Why North American Movie Ticket Prices Rose In 2014

Movie Tickets In Popcorn

A week after the investment firm PricewaterhouseCooper released a survey in which found 53% of its 1,000 respondents felt movie tickets cost too much, the National Association of Theatre Owners (NATO) reports that the average cost of a movie ticket in 2014 rose to USD $8.17.

That figure is a 0.50% increase from the USD $8.13 average cost of a movie ticket in 2013. Movie ticket prices roller-coastered in 2014 from quarter-to-quarter but generally stayed above the USD $8 mark. The second quarter saw price levels topping out at USD $8.33 before declining to USD $8.08 during the third quarter before rising once again to USD $8.30 for the last three months of the year. Fourth quarter prices were actually down year-over-year from USD $8.33 in 2013.

We have found these numbers, taken without considering any context or analysis, can be a bit misleading. For instance, many industry-watchers might assume the cost of a movie ticket declined in the fourth quarter of 2014 because exhibitors were lowering prices to attract audiences during a down year in attendance and box office. While that may account for a portion of the decline, it’s also helpful to look at the releases in theatres during the fourth quarter of both years.

In 2013, “Gravity” was doing blockbuster business on its way to Academy Award nominations and Oscar wins. Because the film was shot in 3D and with IMAX in mind, many moviegoers chose to see it in those formats, both of which come with premium ticket prices. On the other hand, in 2014, we had “Interstellar” on its way to doing decent business, which though popular on IMAX was not released in 3D, and “The Hobbit: The Battle of the Five Armies” which performed weaker than expected.

This of course is assuming that the average ticket price is calculated by dividing the period’s box office by its admissions. Historically however, NATO has conducted a survey of its members to determine the average ticket price for a quarter or year.

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Amazon Enters Movie Business With Two Wise First Steps

Ted Hope

Ted Hope was hired as Head of Production for Amazon Original Movies

In a twist of the old adage “give them an inch and they’ll take a mile”, just a week after winning a Golden Globe for television series, musical or comedy for their show “Transparent”, web giant Amazon has announced its intentions to enter the movie business by producing theatrical releases. To show just how serious they are about the new venture, the company has hired indie film veteran Ted Hope as Head of Production for Amazon Original Movies.

Amazon already produces television shows for subscribers of its Amazon Prime program. Now in a strategy that mirrors Netflix, its streaming rival, Amazon is aiming to release roughly 12 movies per year in cinemas starting in late 2015. In a window shrinking move, Amazon will premiere each title on Amazon Prime Instant Video (at least in the United States) only four to eight weeks after their theatrical release.

The tight release window may sound like a deal breaker for theatre owners, and probably is for certain exhibitors, but keep in mind the type of films Amazon intends to distribute. “The movies in this program will be ‘indie’ movies,” Amazon Studios Vice President Roy Price told media outlets in an email. “We will be looking for visionary creators who want to make original, unforgettable movies. We expect budgets to be between $5 million and $25 million.”

As Price hinted at in Amazon’s press release announcing the news, independent films have increasingly been experimenting with day-and-date releases in various forms in hopes of augmenting even the most modest of theatrical releases:

“Not only will we bring Prime Instant Video customers exciting, unique, and exclusive films soon after a movie’s theatrical run, but we hope this program will also benefit filmmakers, who too often struggle to mount fresh and daring stories that deserve an audience.”

It doesn’t take an industry expert to read between the lines and understand Price is saying if it wasn’t for Amazon coming along, some of these movies might not even get made, let alone wind up in theatres. If indie films is their goal, then the company has certainly picked the right guy to head up the effort.

Hope is a well-known, highly experienced and savvy producer with deep ties to the independent film world. If his name sounds familiar, it should. He’s produced dozens of well known movies, many of them through Good Machine, which he co-founded and ran with screenwriter and the former head of Focus Features, James Schamus. During his tenure as a producer he’s made multiple films with Edward Burns, Hal Hartley, Todd Solondz and Ang Lee, as well as “21 Grams” with Alejandro González Iñárritu. More recently he spent a year running the San Francisco Film Society and until earlier this month was the head of Fandor, an online subscription streaming service that specializes in indie movies.

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Movie Theatres Face An Inevitable Netflix Effect

Diffusion of Netflix

As we begin the new year, I strongly believe we are entering a period of great danger and even greater uncertainty. Events are unfolding within and without the movie industry that are extremely threatening to our studio.

This is how Jeffrey Katzenberg began his now infamous 1991 memo which criticized the Walt Disney Studios, of which he was then chairman, and the overall state of the film business at the time. It’s hard to believe those words were written more than 20-years ago since they are so easily applicable to the current motion picture business.

