4 Ways Hollywood Can Save the Local Multiplex

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Hollywood has a problem.

Raise your hand if you watched fewer movies at the theater this year than you did in 2010. Heading toward the final few days at the box office, 2011 is shaping up to be a theatrical dud. Barring a last-minute War Horse rush, this will be the first time that the industry posts back-to-back years of declining receipts in more than two decades.

Here's another alarming statistic: 2011 will be the first year since 1995 that domestic theaters fail to ring up 1.3 billion movie tickets.

Is it the quality of the movies or the quantity of bills in consumer wallets during these economically challenging times? What if this is a more problematic -- permanent -- trend? What if the waning attention span of new generations spoiled by social networking and the popularity of home-based streaming are eating into the market?

Before the situation gets any worse, let's go over a few things that the industry can do to beef up interest in celluloid.

1. Charge less for admissions

Inflation is a part of life at the multiplex. Exhibitors inch their ticket prices higher every passing year. You have to go all the way back to 1993 -- a whopping 18 years -- to find the last time that the average ticket price actually declined over the previous year.

That's not right.

Sure, it makes sense on the surface. Minimum wages inch higher. Film production costs escalate. Inflation doesn't take a holiday. However, it doesn't make sense for actual ticket prices to increase during economic lulls.

The annual increase hasn't been much in 2011. The average price for a screening is $7.96, just ahead of last year's $7.89 ransom. However, just five years ago the average was at a more reasonable $6.55 per ticket.

The growing popularity of premium cinema is playing a part in this metric. Folks have been willing to pay a little more for IMAX (IMAX) and RealD (RLD) 3-D screenings over traditional showings. However, as attendance is off by 5% this year -- after stumbling nearly 6% in 2010 -- maybe some price breaks are in order.

Chains have been promoting earlier matinees at lower price points, but maybe an entire week or month of rollback pricing is necessary to get folks who have sworn off pricey outings to rediscover the joys of cinema on the big screen.

Instituting lower prices as movies age is another idea, though it probably wouldn't work for exhibitors that take a larger share of box office receipts later in a new release's run. However, studios may need to revisit that relationship, because something needs to give.

2. Encourage repeat viewings

Multiplex operators have spent the past few years upgrading their projection systems. The shift to digital platforms isn't just about crisper images-- movie studios save a bundle by not having to ship out pricey reels.

The other thing digital projection systems allow is easier updates.

Hollywood and exhibitors should cash in on the ability to differentiate a product as it ages. The same die-hard fans who just have to see a movie the week it comes out may also be the same ones to come back if a blooper reel is added two weeks later. It may be too ambitious to expect an alternate director's cut during the theatrical screening process, but tacking on deleted scenes or a "making of" clip at the end may encourage repeat viewings.

Yes, padding a film will make it longer, but it's not as if theaters are filling up for most movies after the first week or two. If anything, the extras can be added during the slower weekday screenings.

3. Play up the social

Nothing can sink a bad movie faster than ho-hum word of mouth. Twitter and Facebook -- and even film critic aggregator Rotten Tomatoes -- can kill a theatrical release quicker than ever these days.

Theater owners need to embrace the technology that may very well be emptying theaters. Hollywood can either embrace Web 2.0 or let it defeat celluloid the way it has for two years running.

Studios already use social media to promote their movies, but exhibitors have been slow to catch on. If Foursquare or Facebook show friends "checking in" near a movie theater for something else, why can't it hit them all with a sponsored movie suggestion? Encourage more people to come along by offering group discounts on tickets or perhaps concessions during these social media promotions.

Movie studios with active Twitter feeds or Facebook fan pages can also do a better job of encouraging friends to head out to the local multiplex for a specific showing.

4. Differentiate the experience

Folks have different expectations from theatrical outings. Couples want quiet screenings without rowdy teens. Parents with young children don't want to risk offending nearby patrons when their kids act up. Older patrons may have a problem with a foreign film whose subtitles are too small or a conventional movie that may not be loud enough.

Theater chains have spent the past few years packing as many screens as they can in a venue in order to show as many movies as possible, but they're behind the curve in differentiating the actual screenings.

Some theaters are already offering special showings. AMC offers select screenings for families with autistic children on weekend mornings that have the lights turned up and the sound turned down. No one gives parents a stern look when autistic kids act up during these Sensory Friendly Film viewings.

