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?
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
22000 popcorn profits > 5100 popcorn profits..
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.
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.
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.
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.
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!
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.
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.
Plus, seeing the Netflix logo on the big screen would boost their brand imo and double as an advertisement.
But now I'm paying $15 just to get into the damn building, let alone anything else. Where the hell did dollar theaters go?
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?