand curve, and if you lower below it you don't get more profit, you just sell to more people -- search for product elasticity curves, maximum willingness to pay, etc., for more info.

Vendors, and vendors like cinemas even more so, have experimented to find the price that maximizes those curves.

Markup related to cost of popcorn is irrelevant.

It's revenue related to cost of keeping the theater running that matter.

Even if they sold $1 popcorn for $10, it wouldn't matter much if they needed $20 per head to pay for the theaters fixed and running costs.

If all the money is going to the studios anyways, why are theaters charging so much for tickets? They should naturally be charging just enough to satisfy studios, and high prices on food/drink.

But now I'm paying $15 just to get into the damn building, let alone anything else. Where the hell did dollar theaters go?

>If all the money is going to the studios anyways, why are theaters charging so much for tickets? They should naturally be charging just enough to satisfy studios, and high prices on food/drink.

And who said they don't do exactly that?

In other words, that the prices asked for the tickets aren't just barely above what the studios demand and get?

I don’t know about you, but nearly all theatres I go to have evolved over the years to have reserved seating and full bars with alcohol. Theatres do need to double down on the artistic experience, becoming more like art galleries and less like a place for people to enjoy a big screen.

Maybe introduce micro theatre rooms with superb audio and visual clarity and niche movies too, for a smaller audience.

This is true if you live in a major metropolis but the small-town theaters have started simply dying away.

I’ve only seen the alcohol thing in the US

It's a thing in a handful of upscale locations in Brazil as well

There are theaters in Canada that have it, too.

Wow, that is surprising considering how restricted alcohol is in Canada. Interesting.

All of the Toho cinemas I've been to in Tokyo served alcohol.

Sounds like the regal here. Hey have leather recliner rooms with only four rows of seats, maybe 60 people total. It’s insane how much more immersive the smaller rooms are.

Yeah, but the alcohol thing isn't all sunshine and roses. The last time we went to the theater a woman kept having to get up and walk in front of us on her wait out of the theater (presumably to the bathroom). On one of her ways back in she stumbled (she was clearly inebriated) and spilled beer all over my wife. She slurred an apology and stumbled back to her seat. We haven't been back since.

That's not really an alcohol issue, it's an anti-social behaviour issue. And movie theatres (and their customers) have had to deal with that for a long time.

Netflix is not replacing Christopher Nolan's films anytime soon. This isn't a battle for the blockbusters, it's a battle for the little and medium sized films. The bigger movies will have a place in cinemas for a long time because they have wide appeal. For smaller, niche, films that have a potential audience of 2 million people that are spread across the world, there is no way to make good content for them and deliver it to theaters. It makes absolutely zero sense economically. Netflix can make that same movie and recommend it to the 2 million people that they know will like it. Movie theaters that show movies to hundreds of people at a time can't ever compete with that. Medium sized movies are the true battleground right now, which is and the Academy is trying to put a stake in the ground to help the movie theaters. It is not going to work because the economics are not as compelling, and they will only get less compelling over time.

This move will mean that comic book movies will rule the Oscars one day. At least until the Academy realizes they are just being a bunch of old fogies.

You would think that in the age of digital cinema niche films would have a boost. If you are creating a film for distribution, creating a dcp for cinema is trivial. The dcp can be shipped to cinemas on a physical copy, via satellite or over the internet and be delivered straight into the cinemas system.

For the cinema owner there’s literally zero effort involved to schedule a few shows of a niche film. For the bigger chains most of it is automated anyway. All you have to do is schedule the shows in your point of sale system and the backend systems does the rest like building the playlist transferring content to the correct auditoriums and so on.

Zero effort, but also next to zero reason. You are assuming that people will seek out these films and go out of their way to see them at odd times. The cinema is missing out on the money it would make showing a blockbuster. There is a reason why the big movies show on a ton of screens at once, they bring in more people than all the other movies combined on big weekends.

We take it for granted now, but it wasn't that long ago that theaters deliberately degraded the experience by deciding to show advertising prior to a film. Movie trailers are one thing, but when I see the same ads that I see on TV, I think I'm better off staying home.

I remember I was all up in arms about it when it first happened (showing advertisements before the movie). It makes sense though, you are a totally captive audience and those opportunities are more and more rare for companies trying to advertise. I guess I got used to it and now I just kind of space out when the ads are playing, or talk to my companion.

I still really enjoy the movie going experience; it's a bit more special now that I have kids and I don't get to see grownup movies in the theater all that often.

