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Thursday, March 30, 2006

Are theater owners complete meatheads?

A lot of the press coverage of the movie industry assumes that theater owners are intellectually capable of purchasing popcorn, tallying up ticket sales, and not much else. This Wired interview with AMC CEO Peter Brown falls into that category, taking Brown to task for refusing to show movies (such as Steven Soderbergh's `Bubble') that are simultaneously released to TV or on DVD.


Here are some observations (maybe a few are even facts):


1. Movie theaters today enjoy the exclusive right to show a product that isn't available (legally) anywhere else, for a certain period of time: first-run films.


2. They're going to fight to preserve that exclusive for as long as possible, negotiating deals with studios that are clearer about how long the exclusive will last. (IE, when does the studio plan to release the movie to DVD, the Net, or cable?)


3. Any business would do the same thing, because being the only game in town is a nice competitive advantage.


4. But eventually, to combat piracy and make the most of their advertising dollars, some studios may decide to release some movies in multiple formats at the same time.


5. Theaters will continue to boycott these, but may not be able to hold that line forever. Some of them will be hits (unlike `Bubble') that people would pay to see in a theater.


4. The smartest theater owners are already thinking about how to compete in a world where some movies are released simultaneously in multiple media. In that world, the theater becomes what I'd call a `rentable living room.' It performs tasks that your living room can't perform, even if you can purchase a fresh release on Friday via a click of your video-on-demand remote control:


  • It's not your living room.
  • The screen is bigger.
  • The picture is better thanks to digital projection.
  • The movie may be in 3-D. Seats may rumble. There may be speakers built into your headrest.
  • You may choose to see the movie in a giant theater with a Godzilla-sized screen and lots of fellow movie-goers.
  • Or you may want to pay a bit extra and see it in a small screening room with a group of your friends. You'll get to sit on leather couches and lounge chairs, order platters of food from a menu, and probably even select the movie your group wants to see from a vast catalog of titles, new and old. (Not to mention that you'll be free to get up and perform a little movie karaoke if you want.)
  • Just as Borders (and many other chain and indie bookstores) have an endless series of authors parading through, theaters will find a way to regularly bring in actors, directors, screenwriters, producers, and film profs to talk about the movies that are playing.
  • Exclusive content (live concerts, Broadway shows, motivational seminars by Tony Robbins, and the like) will still be available
  • Theaters will offer real loyalty programs. Since it's to their benefit for you to come more than once a month, why not discount the second ticket you buy in any month by a buck or two? The third time, perhaps they let you bring a friend for free...
  • Theaters will link up with film schools and indie filmmakers in their community, offering a venue where they can show their work. These may be one-off screenings, but the content will likely have an audience locally and a built-in promotional engine.
  • Theaters will sponsor participatory competitions that go from week to week, bringing people back. These don't necessarily have to be video game competitions. They could be `name that movie' or `name that actor' competitions, or `American Idol'-styleface-offs among local filmmakers: whose short movie is best? Who can make the best movie in 48 hours?

Some theaters are already dabbling in some of this stuff. (They're not stupid -- really.) But expect to see a lot more.


Your thoughts on what you'd like to see your neighborhood cinema doing?


(Somewhat related link: Carmike Cinemas is one of the largest chains to commit to a full-on digital cinema roll-out. Their senior execs spoke this week at a Bank of America conference in New York.)

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