While the market is changing, it doesn’t mean the end of movie theaters.
By Caitlin Burns | August 12, 2013
For decades, the theater has been the source of much hand wringing within the entertainment industry. The ‘80s and ‘90s were boom times, to be sure. That era, at least in the United States, seems to be waning. Even though ticket sales were up in 2012, there are dire predictions for box office numbers this summer with many tentpole blockbusters underperforming.
Where do audiences want to spend their money? A new technological experience, or a social experience that will never be exactly the same twice?
THE END OF A GOLDEN AGE, AGAIN
Back in the late 1940s and 1950s people would spend all Saturday at the movies, seeing one film after another, mixed in with news, shorts, animated fare and more. The experience was communal. Not to mention, aesthetically appealing, once upon a time, movie theatres were themselves works of art, and going to them an experience to be savored.
I remember as a young girl, savoring the calm environment of the pre-show movie theater, with classical music playing, I’d sit expectantly, even eagerly to see the previews of movies to come… I also remember around the year 2000, the first time a good friend of mine heard “Be sure to get to the movie theater early next time so you don’t miss any of the 20” – the twenty minutes of pre-preview commercials that now precede every multiplex feature. It was the funniest expression of shock and disbelief I’ve ever seen, and it shut up a person who I’ve rarely ever seen speechless.
The theatrical experience has changed a lot in three decades, first came video stores, then with the advent of cable television, video games, video on-demand, iTunes, there are now dozens of ways to find an experience you desire without stepping foot onto a ticket line.
- Would you go to a movie theater for a screening if you didn’t know what the movie was… but that was the solution to a mysterious puzzle?
- Would you rather spend $45 and an evening watching The Fifth Element onboard a yacht staged to look like Fhloston Paradise? Or $59.99 to purchase an early-release digital version of Tower Heist?
- Do you think $20 per person is better spent at an IMAX screening or on three independent films at home on a 50-inch screen premiering that same weekend?
These are the choices that audiences ask themselves every weekend, and for distributors and exhibitors their answers mean the difference between sinking and swimming in the modern media economy.
When multiplexes took over from regional and municipal theaters, economies of scale came with them; sugary drinks and questionable butter toppings took over from localized concessions. Stadium seating took over and lobbies became bus stations instead of hubs for conversation. Spending all day at the theater becomes much more expensive when you’re considering $20 tickets a la carte every 90 minutes. The experience of going to a movie theater in America is perfectly similar if you go in Maine, Florida, Los Angeles or New York. The experience is homogenized.
For theaters, and the movie distributors who rely on them, there is a big question on the table for their bottom line… how do we get people into theaters?
Perhaps the question they should be really asking is … how do we make the experience special again?
When you have $20 in your pocket… how do you want to spend it? Do you want to go to the impersonal multiplex to see something that you can watch on a big screen at home? Maybe you’d rather go to an art house theater where you can eat concessions made from more recognizable ingredients and see something more niche? Of course, if you don’t live in an urban area your options are even more limited and when you factor in gas, babysitting, and time… you want your time and energy to be well spent.
“You’re gonna have to pay $25 [£16] for the next Iron Man,” Spielberg said. “You’re probably only going to have to pay $7 to see Lincoln.” Spielberg also revealed that Lincoln, his Oscar-winning 2012 biopic of the 16th US President, had come “this close” to being an HBO television film, and only earned a theatrical release because the director co-owns his own film studio, DreamWorks.
… There’s eventually going to be an implosion, or a big meltdown… where three or four or maybe even a half-dozen mega-budget movies are going to go crashing into the ground, and that’s going to change the paradigm.”
Audiences now have so much choice about how to spend their time and entertainment dollars, he explained, that studios are forced to put their weight behind only the biggest titles. “You’re at the point right now where a studio would rather invest $250M in one film for a real shot at the brass ring than make a whole bunch of really interesting, deeply personal – and even maybe historical – projects that may get lost in the shuffle,” Spielberg said.
With studios looking at a number of new options and distribution models, multiplexes have more competition than ever. While the predictions are dire, there are pathways through the changes coming in Hollywood. Studios have been trying to solve the declining ticket sale problem by exploring a number of technical distribution solutions. Unfortunately, this has at times put them directly at odds with the theater chains.