With reserved seating this isn't an issue.

There are a few theaters in my city that have started offering a "VIP experience" which I think is well worth the few extra dollars they charge. The seats are much larger and more comfortable, and assigned when you purchase your ticket. There is a small table where you can put the food and drinks that the staff bring to your chair, and because they serve alcoholic drinks the entire theater is restricted to ages 19+.

It is a night and day difference compared to the usual theater experience.

all of the theaters in chicago near me basically only offer VIP experiences; Decent prices only exist at university-run theaters, or 30min/1hr drive out of the city.

I'm a student, and now I'm essentially banned from watching any recently released movie except as a significant luxury. And I liked watching movies; I've been gentrified right out of the theater.

And probably in the future, 10 years from now, with large disposable income, having lost all habit in watching in theaters, and the prices knocked up another $10 per movie, I'm still not going to watch movies in theaters.

The market is trying as hard as it can to make sure I find a suitable alternative before then; I don't know what my kind did, but clearly the theaters are fed up with it

I'm in the other camp that prefers watching at home. My tv screen is higher image quality resolution and contrast than most theatre screens. My speakers aren't as loud but they also aren't as aggressive. I don't enjoy hearing people chat during the movie. I don't like sitting in sticky seats.

I do agree with your point on Nolan and his are the few times I will get the IMAX 70mm ticket and see his movie on a screen that is 10 stories tall or whatever.

You've described a lot of the reasons I loath going to the theatre. The sounds are overwhelmingly, painfully, intolerably loud- the screen is large enough to cause motion sickness unless you can manage to get a seat near the very back of the theatre, the entire experience has migrated toward such an extreme that many people I know have just given up on even trying.

I suppose it makes a kind of sense- if sales are flailing and more people are skipping the theaters, then doubling down on your differentiator in order to try to attract more dollars from your base makes a kind of sense- but I get the impression that over the last couple of years they've hit an inflection point where they've just put too many people off the experience.

>>Netflix didn't kill theaters

You left out rude patrons using mobile phones during a show and cheap large flat screen tvs as causes for its decline

Your points in terms of the art are sound. But... it's much bigger than that. You must consider how the movie industry actually works. How it makes money.

There is no way to produce a reliably successful film. None. There's not even any way to improve your chances. For every film filled with star-studded actors that is a success, there is one which is a failure. For every big-budget blockbuster, there is a big-budget flop. For every formulaic success, there is a formulaic failure. On the balance, and it has been extensively and exhaustively studied, it's random. The public audiences response to a film is truly, 100%, random. Only very recently have some strides been made in predicting the future success of a film before opening - and that only based upon tweets in the 48 hours prior to its opening. Quite a bit shy of the years of notice necessary to actually inform funding decisions of projects.

You can't survive in a space where the return on investment is random. Unless... you can rig the game. If you can control what films the public has access to at any given time, and you make sure to yank poor performers out of the theater after their first weekend, while keeping the successes around for far longer... then you can get an edge. You can make a profit. Without that ability to control and manipulate distribution, and restrict availability, they would be left with the randomness again. And they would quickly falter in the face of that.

The book 'A Drunkard's Walk' includes a whole chapter on the public's response to media, the research which proves it is purely random (down to the audience never being the same group of people twice among other factors), and the way the big businesses in those industries deal with that fact. Without those tactics, which online distribution completely robs them of, it really is an existential threat. Of course, Netflix is showing us that we don't need them at all and there are entirely different ways to handle the problem.

When you consider alternative outings for a family of four, $50 isn't so terribly bad. Where else do you get two to two-and-a-half hours of entertainment for four people including food? If you're having a hard time getting good seats and getting garbage food for your money, that's a sign that you need to scope out some better theaters. In my area, we have theaters with pretty posh, reserved seating, near-gourmet food (although there's still a lot of room for improvement there) and even alcohol service. If no theaters like this exist in your area — business opportunity!

There are theaters and theater chains that aren't functioning competitively, and there are those that are actively exploring new ways to get asses into seats. From what I can tell, those ideas seem to be working.

The fifty dollars doesn't include food. A family can enjoy dozens of hours of entertainment from video games like Wii sports etc.

I'm not sure where you get food and movie for a family of four at $50. Just tickets, drinks, and one snack for my wife and I is almost $40.

