Box Office Meltdown Matthew Milko
Movie Theaters • 1896 – First Movie Theater – Vitascope Hall in New Orleans, Louisiana
Movie Theaters • 1957 – First North American Theater with 2 screens – The Elgin Theater in Ottawa, Canada
Movie Theaters • 1963 – AMC Theaters creates first Multiplex
Movie Theaters • 1995 – First Megaplex (18 or more screens) in United States is opened by AMC in Dallas, TX
How do Theaters make money? • A movie theater will split the gross ticket revenue 50/50 with the Movie Studio. Some studios demand 70-90% of the Ticket Sales. • Concession Stands – Popcorn, Coke, Candy, etc. • Movie Theatres depend on high ticket sales in order to make money.
Why do People go to the Movies? Movie Theatre Experience • Event (Family, Dating, Friends, etc.) • Large Audience • Large Screen • Comfortable Seats • Popcorn/Candy • High Quality sound system
Why the Low Ticket Sales? • 2005 – Largest box office drop in Two Decades $9.4 billion down to $8.9 billion • From 2002-2006 there was a 14.6% decrease in ticket sales • 2000-01 – 6% drop in attendance put many theatre chains in bankruptcy.
Why the Low Ticket Sales? • High Ticket Prices ($8 or higher at night) • High Concession Prices (Lg. Popcorn and Lg. Coke ~ $9 • Increased minutes in Advertisements and Previews (15-20min before Feature Presentation) • Growing use of Cell Phones • Talking • Over seating • Problems with Audio or Projector • Bad Seats • Film Quality Declining
Why the Low Ticket Sales? • Short Term Profitability in Exchange for Alienating Core Audience
Improved Home Theater Viewing • Lower prices in Hi-Def Widescreen/Flatscreen TV’s • Lower Prices in High Quality Sound Systems • Private of own home • Netflix and Blockbuster Online feed DVD’s to Home Theatres
Improved Home Theater Viewing • Window between Movie Theatre release of a Movie to DVD Release is decreasing • Used to be 6 months • Now Usually around 4 months • Children Movies – 3 months • Less Time in Theater = Less Money
Solutions? • Lower Ticket Prices • Extend Matinee (afternoon hours) • Lower Concession Prices • Assigned Seating • Ban Cell Phones • Improve Quality of Films
Box Office Meltdown • Movie Theatres and Movie Studios must work together to raise Movie Attendance. • If not, Movie Theaters will go out of business and Movie Studios will have to restructure their whole business plan.
Box Office Meltdown • 1940’s – 60% of population went to the movies • Today – 9% of Population
Box Office Meltdown • http://en.wikipedia.org/wiki/Movie_theatres • www.slate.com • http://www.thehilltoponline.com • http://www.thebigpicture.com • http://www.imdb.com • http://www.boxoffice.com