Katzenberg penned his prophetic memo in 1990 during a rainy Christmas vacation in Hawaii. The end-of-year holidays are often a time of increased introspection on a multitude of subjects that range from personal to professional, from political to religious. A few consecutive days with a couple of extra unoccupied hours and and we all turn into armchair Nietsches. Like Katzenberg, I also came to a bit of a realization during our recent holiday season about the industry we all passionately toil away in.

Actually, if recent introspective pieces by Nick Dager at Digital Cinema Report and Luke Edwards at Pocket Lint are any indication, I’m not the only one who spent the holidays ruminating about the present and future of our business. These constructive assessments present qualitative research to diagnose the recent downturn in moviegoing attendance, attributing the cause to a number of factors, including the emergence of subscription streaming media services. To these treatises I would like to add some academic theorems that can be useful in helping us determine where theatrical exhibition falls on the curve of a typical market’s lifecycle as well as models that are useful in forecasting future market conditions.

Collecting Anecdotal Evidence
Because the mathematics and theories underlying diffusion theory can be dry and didactic, translating them to existing or real-world markets can at times seem confusing. Thus, I will attempt an explanation through an anecdote which initially coaxed my mind down the path of such market musings in the first place.

During the holiday break I witnessed innovation diffusion theory in action through the promulgation and/or unfamiliarity of over-the-top streaming services such as Netflix among extended family members and acquaintances. By applying simplified diffusion theories to this qualitative research I was able to discern the current market complexities and the far-reaching consequences motion picture exhibitors and distributors will undoubtedly face due to growing consumer adoption of online video streaming services.

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Discovering How The ECA Uses Trailers To Promote Event Cinema

YouTube Preview Image

Rather than simply being a service that continuously clogs your inbox with email updates, it turns out LinkedIn, the popular social network, can be rather useful for discovering certain bits of industry information. Take, for example, a recent discussion on the site begun by Melissa Cogavin (née Keeping), the Managing Director of the Event Cinema Association (ECA).

By posting a message in LinkedIn’s Alternative Content & Entertainment group she let its 631 members know that the ECA had produced a new trailer which would be appearing in cinemas and online to promote event cinema.

Cogavin was using LinkedIn precisely as the company had hoped users would. Rather than being a network to visit when one needs to update their resume, look for a job or research someone’s professional credentials, LinkedIn created groups to help bring users back on a more regular basis. There are numerous LinkedIn Groups focused on the motion picture and entertainment industries wherein professionals from all over the world engage in ongoing discussions, debates and the exchange of information.

But enough about LinkedIn (for now). The only reason to bring up the social network at all is to point out how the ECA’s Cogavin used it to spread the word about her organization’s trailer, not only to those in the United Kingdom (where the ECA is based) and Europe, but throughout the world. While I am certainly familiar with the ECA, I had no idea they produced promotional trailers, the most recent of which can be seen above.

I’m slightly embarrassed to admit not knowing about the trailer since when reached for comment about the latest one, Cogavin said the ECA has created 9 trailers to date; 4 per year since the trade group’s launch in September of 2012. “We produce one per season covering a 3 month period,” she explained.

All of the trailers produced by the ECA can be found on their YouTube page.

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A Little Teaser For “Ant-Man” Is A Big Win For Marvel

YouTube Preview Image

Marvel Entertainment did not wait long before placing their mark on 2015. The Disney owned company is widely expected to have a banner year thanks to the release of both “The Avengers: Age of Ultron” and “Ant-Man”. Marvel rang in the new year by releasing an 18-second teaser trailer for the latter, once again proving their mastery of this specialized marketing medium.

Rather than simply post an 18-second spot online, which likely would have been enough to send fanboys the world over straight to their blogs, Marvel released a version of the teaser that demanded viewers give it a closer look… literally. Under the headline “1st Ant-Sized Look at Ant-Man” a video was posted to Marvel’s YouTube Channel on January 2nd. The video, shown above, features images and clips from the film sized perfectly for viewing by ants.

Of course, if you happen to be human, like most everyone with enough money to pay for a movie ticket, then this means the 18-seconds of footage is microscopic. Even the best squinters in the world would have a hard time making any of it out. Some dedicated fans discovered if the resolution of the video was increased to 1080p and blown up to full screen then the faintest of fuzzy images from “Ant-Man” could be made out. Maybe that’s why the video has racked up more than 6.3 million views on YouTube.