National Assocation of Theater Owners
WINDOWING AND DISTRIBUTION CHANNELS
The “windows” that surround theatrical releases have been the industry standard for content strategy for decades, defining when the first rental and purchasable versions of films would be available after a lengthy period where the only place to see the film was in a multiplex. In attempts to combat piracy and to respond to changing paradigms last year, four studios attempted to do on-demand releases the same day as their theatrical premiere, but ran afoul of the theater chains in the process:
But Cinemark, which operates about 3,800 screens in the U.S., is sticking with its fierce opposition to the premium VOD business. It and the two larger exhibitors, AMC Entertainment and Regal Entertainment, last spring waged a public battle against a premium VOD test by four studios, including Universal, that made movies available -- for $29.99 -- 60 days after their debut in theaters. Those companies believe that making movies available to watch at home sooner than 90 days after the premiere encourages consumers to not go out and buy tickets.
Whether this type of distribution can pay off, has yet to really be seen. While independent features have been doing well releasing video on-demand at the same time of their theatrical release, they are reliant on ticket sales for a smaller amount of their total anticipated income. If you’re opening on 12 screens nationally, the idea of finding additional audiences through cable service is much more exciting than if you’re opening on 3000 screens and have to guarantee a certain amount of seats filled to ensure the health of a relationship for your studio with a powerful exhibition business partner.
Another experiment was Universal’s Tower Heist, where a Video On-Demand viewing of the feature was offered only three weeks after it’s theatrical premiere, dilating the expected window profoundly. This was tested in two markets, Atlanta and Portland through Comcast, and the potential family film was set to be available to cable subscribers just in time for Christmas, but at a price: $59.99.
Ultimately, they pulled the VOD offering, after much critical backlash summed up quite succinctly by movieline.com, “Under what circumstances would you pay $59.99 to watch Tower Heist?”
That doesn’t mean the idea is totally without merit, like some early recording industry digital false starts, the price vs. value of the offering seemed unreasonable. If they were offering something a bit more exciting than just an early download, the experience would be more appealing.
Paramount tried a similar tactic this year, where for $50 a limited number of Megatickets were sold for World War Z. These got the ticket holder into an exclusive VIP pre-screening as well as a digital download of the movie.
While this certainly seems like a better deal for the price, the beauty of it is that it celebrates the audience’s desire to see the film when they are most excited and providing them with a unique experience in addition to distributing the film product in a new way. Marketing incentives have long reached into the creative realm for exclusive screenings. These exclusive and more elaborate experiences are special, they are often theatrical, and they inspire press attention in and of themselves.
Instead of relying on the movie to sell itself, like the Tower Heist on-demand, the World War Z megaticket was a social experience and a set of products that seemed worth remembering. While in the past, the most elaborate of these events have been confined to Comic Cons and high-level critic screenings, the opportunities that theatricality bring offer new potential for exhibitors… and the creators of films to consider.
Theater chains on the other hand, have been exploring innovations of their own.
TECHONOLOGICAL INNOVATION AND ECONOMIES OF SCALE
Whether it’s understanding the pre-vis or audience awareness of a film before it’s release, and the ever-increasing importance of getting fan buzzing in the months leading up to the box office premiere, data and analytics have given studios a sense of what they need to accomplish to get people in the theater.
But the experience itself, currently loaded with advertisements that are baldly similar to what people regularly see on their television screens have not been as innovative in their actual content as the digital story-world extensions that have supported film marketing. These extensions, while designed to build audience awareness, need to not simply invite; but to lead audiences through the doors and give them an experience that they can’t find anywhere else.
It’s easy to say that the experience around a movie screening should be made more phenomenal, and much harder to implement a special experience dozens of times a day in locations around the country.
How do you create an immersive experience in a physical space, when you need to replicate it multiple times a day in thousands of locations?
On the whole, multiplexes have been seeking out ways to improve the experience of their theaters technologically. High-tech sound systems, IMAX, 3-D, immersive in-lobby advertising, arcade games are all part of the desire to keep audiences returning to their physical location. The idea there is that something can be provided on a larger scale than smaller theaters or home theater systems can offer.
