Friday, January 8, 2010

Inside The Movie Theater Biz

The typical movie theater will make nearly half its annual revenue in May, June, and July, with another big chunk of income around the Thanksgiving-Christmas-New Year period. The period we’re in right now is traditionally the deadest time of the year for theaters and movie-goers.

But things are changing. says the major studios are now beginning to spread their best movies throughout the year. Columbia Pictures took a risk last year releasing “Mall Cop” in late January, and it got big box office.

Theater-owners love a movie like Avatar, because it has staying power. Most folks don’t realize that theaters pay the biggest percentages of their ticket revenue - up to 70% - in the first week of a movie’s run, but it drops down to half of that or less after the first week. James Cameron’s Titanic - the last film he did before Avatar - was a bonanza for theater owners, because it stayed popular for months.

Avatar may not have the staying power of Titanic, but it’s got something else going for it: lots of folks are paying the extra bucks to see it in 3-D or IMAX. Last week it passed the billion-dollar mark. More and more, young folks are shelling out the bucks to see the movies with bells and whistles. J.J.Abrams’ remake of Star Trek last year set the trend: IMAX made up only 2% of the screens it was shown on, but accounted for 12% of the box-office take.

Speaking of box-office take, movie theaters have more than held their own during this recession. The last “down” year was 2005, and since then there’s been slow but steady growth in revenue. The number of tickets sold has been close to 1.4 billion since 2005, but the average ticket price has gone up from $6.41 to $7.46. And that includes everything from the cheap seats for “older” movies at the strip mall, to the 20-dollar extravaganza seats for the IMAX or 3-D movies.

No scoop here: the concessions stand is a license to print money. Six and a half bucks for a tub of popcorn? Four bucks for a big soft drink? Last year the average movie-goer spent just over three bucks on concessions, so I know I’m doing my part to keep the average up. Just over 400 theaters in the U.S. serve alcohol, but the number is slowly increasing.

What about two of the biggest complaints from movie-goers: the long “pre-game” show of trailers and ads, and the annoying kid with the cell phone a few seats away? On the latter, theater owners admit they don’t push too hard on the “turn your cell phone off” rule, because so many of their customers are young people who can’t live without texting or talking during the movie. And one survey showed two-thirds of movie-goers don’t really mind the trailers and ads.

However, 34-hundred customers of Regal Cinemas, a huge national chain which owns a lot of the movie screens in the Fox Valley, signed an online petition asking the company to do away with all the pre-show ads and trailers. And Kerasotes, the large chain that owns Star Cinema in Fitchburg, says it’s a balancing act on the cell phone thing. They try to keep baby-boomers, who hate the interruptions, happy - while still not cracking down too hard on their younger customers.

The future: movies shipped to theaters on computer hard-drives or digitally downloaded from a satellite link. No more bulky cans of film prints. Digital movies can be cued up and run with the click of a mouse, and shipping costs are reduced drastically.

See ya at the movies!

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