The following day, after dozens if not hundreds of media outlets had written about the tiny “Ant-Man” teaser, Marvel posted what they dubbed the “1st Human-Sized Look at Ant-Man” to YouTube. Shown below, it is the same exact video as the “ant-sized” version. This time however it was large enough to see by those of us who walk around on only two legs and who can carry a wallet, but nothing that is 5,000 times our own body weight.

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How MoviePass Converted AMC From Foe to Friend

MoviePass and AMC

Last week MoviePass, the unlimited moviegoing subscription service, reached a major milestone in the development of their company and possibly the decades old theatrical exhibition business model. AMC Theatres announced an agreement with MoviePass for a pilot partnership that will let its patrons in Boston and Denver sign up for a premium MoviePass subscription package. The program should be in place in early 2015 in both markets, allowing film buffs to see every movie in cinemas, in any format, including 3D and IMAX.

MoviePass Premium, as the new package has aptly been named, differs from the company’s standard subscription which does not include 3D or large format showings. It also costs USD $45 per month instead of USD $35 per month for the standard subscription.

For those unfamiliar with MoviePass, the company offers a subscription that allows moviegoers in the United States to see an unlimited number of films each month at a rate of one per day. Each film can only be viewed a single time. These features and regulations will be the same between both plans, however MoviePass Premium subscribers will only be able accepted at AMC locations in the pilot markets.

Just a few days earlier I had made a note to check in with Stacy Spikes, the co-founder and CEO of MoviePass, to get an update on how the company was doing for a potential post. The AMC announcement gave me the perfect opportunity to catch up with him in what could arguably be seen as a moment of vindication for Spikes and MoviePass. After all, when MoviePass first attempted to launch a beta in June of 2011, AMC Theatres told its personnel to reject vouchers from the Netflix-like service. The program was quickly halted when other exhibitors complained and it took MoviePass nearly a year to relaunch.

So, I reached out to Spikes the day AMC published their press release concerning MoviePass and, as has always been my experience, he responded within minutes. We were talking by phone within the hour; no publicists and no fuss. If only speaking with all motion picture professionals for a story were that easy.

When asked how it felt to be partners with one of the cinema chains that once tried to thwart MoviePass, Spikes said with a deserved sense of joy, “It’s kind of like a hard fought fight, but it’s a beautiful thing. You know, data kind of wins the day. It’s hard to argue with people who sign up and then want to go to your theatre more often.”

Spikes always struck me as a shrewd business person, as he demonstrated by not holding a grudge against AMC. “I’m excited about AMC,” he said. “They are so smart and they aren’t afraid to take risks. I think we can do some great things.”

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Sony Hackers Crossed A Line By Threatening Movie Theatres

The Interview Premiere

Though most of the entertainment industry and business world has been riveted to every breaking development of the Sony Pictures hack, we have purposely refrained from writing anything about it. That was until the perpetrators of the cybercrime threatened movie theatres showing an upcoming Sony film release with terrorist acts.

Yesterday morning, in what has become an almost daily ritual since news of the Sony hack first surfaced the group taking responsibility for the cyber attack, who call themselves the Guardians of Peace, sent an email which threatened:

“We will clearly show it to you at the very time and places “The Interview” be shown, including the premiere, how bitter fate those who seek fun in terror should be doomed to.”

The email went on to state that “The world will be full of fear” and referenced the 9/11 terrorist attacks in New York and Washington D.C. It suggested, in no uncertain terms, that moviegoers should stay away from movie theatres screening “The Interview” and those that live near such cinemas should evacuate their homes. No specific reason was given, however since the hack against Sony Pictures first occurred it has been widely speculated that North Korea might be responsible for the attack in retaliation for “The Interview”, a film Sony had scheduled to open Christmas day. The comedy featuring Seth Rogen and James Franco centers around a plan to assassinate North Korean leader Kim Jong-un.

As a media outlet focused on the motion picture exhibition and distribution industries we were among those who received the hacker’s daily emails. Over the past few weeks we could have used this site to dissect the notes of countless DCI meetings from the past ten years or even highlight the terms of Sony’s various virtual print fee (VPF) agreements, details of which were contained in the staggered distribution of Sony’s data. However, there is a reason such information was meant to be kept confidential and its publication serves no greater public need. As well, the commercial matters being discussed within such documents is ancient history and any interest in them would be purely academic at best. That our silence came with the advantage of not publicizing the hackers or their crime was an added bonus.