Theaters also have taken to one-night-only experiences that connect audiences to content with things like Fathom Events. Broadcasts of concerts, operas, and other programs to dozens or hundreds of theaters occur regularly, and draw their own audience to niche fare that doesn’t exist in the audience’s city, or is otherwise inaccessible.
What they haven’t done in that process is taking a hard look at the content they’re putting into that technology to see what might work better. An overreliance on Ad-spots and behind the scenes have failed create original communal experiences in the theater itself, despite their being great potential for just that. Having several dozen people in an audience in the same room provides an opportunity to do interesting things, but either through not wanting to pursue it or not knowing where to start, multiplex chains haven’t taken that leap as creative venues.
One of the most promising of innovations currently in theaters comes from Audience Entertainment their firm provides in-theater gaming by using motion capture and the screen to ask the audience to engage directly in any number of game or content possibilities. This is of course an opportunity for a type of content and play that isn’t easily replicable outside the theater, which is entirely the point.
Interactive technology and One-Night Only Screenings provide the means to make the experience of the multiplex theater more interesting, but what is going to define that success is ultimately if those experiences are satisfying, enjoyable and exciting to audiences.
While many feel that cell phones and tablets are unpleasant interruptions to a film in a theater, Regal Cinemas is experimenting with Second Screen interactivity with the FirstLook Sync app. Similarly, the content will be key with this technology, while it might be a perfect opportunity for “Choose Your Own Adventure” the movie, it would likely be a nuisance at best if the film is a more classic emotional thriller or drama.
The success of many of these platforms is going to lie squarely in the hands of those creating content for those technologies to relate to audiences. How well these features add to the experience of seeing a film, and not just any film, the film the audience paid to see. Some film experiences, like Cloud Chamber or The Cosmonaut might be ready made for this sort of release opportunity. Turning loose the creative imagination of creators, rather than relying on advertising exclusively could go a long way toward resolving the big question at hand for multiplexes.
Multiplexes must evolve to be able to create phenomena that appeal because they cannot be found elsewhere, whether that’s through on-screen content or the in-person social potential of screenings. They are making efforts, and in some cases are learning strategies that emerging theater chains and exhibition enterprises have been using to chip away at the market .
EMERGING THEATER FRANCHISES AND CREATIVE SUCCESS
The lack of variety in multiplex experiences, and indeed, the requirement that they operate according to economies of scale has led to opportunity for new franchises and theaters, including the MPAA’s “Best Theater in the World.”
The State Theater of Traverse City, Michigan is a community theater that focuses on independent and limited screen release fare, spearheaded by Michael Moore.
“This month, we will sell our one-millionth admission ticket since we opened five-and-a-half years ago. What makes this statistic even more remarkable is that Traverse City's year-round population here in remote northern Michigan is only 16,000 people. And mostly we show only "smaller" indie and foreign films that open nationwide on less than 200 screens.
Even with those limitations, in the 289 weeks we've been open, for 78 of those weeks, the State Theatre has been the #1 grossing theater in the country for the movie we happen to be showing. We've placed in the top 10 grossing cities for 171 of those weeks (the other cities on that list are usually New York, Los Angeles, Chicago, D.C., Dallas, Boston, etc.).”
Building a theater for Moore and his group meant showing highly curated films, no commercials and an absolute commitment to staying self-sufficient. Which they’ve managed to ensure, ironically, by choosing to focus on creating a highly specific theatrical experience consistently rather than finding profit-enhancing ways to get more people buying bathtubs of popcorn.
The theater decided to focus on the needs of the local community that surrounded the place, and was able to capitalize on the draw that the historic theater has held for decades, it’s an amazing place to see a movie.
One of the most compelling chains of theaters in the United States also got its start because it saw the needs of underserved communities and met them with creative thinking. The Alamo Drafthouse in Austin, Texas is a local staple, another art house, but also the center point of SXSW Film. One reason it is so popular is that it serves beer and pizza, but what really took the theater and its audience to the next level was literally taking screenings out of the box.
The special screenings that Drafthouse became legendary for its Rolling Road Show, a projection truck and inflatable screen that has let audiences see Jaws while floating in inner tubes on a lake, launched the Marfa Film Festival on the set of There Will Be Blood (some 9 hours driving time from Austin) and host national tours of films in famous geographic landmarks.