But to answer your rhetorical question, it isnt hard to get a few hours of entertainment and food for less than $50. It's hard to get PASSIVE entertainment that everyone agrees upon at the same time at that price. Junk food is super cheap, but substantive food isn't. (If you want variety - I'm not counting getting large bags of beans and rice since we are talking luxury not subsistence )

The $50(+) number came from the post I commented on:

> by and large, a $50+ excursion for a family of 4...

As for the difficulty in entertaining a family on a budget, it's generally true that as soon as you step outside the door to your home, entertainment costs will skyrocket. Public parks, publicly-funded museums, community-led events and national parks/wilderness activities will get you there — and with a bit of savvy these can be your go-to opportunities — but minigolfing, theme parks and kid-focused venues (thinking along the lines of Chuck-E-Cheese) will usually come in at a higher cost.

In comparison to a lot of commercial entertainment, movie theaters range from either being fairly competitive to very competitive, in my opinion. When theaters fail to meet that bar, that to me is a sign that they're being poorly-operated, but I don't see that as a industry-wide failure.

Local theme parks and pools will generally have lower costs per hour than movies. ~25$ per hour is still quite expensive.

Six flags for example is $25 or less per person to get in + food etc, but you also spend a lot more than 2 hours there.

Snowboarding / sky trips can also be fairly reasonable per hour if you own equipment and bring food.

Nothing prevents you from having a large screen and powerful speakers at home!

I just finished configuring a full 5.2.4 Atmos setup at home (Klipsch Reference Premiere + Onkyo) along with a TV much larger than should go in that room.

I no longer want to go to the movie theaters :)

What was the total cost for your setup?

Quite a lot actually! I paid a bit under 10 grands Canadian, but the total value is much higher (got everything on sale.)

But when considering I use it every day (netflix, spotify, 4 game consoles, 2 computers) it still costs much less than going to the theaters every other day for 2 years yet the experience is better; always got the best seat, no crowds, no commute, high-end quality :)

The way I think about it is in the long term. I'd rather have high-end stuff thats a one-cost expense I'm going to use for decades, than cheap stuff I constantly replace or upgrade. In the end I pay less and enjoy myself more on the way. I also set money aside when planning such purchases instead of using credit, while looking for sales in the meantime.

When I'm finally able to buy a house (in the bay area or elsewhere) this is my todo number 1.

>I still quite like going to a theater, the experience is much different than watching a movie at home. In a theater I am much more focused on the film being shown, the screen is large and crisp, the speakers overwhelm – it's much more a celebration of the artwork than almost any typical home environment.

For me the main attraction of the cinema is the shared experience. There's something in that that goes beyond personally watching the movie (some of cinema's biggest directors and critics, at least the ones in Europe, have alluded to that).

Not merely watching a movie in a big screen.

A cinema all to myself would feel pointless.

In the place I live there is a lot of small theaters around. Like 30-40 persons only. It is a nice idea. The big cinema is a nice idea too. It has nothing to do with Netflix though. In my opinion, it just happened that old hollywood still have control of most of the theater business.

If people are interested in going to theater, I'll guess it is just a matter of time before netflix deploys its own theaters.

> Imagine if we all replaced fine art galleries with mobile phone apps

Somewhat off topic, but arguably, the apps being developed and provided for archives and museums are providing a better viewing experience for the arts. The ability to essentially "touch" the works can make the interaction better than actually visiting a museum.

I have an enormous TV, stereo system, luxurious couch, and a popcorn machine. It is rare that a film in the theater outperforms my home experience. Even the very nice Angelika theater is nice by dint of replicating my home couch experience.

Kids with cell phones and hands-off parenting killed theaters for me...

> gouging on food

We bring everything but popcorn in my girlfriend's purse (assuming we want any). The prices are absolutely insane. It makes baseball game food look like a bargain.

> struggle to find seats

I don't remember the last time I went to the cinema and the room was more than 10% full

Why can't you have VR with good headphones at home? It has the technical capabilities to blow away the theater experience.

VR movie-watching is interesting, but I don't know of any headphones that can produce chest-rattling bass. Maybe in tandem with a SUBPAC or something, that might be more compelling.

right now the limited resolution of the displays is a bit rough.

when we’ve got 4k per eye or so, it’ll be more of a contender.

(not having to have a gtx1080 whirring away in the same room would also help)

If they developed hardware based VR movie setups -> you could watch movies in pretty much any resolution.

Right now we are stuck with software decoders because tech is not there yet

what are you on about?

decoding the movies has nothing to do with anything.

Have you checked the Pimax goggles on Kickstarter?

i've seen them online, but have not had a chance to try them in person.