But when the perpetrators took aim at the general public, threatening innocent people in a venue this particular media outlet considers a place of secular worship, they crossed a line that even the most malicious hackers know to avoid. Virtual thievery in the anonymity of cyberspace gives victims the false sense they are not in direct danger of physical harm. Threatening terrorist acts upon specific people or places in a world still smarting from an endless string of such events panics a public with feelings of immediate personal danger. That’s what makes such threats so affective and why the Sony hackers’ intimidation of movie theatres is far more damaging than any of the data they leaked.

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Answering A Few Hypothetical Questions About the “Interstellar” Unlimited Ticket

Interstellar Unlimited Ticket Meme

Two weeks ago AMC Theatres and Paramount Pictures announced they’d be teaming up to provide members of the cinema chain’s loyalty program, AMC Stubs, an opportunity to see “Interstellar” as many times as they’d like.

The Interstellar Unlimited Ticket, as the offering has been dubbed, costs between USD $19.99 and USD $34.99 depending on location. Stubs members who have already seen the movie can purchase an upgrade for USD $14.99. “Interstellar”, the latest film from director Christopher Nolan; a science fiction epic that was released to a great deal of buzz and in numerous formats, including traditional 35mm film, 70mm film, IMAX and digital.

In the press release sent out by Paramount announcing the program, Elizabeth Frank, AMC’s executive vice president and chief content and programming officer, stated:

“Christopher Nolan has created a masterpiece that movie fans are saying gets better every time they see it. The Interstellar Unlimited Ticket gives these fans an opportunity to experience the spectacular cinematography and heart-warming stories as many times as they would like – at any AMC location, any showtime, in any format, including IMAX.”

Not sure who these fans are with enough free time to sit through multiple viewings of a three hour movie, nor if that says anything about the unemployment rate in the United States, however “Interstellar” was one of this year’s most highly anticipated films and got pretty decent reviews. So, putting the question aside of whether there is actual demand to see “Interstellar” an unlimited number of times during its initial run, we contacted AMC hoping to get a few questions answered in an effort to write up a post that went beyond simply regurgitating the press release.

Thus, we are inserting the following obligatory statement:

AMC did not respond to multiple phone calls and emails seeking additional information and comments for this story.

We even went so far as to send the appropriate personnel at AMC some of the questions we had about the the Interstellar Unlimited Ticket, yet heard nothing back. Left with no way to cover the announcement in a manner that doesn’t come off as pure promotion, we came up with the concept of providing answers to the questions we had hoped to ask AMC. We’re not saying our answers are accurate, but simply educated opinions based on our own research and knowledge of the industry. Let us know what you think of them, and feel free to provide some of your own constructive answers in the comments section of this post.

When did the idea for the unlimited ticket program come about? Was it before the film’s release and, if so, how long did it take to put together?

The idea came about before “Interstellar” was released. One way to take a movie from being a strong success to an outright blockbuster is getting fans of the filmmaker or cast to see the movie more than once. Thanks to shortening theatrical release windows and the increased quality of home entertainment systems, the practice of seeing a release more than once in cinemas has decreased to an insignificant number.

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Regal Cinemas Causes A Disturbance In The Force

Regal's Star Wars Force Awakens Teaser Release

A few days ago you may have felt a great disturbance in the force, as if millions of PR managers suddenly cried out in terror, and a theatre chain was suddenly silenced.

Translation: Regal Cinemas learned the hard (and often harmless) lesson so many online retailers have already experienced on countless occasions.

While updating their customer-facing website over the weekend, Regal broke the news that a teaser trailer for “Star Wars: The Force Awakens” (a.k.a “Star Wars: Episode VII”) would be shown in a small number of theaters. The circuit’s website even went so far as to list the nine cinemas showing the teaser before all films from November 28th through November 30th. In a commendable attempt to be thorough, Regal also posted links to the announcement on Facebook and Twitter.

The only problem in all this is that the official announcement of the teaser trailer for “The Force Awakens” was meant to come from its director J.J. Abrams who had not yet made the news public. Oops.

The “incident”, if you can actually call it that, occurred early Monday morning setting off a nerd alert in certain sectors of the Internet galaxy. Though Regal quickly took down the webpage and deleted their posts on Facebook and Twitter, they were soon made aware (if they weren’t already) that once something is published online, it is impossible to erase. Screenshots of their webpage and even a YouTube video began making the rounds on social media and the blogosphere.

It wasn’t long before official word came from Abrams, via his production company’s Twitter account, that an 88 second teaser for the highly anticipated release would hit select theatres this Friday. Shortly afterwards Regal republished their webpage announcing details on where and when to see the “Star Wars” teaser.

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