The audiences for the Drafthouse, which now has opened theaters around the country, are enthusiastic because screenings are actual events; where one might dress up, or play paintball or simply know that other audience members are there because they chose this experience, rather than looking for the default Saturday night.
The logic of that shared experience that everyone in the audience has really chosen to be here, now, for this reason is key to the wild success of midnight screenings and the business of local theaters from back when they showed – plays – and the early movie houses of the 40s and 50s.
In areas with less specialized screenings or theatrical opportunities, a special screening takes on even higher value. As a teenager, I myself would drive over an hour to see a screening within the city of Phoenix with my friends if the experience was outside the normal fare offered in my neighborhood. The opportunity for an individual theater to distinguish itself in a glutted suburban market or to draw people in a large rural area because there is a perception that this evening is unique, worth making the effort and worth the price.
Now, art house and independent theatres have used this model on re-releases of old films for decades, most notably, the Rocky Horror Picture Show’s cult success was fueled by special late-night screenings. For the past two decades, there have also been increasing screenings of other re-releases that have drawn audiences into the theater when they could more easily rent or even download the movie.
“You may have seen Predator a million times, but to see it in a theater with a bunch of people who came out just to see Predator is something really cool,” says Matthew Viragh, the Nitehawk Theater’s owner. “It’s sort of a communal experience.”
New York, and other large urban areas are strong markets for this type of theatrical experience as well. In Williamsburg, Brooklyn a rapidly developing center of young adult hipness, there are 5 multi-screen theatres including a traditional multiplex opening in the next 12 months, but the market for alternative screenings has been proven in the area for years.
Since 2003, Rooftop Films has been holding a summer series on rooftops that consistently draws audiences to view films that haven’t yet found their distribution deals or would otherwise not be seen. Growing from humble beginnings, the group is now a non-profit that supports films as well as exhibits them. Similar to the others above, they have created a community of interest around their goals, and provide that community with specific, ideologically focused reasons to attend and engage.
The last place one might think to look for creative exhibitor experiences comes from advertising, but brands are entering the field as patrons of the arts that not only bring attention to their advertising goals, but also make use of the creativity some new thinking can present.
Car membership service, Zipcar, has created the Zipcar Drive-In series of events, where for a price, you reserve a car for the evening and directions to an exclusive screening. Having partnered with Showtime to show the premiere of the final season of Dexter and premiere of Ray Donovan in Boston, Washington D.C. San Francisco and New York, the novelty is also rewarded with a driving credit to the diver’s account and of course, snacks. Zipcar also partnered with the Lower East Side Film Festival and other groups for events and screenings. What seems like an unlikely partnership, is actually a fairly clever connection, and with all screenings selling out, there’s potential for growth.
THE END IS A BEGINNING
Blockbuster tentpole fare is not for everyone, even though it reaches the widest markets for film audiences. That said, neither is “independent” fare, but if you know what audience you’re looking for, you have the opportunity to tailor the experience in a way that will be satisfying and well worth the price of the admission.
Theaters ultimately live or die by the audience’s desire to attend their locations. New theaters and theater franchises are interacting with their communities, and replicating their successes as they steadily grow throughout North America. Multiplex chains on the other hand, are looking to technological solutions and higher screen interactivity to guarantee their audience’s money’s worth.
There are many new ways to make use of the exhibition space, even if some are reminiscent of theater years past. There are also fascinating ways to make use of special screenings, second-screen or gaming activity and event advertising to build compelling stories and story world extensions.
While many think the entertainment industry is imploding, multiplexes in particular, the crisis is also leading a big bang of creative solutions for traditional creators and newcomers alike.
Caitlin Burns is a Transmedia Producer with Starlight Runner Entertainment and has worked on properties ranging from Pirates of the Caribbean for The Walt Disney Company and James Cameron’s Avatar, to Halo for Microsoft and Teenage Mutant Ninja Turtles for Nickelodeon. She is a Board Member of the Producer’s Guild of America’s New Media Council and an Advisor to the Tribeca Film Institute’s New Media Fund. Find her on Twitter: @Caitlin_Burns
Special thanks to Jeff Gomez, CEO of Starlight Runner Entertainment: @Jeff_Gomez for his editorial input into this piece.
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