How about the other end of the spectrum? Why aren't there some late-night screenings actively patrolled for scene-making revelers? Wouldn't you go see more movies if you were assured that loud and rowdy patrons would be whisked away at select screenings?

I haven't delved into concessions, but why can't some screenings feature updated snacks and premium food offerings to encourage folks to pay up for a different experience? Even if it means outsourcing operations to have a popular barista joint beef up coffee drinks by night and a hot local pizzeria spruce up pie offerings by day, it's all about getting folks to rally around select screenings -- and then collecting their information to make sure that they are alerted as to when such screenings will happen again.

Fade to black

Let's move ahead a couple of years.

I'm at a movie theater, mowing down some tasty boneless wings that Buffalo Wild Wings provides to the exhibitor every Thursday night. I'm sitting in the row reserved for Facebook meet-ups, along with some of my friends who just happened to be in the area. I'm watching a screening made exclusively for repeat viewers of a pretty loopy Chris Nolan flick. It's OK if someone blurts out the ending, since we've all seen it before.

Then again, we haven't seen this particular version. Folks who bought tickets to previous screenings were given unique ticket codes that they could use to vote online for changes that could be made to the story. We're about to see the alternate version -- or at least the one that the majority in this particular theater wanted.

Everybody wins. The studio and exhibitor get me twice. I get to enjoy a movie again on an entirely different level. This scenario may be far-fetched, but it may be what has to happen if the local exhibitor is still around at that point.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Buffalo Wild Wings. Motley Fool newsletter services have recommended buying shares of Buffalo Wild Wings and IMAX.




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58 Comments

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antiquepicker62

Its not the cost of the ticket but the cost of the popcorn

December 30 2011 at 6:39 AM Report abuse rate up rate down Reply
Mark S. Hinds

I use to go to movies 50-70 times per year. Now I go once every couple of years. Why?

1) The "experience" of seeing films in a theatre has been getting worse and worse, and the prices higher and higher. There were still theatres in the late 70s that let you say in the theatre through as many showing as you wanted. How about this? A pass that get's you in the door, good for that day only, which would alllow you to see any or all of the films currently playing at that multiplex?

2) There's too much garbage coming out. Did we really need another remake of "The Thing"? It's been made three times now!

3) Why does Hollywood feel the need to remake great foreign films? The Swedish film "The Girl with the Dragon Tattoo" is a classic. It has done well worldwide. Hollywood remade it. It bombed.

4) The last time I went to a movie in a theatre I had to sit through commercials. NOT why I pay money to see a film in a theatre.

5) Talentless actors who have an opinion on everything and have a pathogical need to tell us what it is.

December 30 2011 at 2:55 AM Report abuse rate up rate down Reply
Lisa

First of all, I would suggest producing better quality of movies. Then minimize big stars that demand high salaries and go with lesser known actors/actresses that have proven themselves. I am tired of seeing the top 10 stars in pictures because they are over-rated. They over expose themselves in the media and burn themselves out in trying to be interesting to watch. I prefer to watch movies with lower exposed actors. Once they share all of their personal details and political views, they become extemely less interesting to me. They would be better off to just act ( pretending to be other people) and then shut up. If they wanted to educate themselvels in world events they would have gone to college and lived a life being themselves, not pretending to be someone else.

December 30 2011 at 2:32 AM Report abuse rate up rate down Reply
Andy Bauer

First of all, the prices have gone up exponentially in the last 20 years. When I graduated from high school, nighttime prices were $3.50, and there were several $1 theaters around who showed nearly-exited films. Now, I pay $10 for nighttime shows (or $13 for 3-D and $14 for "IMAX"), and the quality of films has gotten worse over the years. Mostly it's because of the sheer volume of films being released. The reason why Titanic was tops in the box office for several months back in 1997-98 was because there weren't 5 movies coming out every weekend. The biggest downside of releasing so many movies so fast is that the quality suffers terribly--studios put out the worst crap I've ever seen, and finding a truly good film is like finding a needle in a haystack of needles. The studios and theater chains need to do the following: 1) Make better films, and less films. Then you can concentrate on making them worth people seeing at all, let alone more than once. 2) Stop raising prices in the theaters. For many people, taking their family out for movie night is now akin to taking them out to a very expensive restaurant--I have heard people I work with talk about movie trips--including gas, tickets, and food--costing over $100. Now, when you can stay home and watch the DVD for under $20 anytime you want without dealing with the crap, why would you spend $100?!? I used to go see upwards of 70 movies a year in the early 90's, but these days, that number is about half or less. I find often that finding a good movie is hit or miss, and I am often disappointed with the crap studios put out just to fill a slot in their schedule. In case no one's noticed, the entire country is in a severe financial crisis, and has been for nearly 4 years now. People can't afford to go out as often, and when they do, they're looking for affordable things to do that are worth their money. If you keep raising prices so fast, you'll soon find that movies will go online and viral a lot faster than they do now. Like it or not, the internet and video streaming are worldwide, and they're here to stay, so if you want to get people to watch your movies, you have to make the movies better and cheaper. That doesn't mean make every stupid unfunny comedy that some crackhead thinks up, or do to movies what TV has been doing the last 10 years and go all-reality, all-the-time. Put it this way...in 2011, there have so far been 590 movies released in some form or another. Of those 590, only 27 (less than 5%) broke the $100 million mark. Of those 27, only SIX broke $200 million. SIX, out of 590. Compare that to 2001 (just 10 years ago)--2001 had only 356 movies released (234 less than this year). In 1991, it was 226. In 1981, there were only 113 (less than 1/5 of 2011's total). So you see the trend, compared to 30 years ago...5 times as many movies, and more than 5 times the price to see them. With 590 movies, it's impossible to make even half that many be good quality. Quality should come first.

December 30 2011 at 12:59 AM Report abuse rate up rate down Reply
mrbill7820

Odler people may have a problem with foriegn films because the sub titles are too small to read??? The sound is too low?? I haven't reached 65 yet , but I can tell you most movies are too LOUD! And I do just fine with subtitles, thank you, even with the bifocals!!. Number one way to get more people into the theatre...MAKE BETTER FILMS. Period. A great story wins out over special effects. Paris at Midnight did just fine this year without special effects. There have been very few memorable movies in the last few years. Also , here in Chicago, it is $11.00 a ticket, plus parking !! Yeas a "price rollback" may help , too.

December 30 2011 at 12:27 AM Report abuse rate up rate down Reply
chnvlly

I haven't been to a movie inside a theater in years. Why? The sound! I must take cotton and even then I find myself putting my hands over my ears. Why put myself through that? I enjoy seeing films in theaters. With some of the best ones (Dr. Zhivago, Lawrence of Arabia and others of their ilk) the experience just can't be duplicated on a TV screen. But once I finally find a film I may want to see I always wait to see it at home so I can hold the volume button in my hand.

December 29 2011 at 11:40 PM Report abuse rate up rate down Reply
muvcritic

But we're all forgetting something else: Even at $10 a ticket, a movie is STILL the cheapest date you can go on. Try going to a rock concert or a symphony or a ballet or even a decent bar or restaurant and you're going to spend a LOT more.

December 29 2011 at 10:27 PM Report abuse rate up rate down Reply
moeelmore

Lower prices for snacks. show movies in a loop so you can go any time. pay actors what they are worth and not what they demand. Tell people what movies are really about. Example - We Bought a Zoo - advertised as mostly a comedy and great for kids -- WRONG! I will wait for word of mouth from now on. Make good movies. Kids go to see special effects, adults like well made stories.

December 29 2011 at 10:09 PM Report abuse rate up rate down Reply
Rick

Hollywood can only be saved by bringing back great stars like James Mason, Van Heflin, Robert Walker, Thelma Ritter and Paul Douglas
Then- watch the boxoffice go boffo!

December 29 2011 at 10:01 PM Report abuse rate up rate down Reply
1 reply to Rick's comment
muvcritic

But...they're all dead.

December 29 2011 at 10:20 PM Report abuse rate up rate down Reply
Bob

The climax of Hollywood having problems can be characterized by the actors and actresses presenting themselves in public as 'all knowing'. But, sadly, Hollywood has been fundamentally transformed with the inability to produce blockbuster after blockbuster in what had been the movie-making capital of the world.

December 29 2011 at 10:00 PM Report abuse rate up rate down Reply